Financing cooperation between AGRA and KfW

1.2 Million Smallholder Farmers in Burkina Faso and Ghana to Benefit from a New Cooperation by the German Development Ministry and the Alliance for a Green Revolution in Africa (AGRA)

The German Federal Ministry for Economic Cooperation and Development (BMZ) has entered into a strategic partnership with the Alliance for Green Revolution in Africa (AGRA) to combat hunger, create jobs and raise incomes in rural areas of Africa.

The partnership is based on a shared interest in: country, regional and continental agricultural priorities; investments and policies that advance agricultural incomes of the smallholders; food security; sustainable land use; and inclusive and sustainable agricultural transformation in Africa that fosters employment and economic opportunities.

Under the BMZ Special Initiative ‘One World – No Hunger’, Germany will contribute €10 million to co-finance AGRA’s five-year strategy (2017-2021) and to increase productivity, combat hunger, create jobs and raise incomes of 1.2 million smallholder farmers in Burkina Faso and Ghana, both focal countries of the German Development Cooperation in the agricultural sector and two of AGRA’s 11 priority countries.

Both Burkina Faso and Ghana have made some notable progress which offer a glimpse of the potential for growth that is possible through agriculture. For example, Burkina Faso has achieved the Malabo target on the allocation of more than 10 per cent of the annual national budget to the agricultural sector while in Ghana, the Government’s signature Planting for Food and Jobs programme has, in its first year alone, raked in GH¢1.2bn (US$ 270,276,000) in crop value and created 745,000 jobs.

Despite this progress and notwithstanding that agriculture is at the core of the countries’ and, indeed, the continent’s GDP, the sector is still underdeveloped. As a result, productivity remains way below potential due to inadequate use of high-quality seeds and fertilizer, limited access to finance, inefficient markets, limited rural infrastructure and gaps notably in women access to resources such as inputs, labor, and extension services.

These challenges are compounded by sub-optimal policy environment and inability to effectively prepare and respond to shocks and stresses which stand in the way of Africa’s potential to feed itself. As a result, the continent annually imports food worth $ 40 billion. In Burkina Faso, food imports are estimated to cost $330m a year while Ghana’s food import bill is $2bn a year, and projected to increase fourfold over the next 20 years.

The new partnership will contribute to addressing these challenges by strengthening the adoption of sustainable productivity-enhancing technologies; reducing post-harvest losses; connecting farmers to stable markets and strengthening the enabling environment including by working with financial institutions to increase farmers access to financing.

“Agriculture is Africa’s surest path to prosperity. As such, we believe that this partnership will be transformational by creating high productivity jobs for young people as an alternative to migration to Europe; improve the livelihoods of smallholder farmers to move from subsistence occupations to viable businesses; and create a globally competitive agriculture and agribusiness sector to produce high value yields,” said DrAgnes Kalibata, President of the Alliance for a Green Revolution in Africa (AGRA).

Special attention will be paid to women and youth who are the majority of the rural population involved in farming. This will be informed by a recent BMZ-initiated survey among 10,000 youth in rural sub-Saharan Africa, which revealed that more than half of the African youth are not planning to migrate to urban areas, but want to build their future lives in the rural area depending on the availability of jobs, education and infrastructure.

“The future of mankind will be decided in rural areas. The professionalization and the sustainable intensification of agriculture is a key factor in reducing poverty and hunger. That’s why the German Development Cooperation has made food and nutrition security, together with rural development, a priority area of its work. , said BMZ Director-General Mr. Gunther Beger.  “We are delighted to partner with AGRA, as it aims to realize the potential of Africas agriculture. We want to support the continent to become food self sufficient – from an annual food deficit of 35 billion USD – all this in a way that is tailored to local conditions and to the needs of local communities whilst minimizing social and environmental risks,“ added Mr. Beger.

AGRA is committed to aligning, harmonizing and leveraging all of its work with the much greater investments of other public and private actors, acknowledging that its total budget for Burkina Faso and Ghana (€34 million and €26 million respectively) represent only around 1-2 per cent of the total investments it feels are needed to drive an inclusive agriculture transformation in the countries over the next five years. The partnership, therefore, offers an opportunity to align and leverage its resources with the significant investments by the German Development Cooperation, such as the Competitive Rice Initiative (CARI), the Green Innovation Centers (GIC) and bilateral  programs in Burkina Faso and Ghana, as well as in other AGRA focus countries where possible.

“This partnership embodies the belief by AGRA and Germany that Africa can feed itself and that smallholder farmers are central to this. We are also confident that it will greatly enhance our environmental and social management systems to minimize potential negative impacts of our work by sharing best practices and lessons learned,” stated Dr. Kalibata.

This partnership will contribute towards the achievement of the African Union goals of doubling agricultural productivity, tripling agricultural trade, managing one third of Africa’s agricultural land in climate smart agricultural practices, eliminating hunger, and cutting poverty in half.  It will also contribute to the G7 goal to lift 500 million out of hunger and malnutrition, the G20 initiative for Rural Youth Employment and to the Berlin Charter.

The partnership was initiated through a Memorandum of Understanding signed between AGRA and BMZ at the annual African Green Revolution Forum (AGRF) in September 2017 and formalized through a financing agreement signed between AGRA and KfW at the AGRA Headquarters in Nairobi.

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