Enabling poor rural people
to overcome poverty



Nkosi sikelel' iAfrika
Maluphakanyisw' uphondo lwayo

God bless Africa
Raise high its glory

Madam Chairman,
Honourable Ministers,
Distinguished Colleagues,
Ladies and Gentlemen,

It is with great pleasure, and with pride, that I stand here today, on African soil, in a country that has been transformed beyond all recognition over the course of my lifetime. As many of you will know, I am an African, born in Nigeria. And although my professional life has taken me to three other continents, Africa has, and will always have, a special place in my heart.

South Africa’s powerful national anthem starts with God bless Africa, Raise high its glory. These words are a good reminder that today, we are not just here to discuss problems.  They remind us that at the heart of our discussion is one common goal: to raise high Africa’s glory.

This continent, our continent, is rich – rich in human resources and rich in natural potential. We have seen here in South Africa, and elsewhere – in Ghana, Rwanda, Tanzania and Togo – that transformation is possible, even when it means overcoming the legacy of conflict and natural disasters.

Our challenge is to take what we know works and apply it, country-by-country, region-by-region, until this transformation is a reality, not just in individual areas or nations, but throughout Africa.

Brief introduction to IFAD and the Rural Poverty Report 2011

For those of you not familiar with the International Fund for Agricultural Development, let me quickly introduce my institution. IFAD is one of three Rome-based United Nations agencies. It is unique in being both a UN specialized agency and an International Financial Institution.

It is also distinct because its focus is, and has always been, the poor people who live in the rural areas of developing countries. For more than 30 years, IFAD has been exclusively focused on rural and agricultural development.

Africa has always been a central part of our work. Sub-Saharan Africa accounts for the single biggest tranche of IFAD’s ongoing programmes and projects; and more than 50 per cent of our new financing is being directed to the region.

As a result of our consistent focus on rural development and our consistent presence in Africa, we have accumulated experience and knowledge of what works – and what doesn’t work – not just in general but specifically here, in Africa.

Our most recent, in-depth, findings are set forth in IFAD’s 2011 Rural Poverty Report. The report is a comprehensive and up-to-date assessment of the current state of rural poverty, and shows how the contexts and prospects for agricultural development are changing rapidly. It was produced in collaboration with policy makers, researchers, NGOs, producer organizations, the private sector, and poor rural people themselves.

The report shows how rural development can provide greater food security and economic security in the future. And it offers concrete suggestions for policies and actions to empower poor rural people to move from poverty to prosperity. In a few minutes my colleagues will present the details of the report to you.

One important finding is that poor people must not be treated as victims, in need of charity or bottomless handouts. The report shows that many poor people have the capacity and the desire to build better lives for themselves. What they lack is access, opportunity, and infrastructure. 

At IFAD, we know that there is no magic bullet, no secret formula that will eliminate poverty and hunger over night. But there are solutions that, when tailored to the realities of a specific region, or even a specific village, can transform lives.

We have seen time and time again that market-oriented agriculture has tremendous power to generate incomes and sustainable economic growth. And we know that when poor people are empowered, when they are seen and treated as the productive resources that they are, they can be the agents of sustainable and lasting change.

Change must come from within 

As I have said before, transformation must start from within. Africa’s development must be made in Africa, by Africans, for Africans.

Change cannot be imposed from the outside. But when it is cultivated from within — with, as we say in agricultural development, some external inputs – then every tree and every plant will be able to root itself in its own soil and flourish.

Agriculture offers enormous promise for Africa. Numerous studies show that GDP growth generated by agriculture is more than twice as effective in reducing poverty as growth in other sectors.

Sub-Saharan Africa has the largest share of the world’s uncultivated land with rainfed crop potential, so there is room for agriculture to expand. 

And there is also enormous potential to increase yields on existing cultivated land through better soil and water management, and by increasing the use of fertilizer, improved seeds and irrigation.

At the moment, farmers in sub-Saharan Africa use, on average, less than one-tenth the amount of fertilizer as farmers in Asia and Latin America.  They also use very low levels of improved, high yielding seeds, despite important advances in their development.  And only 3 per cent of land is irrigated, compared with 36 per cent in Asia. In Africa, only South Africa is close to using its full irrigation potential.

There is also the potential that comes from having a relatively young population. Young people under the age of 14, now make up 42 per cent of Africa’s population. It is encouraging to see that enrolment and completion rates for primary and secondary schooling is improving in nearly all countries, for girls as well as boys.

But the problems that need to be overcome are also large. Conflict, poverty and hunger continue to take too great a toll on our continent.

In terms of agriculture, sub-Saharan Africa loses around 8 million tonnes of soil nutrients per year. More than 95 million hectares of land have been degraded to the point of greatly reduced productivity.

Climate change is also a growing threat to smallholders. We are already seeing the impact of climate change on agriculture. Crop failures and livestock deaths are causing higher economic losses, contributing to higher food prices and undermining food security with ever-greater frequency.

And while poverty rates are declining in Africa, the absolute number of poor people has increased, as have levels of under nourishment and child malnutrition.  The current food price increases have further contributed to both poverty and food insecurity.

So the threat is not only that we not achieve Millennium Development Goal 1 – the eradication of extreme poverty and hunger – but that we actually go backwards and see reversals on progress made.  And without the achievement of MDG1, it is difficult to see progress in the other MDGs.

Importance of smallholder agriculture

The importance and promise of agriculture to Africa cannot be overstated. Agriculture remains a critical sector in Africa’s economies.  It accounts for about 30 per cent of sub-Saharan Africa’s GDP and at least 40 per cent of export value. In most countries, agriculture accounts for more than 60% of employment.

For much of the continent, smallholder agriculture holds the key to food and economic security.  Smallholder farms of 2 hectares or less represent 80% of all farms in Sub-Saharan Africa. These small farms contribute up to 90% of production in some countries.

A large percentage of smallholders are women. In virtually all rural societies, women are the primary caregivers, but they also perform a large part (and often most) of the agricultural work and produce the bulk of the developing world’s food crops.

These smallholders, women and men, represent Africa’s largest cohort of micro- and small enterprises. It is time to stop treating them as charity cases and instead focus on helping them to grow their businesses -  first to achieve food security and then to produce a surplus. By doing this we will allow them to break definitively out of poverty.

This is not theory, but fact.  At IFAD, we have seen this happen again and again in Asia, Latin America, the Middle East, the former Soviet states, and, of course, in Africa. 

During my many visits to IFAD projects, I have met dozens of people whose lives, and communities, have been transformed.

I hope you will take the opportunity later to read the testimonials inside the Rural Poverty Report, where poor rural people from around the world tell their own stories in their own voices. The life stories and the regions are all different, but you will notice a common thread – higher production and productivity leads to higher incomes. Where there are higher incomes there are more meals a day, new homes, and better education and health for families, particularly children.

Another common thread to success is the ability to manage risk.

For a person living on $1.25 a day, the ability to take a risk – on planting a new, higher yielding seed, on specializing rather than diversifying – is too often an unaffordable luxury.

The lack of tools to manage risk all too often dampens the entrepreneurial spirit of people. But when a family no longer fears for its ability to feed itself, it can diversify its crops to sell to the market.  When the interest rate on loans is 20% or even 30% instead of 200%, a farmer may invest in fertilizer or improved seeds.  When a farmer has a secure contract with a credible buyer, she will take the time to improve the quality of her produce.

What must change from within

It is particularly fitting that we are discussing smallholder agriculture as a business on the sidelines of the World Economic Forum event for Africa.  Major corporations, like smallholder farmers, understand the importance of managing risk in their businesses.  The challenge for those of us who want to address smallholder farming as a business, is to understand how we can contribute to reducing risk for this sector. 

Clearly, there is a role for governments to improve the general business environment in Africa.  In the World Bank’s Doing Business rankings, the countries of sub-Saharan Africa occupy 15 of the bottom 20 slots.  Starting a business still costs 18 times more -- relative to income -- in Sub-Saharan Africa than it does in OECD countries. 

However, it is encouraging to note that the countries represented here with us today have demonstrated steady improvement over the past few years.  These countries have shown that when governments are more investor-friendly, they can attract greater private sector interest and expand the kinds of public-private partnerships which we see emerging throughout Africa, and which we at IFAD are proud to be helping smallholder farmers participate in.

More broadly, African countries need to put their political and economic houses in order. They must continue to deepen the foundations of democracy and ensure the political stability that is so critical to economic growth.

Members of the African Union recognized the central role of agriculture in reducing poverty when they pledged to increase spending on agriculture to at least 10 per cent of national budgets. This pledge was made in 2003 at Maputo. By last year, eight countries had met or surpassed that target. The continent as a whole has not.

But reaching this target is just one step. Governments must also invest in rural areas, creating the infrastructure to link rural people to markets.

More than one third of the rural population of Saharan Africa lives  five hours from the nearest market town, contributing to unacceptably high transport and marketing costs. If a farmer cannot profitably market her surplus, there is no logical reason to produce more than her family can store or consume. There is no motivation to adopt productivity enhancing technologies, particularly those external inputs which are costly and, in any event, are not likely to be available.

In other words, one-third of the rural population of sub-Saharan Africa is sitting on the side-lines, with no real chance of participating in the market economy and no real chance of improving their economic condition.

And if we are to feed the 9 billion of 2050, we must also focus on that 42 per cent of Africa’s population – young people under the age of 14.  It is the youth of today, particularly young girls, that will be the farmers and agro-entrepreneurs of tomorrow. 

We must invest in the rural space, including non-farm activities, in order to make rural areas vibrant and attractive to young people.  Only then will we stem the massive exodus to urban areas that often leads just to greater disappointment when promises for jobs are left unfulfilled.

Governments must also place a priority on facilitating trade within Africa.  Africa has the fastest growing population and the highest rate of urbanization in the world.  By 2050 it is estimated that most of that population will live in cities.  Whether our urban population will be fed by African farmers tomorrow will depend on what we do today to make it easier to move food from Niger to Nigeria or from Mozambique to South Africa. 

What must be done from without

While the impetus for change in Africa must come from within, no one would suggest cutting Africa adrift to implement this change on its own. Donors have an important role to play – on the macro level, by ensuring that their development assistance is targeted to agriculture and rural areas.  On the micro level, by getting the timing right.

Development assistance to agriculture has started to increase, but we remain far short of the pledges made at L’Aquila.  We must ensure that efforts by governments and the private sector are matched by renewed efforts by their development partners to mobilize investments for the sector.

And we must ensure that development is provided to the right place at the right time.  Too often development projects are late in providing credit, seeds or fertilizer to the farmers – drastically reducing their impact.  We need to do more, but we also need to do better. 

Finally, we need to recognize the global nature of food markets and create a level playing field.  I hope that the renewed international focus on the food price crisis, and the concerns regarding the current WTO negotiations will provide the impetus to finally assure more open access to markets in wealthier countries for producers in developing countries.

Conclusion

Africa can feed itself. Of this I am sure. I have seen it with my own eyes, in the projects I have visited in Ghana, in Rwanda and in Zambia. By working in partnership to create opportunities for sub-Saharan Africa’s smallholders, supported by a true and deep commitment by governments, and by increasing and improving the quality of our development efforts, I look forward to the day when I can say that Africa is feeding itself.

And when the day comes when Africa is not only feeding itself, but exporting a surplus and contributing to global food security – as it most certainly can – then we will truly have Raised High Africa’s glory.

3 May 2011, Cape Town, South Africa