This is an historic moment for African smallholders.

Today, there are unprecedented opportunities in African agriculture. Africa has the fastest growing population and the highest rate of urbanization in the world. The middle class is growing across the continent, driving demand for food.

Foreign multinationals are aware of this purchasing power and moving in. This continent, our continent, is rich – rich in human resources and rich in in natural potential. And we have seen here in Tanzania, and elsewhere – in Ghana, Rwanda, South Africa and Togo – that transformation is possible, even in the aftermath of conflict, even in the wake of natural disasters.

Africa is one of the world’s fastest-growing economic regions, and its growth in agricultural GDP is strong. Growth was 4.8 per cent in 2009, compared with 3.8 per cent for Asia Pacific region and 1.4 per cent growth in Latin America and the Caribbean.

Africa also has the largest share of the world’s uncultivated land with rain-fed crop potential, so there is room for agriculture to expand, and to do this sustainably.

And Africa has the greatest potential to reduce poverty through smallholder agriculture. Small farms, of 2 hectares or less, represent 80 per cent of all farms in sub-Saharan Africa. They contribute up to 90 per cent of production in some countries. These small farms have the potential to be key suppliers to Africa’s growing urban markets as well as rural market.

And we know, from many studies, that GDP growth generated by agriculture is at least twice as effective in reducing poverty as growth in other sectors.

As the multinationals have noticed, the outlook for African food markets is bright. The demand exists and is growing, for quality, for variety and for processed foods. This means new and exciting possibilities for the agro-industrial sector.

But is the African agricultural sector ready to take advantage of these opportunities? 

I am sad to say, it is not.

Where are our roads? Where are our farming communities with reliable access to electricity and running water? Where are our warehouses piled with golden maize? Where is the good governance that would make doing business in Africa attractive?

If we want to make Africa’s national and regional markets work. If we want to ensure Africa’s food and economic security, then we must transform our infrastructure and the way we do business. And this change must come from within.

Let me speak bluntly. Although there are some exceptions, Africa overall does not have a good business environment. African nations still dominate   the bottom of the World Bank’s rankings on Doing Business.

African nations must make a true and concerted effort to improve the business environment. This includes creating a more investor-friendly environment that can attract public-private partnerships.

Trade agreements and regulations already exist, but they are of little value if they are not enforced. Enforcement requires strong political will to eliminate illegal practices that occur in government ministries, and at border crossings throughout the continent.

More broadly, African countries must continue to defend the foundations of democracy and safeguard the political stability so critical to economic growth. Governments must be consistent and predictable in their trade-related policies, not changing them impetuously and scaring away potential investors in response to short-term, seasonal events. This change has already begun in large parts of the continent, but more is needed.

We must also solidify the links between food markets across the continent. Intra-African trade is only about 10 per cent, compared with intra-trade of about 70 per cent for the EU, and of 50 per cent for Asian countries.

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

Most smallholders do business only in their local markets. We must help African farmers to tap into regional and continental markets. This is important for economic reasons, and can also mitigate the impact of price volatility. Trade between African nations can ensure that food is available throughout the continent, even when there are climatic shocks that disrupt production, such as the situation we are seeing now in the Sahel.

One of the main reasons many African farmers have trouble competing is lack of infrastructure. For markets to function there must be sufficient investment in rural infrastructure, including roads, electrification and storage facilities.

Today, more than one third of the rural population of sub-Saharan Africa lives five hours from the nearest market town of 5,000 people, making transport and marking costs too high. Imagine, in the United Kingdom, 100 per cent of roads are paved; In India, almost 50 per cent are. But in Kenya, which is nowhere near the worst in Africa, it is only 14.3 per cent.

Consider that it can cost five times as much to transport a tonne of rice in parts of central Africa as it does on major routes in Pakistan.

How can we even talk about markets when one-third of the rural population of sub-Saharan Africa is sitting on the side-lines? When they have with no real chance of participating in the market economy, and no real chance of improving their economic condition.

For markets to function, Africans also need access to affordable electricity. The cost per kilowatt of electricity is 14 times higher in parts of Africa than it is in South Asia. And electricity generation capacity has not increased since the 1980s.

Equally important are processing and storage facilities. An estimated 20 to 40 per cent of crop production is lost in sub-Saharan Africa because of deterioration after harvest. Post-harvest losses on this scale are scandalous, particularly on a continent where millions of people go hungry.

These are not insurmountable problems. Roads can be paved. Storage facilities and processing plants can be built. Governments can enforce their existing laws and not change their policies on a whim.

You may think that I am being too harsh on our continent. It is true that Africa has been registering higher GDP growth rates than any other region of the world. But this is due mostly to extractive industries and has not led to social development or equitable distribution of wealth.

It is a shame that we are where we are today. Look at the progress that countries like Brazil, China, Malaysia, South Korea and Viet Nam have made since the 1960s and 1970s. They were once worse off than African countries.

We know that in Africa, smallholders can contribute to food security, economic growth, landscape management and wealth creation if they are able to participate in national and regional markets.  If they have well-functioning infrastructure, and supportive polices.

Smallholders who can participate in markets have an incentive to increase production. At IFAD, we see time and time again the production improvements that occur when smallholders have secure access to land and water. When they have financial services to pay for seed, tools and fertilizer. When they have the technology to receive market information on prices. And when they have the knowledge and policies to produce in ways that maintain ecosystems and minimize vulnerability to climate change.

Smallholders also thrive when they are organized into strong organisations with greater bargaining power in the marketplace and the ability to influence national, regional and global agricultural policies.
Indeed, IFAD’s experience repeatedly shows that smallholders can be strong domestic and even regional market suppliers when they are part of strong farmers’ organisations.

Let us not forget that smallholders, and farmers in general, are the biggest on-farm investors in agriculture in developing countries.  They invest not only their own money but also their time and labour.

Africa can feed itself. Of this I am sure. I have seen it with my own eyes on field visits in Ghana, in Rwanda and in Zambia.

By working in partnership to create opportunities for Africa’s smallholders, supported by a true and deep commitment by governments, I look forward to the day when I can say that African markets are working and Africa is feeding itself.

We owe it, to the quarter of a million children in the Sahel who die of malnutrition, even in good years, and to each and every man, woman and child on our continent who wants to build a bright future for themselves, here in Africa.

I look forward to hearing from our impressive panel on this important topic.

Thank you.