The Key to Narrowing the Development Gap-Increasing investment

By Pascal Lamy, Agnes Kalibata, and Ibrahim Assane Mayaki

Given that Africa accounts for a disproportionately large share of people facing extreme poverty, hunger, lack of access to education, climate risks, and other problems, it is where development financing can have the greatest impact. And nowhere is the return larger than in the agri-food sector.

PARIS – In 2015, United Nations member states unanimously pledged to work toward “peace and prosperity for people and the planet” by meeting 17 Sustainable Development Goals by 2030. Although the agenda was unprecedented in its ambition – end hunger, slash inequality, spur economic growth, achieve gender equality, arrest climate change, and ensure access to water, sanitation, and energy – many expected that the world would make significant progress. But the sad, hard truth is that only 12% of the SDGs’ 140 measurable targets are heading in the right direction, and more than 30% are stalled or moving in reverse.

There is still hope, though. A single sector holds the key to closing half of the outstanding sustainable-development gaps: agri-food systems in Africa. The continent is home to over half of all people facing extreme poverty, and more than half of those facing acute food insecurity. One in five people in the region suffer from undernourishment, and nearly one in three children are affected by stunting. Africa is also home to around one-fifth of the global agricultural workforce and is projected to become home to 49% of migrants displaced by climate shocks by 2050.

Thus, investing in African agri-food systems can have an outsize impact, allowing us to tackle a range of thorny issues – from hunger and poor health to poverty and undereducation – at the scale needed to keep up with the growth of Africa’s population, which is expected to double, to 2.4 billion, by 2050.

The biggest hurdle, of course, is financial. African agri-food systems are seriously underfunded: the sector receives less than 3% of global development funds and under 5% of total investments in Africa from public, private, and development funding combined. The average African farmer receives less than $140 per year in total investment, far below comparable figures for India ($800), Brazil ($1,800), or Thailand ($2,000). Some Britons and Americans spend more on coffee in the space of a month.

This chronic underfunding has taken a heavy toll. African agricultural productivity is 60% below the global average, and food imports are projected to cost the continent $110 billion annually by 2030. But with targeted capital and sustained attention, this can change. Boosting agricultural productivity would help feed a growing population, reduce import dependency, protect biodiversity, and restore soil health. Greater investments in the sector can secure the livelihoods of 250 million small-scale farmers and address the urgent need for climate resilience in a region disproportionately affected by global warming.

The benefits of investing in African food systems extend far beyond the continent. Africa’s natural carbon sinks will continue to mitigate climate change, but only if they are preserved. And strengthened agricultural systems can stabilize global food supply chains against disruptions caused by pandemics, conflicts, and climate shocks, by helping to rehabilitate the continent’s farmland, 65% of which is degraded.

But unlocking global benefits requires global engagement. Fortunately, African agri-food systems represent a compelling business opportunity. Aside from the fact that the continent boasts an increasingly skilled, youthful labor force and much of the world’s remaining arable land, investments in its food systems are 2.5-3 times more effective in raising incomes than those in other sectors.

Investors also stand to gain by coupling agri-food investments with investment in infrastructure such as energy, water, and technology, which will transform African agricultural systems into major sources of growth. Hundreds of small and medium-size enterprises are already moving inputs, providing services, and hauling hundreds of millions of metric tons of food between rural and urban areas every day. This is a strong base for investors to build on.

So, what needs to happen next? At the Paris Peace Forum earlier this year, we unveiled the Agricultural Transitions Lab for African Solutions (ATLAS), a permanent platform to advocate for increased investment, align priorities, and promote transparency and accountability in African agri-food systems. Since then, 30 organizations have joined, demonstrating real momentum behind the initiative. Members span from the private sector, including OCP Group and the Boston Consulting Group, development organizations (including AGRA and ONE Campaign) and leading financiers, such as the International Finance Corporation and the French Development Agency (AFD).

At this year’s annual World Economic Forum meeting in Davos, ATLAS is launching the 2×30 Challenge, which calls on leading development funders to commit to doubling total annual investments (from about $50 billion to $100 billion) in Africa’s agri-food systems by 2030. To ensure that the additional funding does materialize and has a meaningful impact, it will be tracked through an annual investment barometer.

Increasing investment is a first step toward building more productive, sustainable, and resilient African food systems. Supporting Africa’s farmers is not just an opportunity. It is indispensable to achieving global development goals.