Strengthening agrifood systems, health and social protection

Africa can finance its own development. Unfortunately, too many policymakers in Africa have a mindset of managing poverty, rather than of managing development. Its food system paradox isn’t grounded in a lack of agricultural resources, but in the geopolitical, financing and energy issues plaguing the continent. This was the stern message from Ms Cristina Duarte, United Nations Special Advisor on Africa and Under-Secretary-General of the Office of the Special Adviser on Africa (OSAA), who was guest speaker at the recent African Food Dialogue in Stellenbosch.

The event was hosted by the Southern African Food Lab and the Faculty of AgriSciences at Stellenbosch University (SU).

Before joining the UN, Ms Duarte served as Minister of Finance and Planning of the African island nation of Cape Verde, as vice president of Citibank, and as a former director of a World Bank reform program.

During her three-day visit to SU, Ms Duarte during various sessions interacted with academics and students from SU, as well as from the University of the Western Cape and the University of the Free State.

In welcoming Ms Duarte as speaker to the African Food Dialogue series, SU vice-chancellor Prof Wim de Villiers described her talk as a fitting end to Africa Month celebrations at the University. He underlined the importance of the series as a vehicle to bring together diverse, influential stakeholders in the Southern Africa food systems to respond to systemic issues in creative ways and to inspire change in the thinking and tackling of complex social challenges.

Ms Duarte was very vocal in describing Africa’s food systems paradox as a chronic one that existed long before the COVID-19 pandemic impacted it even further. She said it existed despite the resource-rich continent being home to up to 60% of the world’s uncultivated arable land.

She doesn’t foresee Africa by 2030 reaching the UN’s Millennium Development Goals (MDGs) and Sustainable Development Goals (SDGs) which were set out as shared blueprints to ensure peace and prosperity for people and the planet.

“In fact, we have gone back since these were adopted 15 years ago. The gap is huge, not to say cosmic,” she noted. “Even if our economies grow by 7%, which it isn’t, there will still be 400 million people living in poverty by 2030.”

Ms Duarte added weight to her statements by highlighting the following:

• In 2021, 270 million people in Africa were undernourished – a 42% increase from 2000.
• Around 60% of Africa’s people suffer from moderate or severe food insecurity – double that of the world average of 30%.
• Severe food insecurity has risen from 2014 from 16% to 25% today.
• Smallholder farmers ensured the production of 80% to 90% of all foodstuffs.
• 70% of all people in Africa in some way derive their income from agriculture.
• Africa spends 103,3 billion dollars on food imports, yet only exports around 50 billion dollars’ worth of foodstuffs.
• The world’s population is expected to increase by 2,4 billion people by 2050.
• To feed this growing population overall food production must grow by over 70% by 2050.

The lack of available arable land is a strained resource worldwide. Therefore any increase in food output is becoming increasingly reliant on optimized farming practices and ways to maximize the value that can be extracted from existing farmland.

“The system already understands something very simple: that Africa must be part of the solution to be able to feed the additional 2,4 billion people. There is no way that this can be done without bringing Africa into the equation, because we have the resources, such as land, water, sun, markets, young working force. .

“Unfortunately, we are selling thousands and thousands of hectares of land in Africa. We are losing our young workforce. The markets feeding our growing middle class are not strengthening Africa’s own production. Because of high import volumes it is feeding the production in other regions.”

To ensure a better future, African nations must build highly productive, labour intensive economies that can generate 80 million jobs annually.

“The agricultural sector is best placed to deliver on this,” Ms Duarte said.

She added that given geopolitical influences, the agricultural sector will still grow whether Africa decides to play an active role or not.

“The question is not that it will happen, but how it will happen. In fact, it is already happening – again. And we can decide if it will happen in ‘their’ way, or in ‘our’ way,” Ms Duarte challenged. “We need better leadership and more ownership, to better control the huge deficit between our own economies and financial forces.”

She believed it would be “impossible” to unlock Africa’s food systems without adequate energy provision, infrastructure and higher energy usage.

“The continent currently only uses 3% of the world’s electricity supply. To put it into context: in 2019 the European Union consumed over three times as much energy as Africa, and Germany and France’s combined consumption was more than that of the whole of Africa’s.”

Despite possibly being the only segment of the economy that can deliver on SDG promises, the agrofoods sector is unfortunately not seen as such by African partners and African policy makers. Too many economic policies with conflicting objectives are at play.

Ms Duarte said that most UN reports over the past 10 years have typified Africa as suffering from low yields, small markets, low levels of investment, and lack of access to markets, financing or quality goods.

She said the narrow approach of traditional economies, which was captured by neo-liberal thinking since the 1960s, dominate through a monetary approach and does not provide all the tools to understand Africa’s many paradoxes.

“We need to understand how the geopolitical economy focusing on the relationship between the state, society, individuals and markets impacts the food system paradoxes at large. A better understanding of the financing paradox will improve understanding of the food system paradox.”

She underlined how Africa is already financing its own development, but how this is not the perception of its leaders across the continent.

“We are not financed by third entities. We can do it ourselves,” she noted.

Only 65% of national budgets are financed with taxes. According to 2021 data from the African Union Commission and Organisation for Economic Co-operation and Development (OECD) on Africa’s development dynamics, the continent’s funding is largely driven by domestic resources:

• 38% by private savings
• 43% through public revenue (excluding grants)
• 4% through international development enterprises (IDE)
• 3% through portfolio investment
• 7% from remittance
• and 5% through official development assistance (ODA)

A major drawback within this potentially positive scenario is that Africa annually loses $70 billion to inefficient public spending and $46 billion to revenue forgone stands at $46 billion.  Between 1970 and 2018 illicit financial flows (IFFs) cost Africa $2 trillion. IFFs and debt levels are ever increasing.

She therefore described Africa as “a net exporter of capital to the world” of around $300 billion annually.

Despite Africa potentially having the necessary financial resources, its leaders are begging for debt relief and debt suspension and “have a mindset of managing poverty rather than development”.

“You don’t use the same policy framework for both,” she noted.

According to Ms Duarte, strong systems and institutions are “the missing pieces of the equation”. Internally driven financing within the next ten years is needed to strongly mobilize domestic resources, or else it will be too late to deliver on sustainable financing or sustainable development goals.

She explained how stronger domestic resource mobilization could strengthen countries’ political positions and allow them to enjoy higher decision-making levels on how to finance their public deficit. It will in turn allow countries to redesign and shape their own risk profiles, to tap in to international markets and capital markets, and be in an overall much stronger position. The challenge is to transform domestic resource mobilization systems to create a policy space and to transform economic and financial spaces that allow for policy making.

“By building domestic resource mobilization you can put your own country in a trajectory of predicable cash flows, which is an aspect that credit rating agencies look for,” Ms Duarte noted.

However, insufficient infrastructure, a weak public finance management value chain and a deficit in state intervention hamper Africa’s food systems.

“It is impossible to unlock food systems in Africa without electricity or water,” she noted in her closing remarks. “We need a conducive environment to unlock it.”