As part of German Chancellor Angela Merkel’s recent visit to Africa, one of the countries on her itinerary was Ghana, which has been among the fastest-growing African economies over the last decade. Her meeting with Ghanaian President Nana Akufo-Addo focused on migration concerns and on strengthening the economic partnership. The reason for the former was clear, given the chancellor’s domestic political concerns, while the latter is often used as generic diplomatic language. But today the phrase is more than a political platitude, and with British Prime Minister Theresa May visiting almost simultaneously and touting a similar message of shared economic interest, and Chinese President Xi Jinping announcing a further $60 billion in financing for projects in Africa this week, talk of a scramble for Africa is becoming more commonplace.
With Turkey, Israel, India and the Gulf states all showing increasing levels of interest, something is clearly afoot. Perhaps not a scramble, but certainly a clamber. This is the culmination of a period of increasing progress, with a growing narrative of Africa rising. And it is clear that African economies are increasingly providing opportunities for investment, whether in energy on a continent where 600 million people are still without electricity or in large-scale infrastructure projects such as the Nairobi-to-Mombasa railway and the Grand Ethiopian Renaissance Dam, Africa’s largest hydroelectric-power plant. Some of this has raised alarmism over a new colonialism. The reality is that most African nations are more powerful, have better leadership and are more in charge of the terms of any deals than at any point in their history.
But if Africa is to fully capitalise on the new economic partnerships, there are areas where the pace of reform needs to pick up a notch. One of these areas is agriculture—and looking at Ghana and Germany, one industry highlights both how the 21st-century globalised economy works and how Africa needs to quicken its pace of modernisation. Ghana is one of the largest producers of cocoa in the world; hundreds of thousands of tonnes of the crop are produced each year. It’s one of the country’s main exports, but it can be at the mercy of events outside the country’s control: poor rains this year hit harvests, while the commodity shock has severely affected prices in recent years. Germany produces no cocoa, yet chocolate factories clustered around country’s largest port in Hamburg add millions of dollars in gross domestic product. Importing beans from Ghana, and other producers such as Côte d’Ivoire, these firms grind the product, ready to sell on to makers who sell the bars to consumers.
In recent years, African nations have started to invest in industries that add value to the raw ingredients, so they can compete with countries such as Germany. But the disparity and need to catch up are not unique to cocoa; across the agricultural sector in Africa a similar tale is taking place. Countries are not producing enough food and other manufactured goods. Productivity has grown too slowly since the 1970s—for example, the average yield for cereals in Africa is still only 1.5 tonnes per hectare, while in in Asia it is 4 tonnes per hectare. And too few end products such as chocolate bars are being made in Africa. This needs to change.
The new generation of leaders on the continent recognises this, and efforts have been undertaken in recent years to try to revolutionise the sector. Countries such as Ethiopia and Morocco have got it right by setting up agencies with sufficient political authority to coordinate the development of agriculture and ensure the bottlenecks to transformation are addressed. Countries like Rwanda and Senegal are also making progress by improving yields and diversifying their crops. But many others have fallen short. This is understandable: agricultural systems are complex, while governments often don’t have the capacity or support to intervene in the right way. But there is almost universal understanding from the leaders with whom our Institute works of a need to transform the sector to increase productivity, boost food security and create jobs for people.
Technology will be key, and countries like Israel, which have some of the most advanced agricultural technologies in the world, will be crucial partners. But based on our Institute’s experience, there are also three fundamental issues governments need to focus on. The first is that leaders in government need to be better supported so they can navigate the complexity of reforms. Technical analysis and political decision-making need to go hand in hand, so that investor proposals or new irrigation techniques can be reviewed quickly and well, and political judgements are then based on sound evidence.
Secondly, governments need to provide the enabling environment for the private sector, so that investment and capital come into the sector and drive growth. Rule of law is important, so that there is consistency for business. But so too is coherence in the system, which is why governments need support to coordinate the various ministries and agencies that will drive value chains, such as those which turn a cocoa bean into a chocolate bar.
And thirdly, development partners need to better facilitiate inclusive value chains that have a strong business case and political momentum. This will include support for small and medium-sized enterprises, as many of these firms in areas such as cocoa and soya processing, for example, don’t receive the mentoring support they need over an extended period to develop coherent business plans or don’t receive suitable seed financing.
This revolution needs to happen fast. Africa’s population is set to rise from 1.2 billion to 2.5 billion by 2050, increasing demand not only for food but also for jobs and livelihoods. Being able to put food on the table and providing for families is therefore crucial. Many actors are playing their part, including strong partners of our Institute like the Howard G. Buffet Foundation and the Bill & Melinda Gates Foundation. For our own part, our Institute supports countries such as Liberia, Sierra Leone and Rwanda on this issue, and we are playing a central role in this year’s Africa Green Revolution Forum, held in Kigali. Leaders such as Rwandan President Paul Kagame, who hosted the event, have been leading voices in pushing for transformational change. But to succeed, they need strong partners, willing not only to invest in the industry but also to support leaders drive reforms across the continent.