Agriculture is a trillion-dollar business, says Adesina
Akinwunmi Adesina,the President, African Development Bank (AfDB) is very passionate about the food and agro-industrial revolution of the continent. In this exclusive interview with CLARA NWACHUKWU, on the sidelines of the ongoing 2017 World Food Prize events in Des Moines, Iowa, United States, he speaks passionately about Africa’s role in ending hunger, and the AFDB’s efforts to scale up initiatives to make the continent self-sufficient in food production. He also urges African governments to initiate policies that will encourage youths to embrace agriculture as a moneymaking business.
Congratulations on your nomination for the World Food Prize Laureate award. How do you feel about it?
I feel tremendously great for the World Food Prize for Agriculture award, and to have been recognised for the 25 years of my work in trying to lift millions out of poverty, which is a life mission for myself, and what I have done in many African countries including in my own country Nigeria, when I was Minister for Agriculture.
But I think most importantly why this is great to me is that it also puts a wind in our sail in the yet unfinished work in feeding Africa, and fully unlocking its agricultural potential. I actually believe that Africa should be the global power house in food and agriculture. So I think the World Food Prize helped me and the African Development Bank, and everyone working on making sure that it happens to actually get that work done, and there will be no rest for me until we achieve this.
Going forward, how significant is this award in terms of the development of the agriculture sector in Africa?
First of all, I think the way that we look at agriculture in Africa has to change completely. Agriculture is not that sector, it’s not some kind of a social sector. Agriculture is not a development activity. Agriculture is a business, and that is so very important. It’s important because what Africa does with agriculture is going to determine the official food in the world.
What do I mean by that? To feed nine billion people in the world by 2050, is going to require a lot of food, and a lot of land. But 65 per cent of all that available arable land to feed nine billion people in 2050 is not in Asia, it’s not in Latin America, it’s not in Europe, or the United States, but right there in Africa. That is the potential. If you see me that I’m a real fan of agriculture, it’s because I think it’s the biggest moneymaking sector that we have. Think about it, the size of the food and agro business sector in Africa is going to be in trillion dollars by 2030. Think of it that way.
However, we have to ask ourselves a question: Are we going to be a market of ourselves, or that of a billion people supplied by others, or are we going to harness that trillion dollar market ourself? I think we should harness that trillion dollar market ourself. But that requires that we take agriculture as a business, and that is why I believe that the way we deal with agriculture is going to be central to how we do macro and fiscal stabilisation of African economies.
My whole drive is to make sure that Africa heads of governments, and ministers of finance recognise that agriculture is critical to macro and fiscal stabilisation of the economies. It is also for the creation of jobs, to the transforming of our rural areas, and to turning them from zones of economic misery as they are right now to zones of economic misery as they are right now, to zones of economic prosperity. And that can only happen by making agriculture work through agricultural industrialisation.
The way we are going on about agriculture is a business thing sounds more like an akunamatata – a problem-free theory.
Do you think African governments are doing enough to treat agriculture as a business?
I don’t think they are doing enough, because I think that the lenses with which we looked at agriculture were the wrong lenses in the past. People looked at agriculture as some kind of a sector in which you use to manage poverty, and not as a way of actually lifting people out of poverty into wealth. People came to accept that it was normal for Africa to be spending $35billion importing food. For me it’s abnormal, and if you don’t change that, that is also going to rise to $110billion by 2025 to 2030.
What I think we are going to really wake up to, is to realise that agriculture is going to be the lifeline for African economies, and we got to really change how we look at it. We have to make it a viable sector; we have to make it a sector that the private sector can invest in significantly. We have to make it a sector that young people get excited about, and therefore can go into, and make a lot of wealth from.
That’s why I’m saying that, yes, there are challenges everywhere in every thing, but challenges are the reasons to get things done. What we are meant to see are: the opportunities and the challenges are to remove them. I know there are challenges in terms of access to finance, yes, but we have models today like the ones that I developed when I was in Nigeria. It’s called NiCell, organised with the then Central Bank Governor of Nigeria, and now the Emir of Kano State, Sanusi Lamido, which continues to accelerate the access, and lending by commercial banks to the agricultural sector. We are trying to scale that up into some other African countries.
There are challenges in terms of access to technologies in which we have to make sure that we can get those technologies to farmers in the millions, but we know how to do that. In Nigeria, we had to empower the mobile phones to reach over 15 million farmers with seeds and fertilisers for over four years, and it transformed everything, and now we are taking that to scale in about 35 African countries.
There is also a challenge with regard to lack of access to electricity. Yes, if you are in agriculture, you need irrigation to work. You need to be able to process and add value to things, but we know that we can do that with electricity, and we use a lot of solar based system. For every challenge there is a solution, and for every opportunity you see in the world, you should take it. You should never give up on it just because you have challenges of getting it done.
Do you think that we are doing enough to attract youths into agriculture as a form of business, given that in the past it was looked at as a middle-aged, old peoples’, never-do-wells, and the jobless’ thing?
Let me start by giving you a secret. When I was Minister of Agriculture in Nigeria, the reason I kept my bow ties on as a minister all the time, was because I wanted perceptions to change. I wanted people to realise that this is not a poverty-making sector, this is a wealth-making sector. It’s all about changing perceptions, and I think we succeeded. I remember when I got D’Banj and others to begin to sing “cocoa name chocolate,” we got a lot of young people into agriculture. Today, you can see them all across Nigeria, from graduates to architects, to lawyers, they are all moving into agriculture as a business. I think that changing our perception of agriculture is very important. Second thing that we have to realise is that if we look at the agricultural sector, when you have your richest people not investing in the sector, then people think that maybe there is something wrong with that sector. That was why when I was Minister of Agriculture, we had a private sector focused polices, to increase foreign direct investments, and private investments in Nigeria into the agricultural sector.
I remember the day Aliko Dangote walked into my office, and he said: “Minister, I have been listening to you for quite a long time, and I have decided to change my mind.” I asked over what, and he said: “I want to move from being an importer to be a producer.” He said he was going to put in $300 million into rice production. I clapped for him, and told him that it was my best day as Minister of Agriculture. Three months after, he walked back into my office, and said: “Minister, I have changed my mind.” I asked: “What happened, what did I do wrong?” and he said: “I changed my mind from $300 million to $1billion. Today, you can see what he is doing in Nigeria, and I expect him to be one of the largest producers of rice in the world in the next couple of years. So when you see the richest black man in the world moving into a sector, then you better believe that’s the sector to be in. We have to really recognise that this is the sector where you can make a lot of money, and the young people need to recognise that.
Let me just give you one of the reasons why we must pay attention to this moneymaking sector. By 2030, the size of the food and agricultural market in Africa will be worth $1trillion, and so if you are thinking money, think of agriculture as a business, and that’s why I’m really excited that we are doing a lot with the young people.
The African Development Bank is at the forefront of getting a lot of young people into agriculture. Last year alone, we invested over about $800 million in programmes that is called, Enable Youths, to get a new cadre of young commercial farmers to be developed for Africa. We are doing it for about 35 countries, including in Nigeria, where we plan to do well over 37,000 of these businesses by young people. The future of agriculture depends so much on Africa, and the future of Africa’s agriculture depends so much on the young generation.
You said the road out of poverty is it through agriculture, but is that all there is to eliminating poverty in the world?
If you look at poverty, you’ll ask yourself: Where is poverty most concentrated in? Poverty is most concentrated in the rural areas, because 75 to 80 per cent of Africa’s population that are living in poverty live in the rural areas. So what you do with rural economy therefore determines your success or otherwise in dealing with the issues of poverty. And because the main source of livelihood for the rural poor is agriculture, when you transform agriculture, and you make it a moneymaking business to farmers, you create opportunities for them. You create a large market of employment opportunities for them. You create farm and non-farm opportunities for them. You will transform rural areas completely from zones of economic misery that many of them are today, to zones of economic prosperity.
Take the case of even Nigeria, you know we have big problems with boko haram in the north. We have problems in regards to the Lake Chad Basin – from Chad to Niger, to Cameroon, and to all those countries that are involved in that Lake Chad Basin area. But the point is, why did that happen? Why did boko haram just take over all that area? They took over that area because of their very high level of rural poverty.
What I call a disaster triangle – where we have three confluence of factors.
Whenever you have high level of rural unemployment among the youth, whenever you have high extreme level of rural poverty, and where you have climate and environmental degradation you will always have terrorists. So it’s not just about using agriculture to pull people out of poverty, it’s about transforming the rural economies, and you actually ensure national security, because of the young people who don’t have things to do. People have hopes, therefore terrorists can’t be recruiting them all over the place.
I also think that the other part of dealing with issue of poverty is not just about even the rural areas; take the urban poor for instance, we also have poverty in the urban areas. But the urban poor spend 60 per cent of their income on buying food, and therefore, if you transform agriculture and you lower the prices of food, the real wages of the urban poor actually go up. Agriculture has impact on the rural poor, and it also has a positive impact on the urban poor, who are buyers of food. For me, agriculture is central to how Africa will deal with the problem of joblessness among other issues, and so it has to be given top priority by African governments.
In addition to the youth programme, what other programme is the African Development Bank doing to enhance agricultural growth?
If you take a look at women, they form the bulk of the farmers, and I really feel bad. I have never seen any bird that flies with only one wing. There is no way African economies can progress fast without actually carrying all the women along. I think we would move even much faster if we make it easier for women to actually get access to secure property rights, and access to land, and access to finance.
They form the bulk of the farmers in Africa, and yet they do not have access to financing. That’s why the African Development Bank launched an initiative that is called, Affirmative Finance Action for Women Aid (AFAWA), and the goal is to mobilise $3billion specifically for the businesses of women in Africa. It’s the largest effort to be done for women in Africa. I believe that when Pan-Africa gets the issues of women right, we will finally get everything right, so we are investing heavily in that.
The other thing that we are investing in is infrastructure, because if you really want to do agriculture, it’s not just about the technologies alone, it’s about the infrastructure – you need electricity. I have never seen any economy that can function without access to electricity. Unfortunately today, we have 645 million people that do not have access to electricity in Africa, and honestly, you can’t develop in the dark. Electricity or energy is like blood in your body, and if you have blood, you have life. So no economy can function without electricity, and that is why the African Development Bank launched a massive effort to ensure that African countries achieved universal access to electricity within a period of 10 years.
Afterall, we’re in the 21st Century; we shouldn’t be talking about people not having access to electricity. It’s a shameful thing that Africa does not have access to electricity, and that is why as President of the African Development Bank, I made it our number one priority to light up and empower Africa. We’re investing $12billion in that sector (power) in the next five years, and to leverage $45 to $50billion from the private sector to help us address that particular problem.
The other thing we are doing as well is, we’re working to make it easier for banks to lend more to the agricultural sector. At the end of the day, it’s all about risks and returns. But you know people always think of agriculture as risky. Well, you know that flying planes are risky, crossing the street is risky, and there is nothing you do that is not risky in life. But we have great programmes like the one I mentioned in Nigerian (NICEL) that is very successful in accelerating lending from the private sector to the agricultural sector. We are going to do a lot more than that. The African Development Bank is helping to scale that up into many other countries.
Finally is, at the end of the day, public policy in agriculture has to focus on farmers. The farmers have to be the centre of everything. That was what I did when I was the minister of agriculture in Nigeria, when we used the power of the mobile phone to reach over 15 million farmers, which included seeds and fertilisers by vouchers on their mobile phones. That technology today is now being used in as far as Afghanistan, and is now being scaled up to about 35 African countries. So the point I’m making is, to make agriculture work, we need a lot more investment in infrastructure, and in energy. We need to take advantage of the mobile phone technology to reach farmers, and also make sure that we can get finance to farmers and agro businesses.
Now that you mention technology and infrastructure, what role do you think science will play in the growth of agriculture?
Let me say that ideologies don’t feed people. It is science that does. Sometimes, people are afraid of science; and sometimes when people hear things like hydrogen peroxide, they think it’s genetically modified crops, but no, it’s not. We have today a lot of technologies to feed African countries, and what we have to do is to ensure that those technologies go to scale.
Let me give you two examples of those technologies. One is called the Water Efficient Maize for Africa. This water technology when I was in the Rockefeller Foundation in the 90’s was founded from the Foundation, the Gates Foundation, and the Howard Buffet Foundation. That technology allows the farmers to get very good yields of maize even under the harshest of drought conditions, it’s amazing. It allows Zimbabwe to be able avoid drought just because the farmers are growing it. That technology is there, and it can benefit Lesotho, it can benefit Nigeria, it can benefit Swaziland, and so many countries of Africa.
But why is it not going to scale?
The other technology, which I think is a very important technology still, is the case of Cocoa Hybrid, and it was developed in Nigeria. It allows you to reduce the time it takes for your cocoa to mature by half, and it almost gives you about five times increased yield. But why is it not going to scale of millions of farmers? That is why the African Development Bank decided to do something about that.
We are now focusing on a new platform that we are creating that is called, Technologies for African Agricultural Transformation (TAAT). It’s an initiative we are putting in place to mobilise $1billion to take all the available technologies on the shelf today – Agricultural technologies, and take them to the scale of millions of farmers all across Africa. We are working together with the World Bank; we are working with Bill and Melinda Gates Foundation, and the Alliance for Green Revolution in Africa.
And finally, is to also realise the importance of these technologies when it comes to the agricultural sector. Let me say in the next 10 years, it’s more likely that farmers that you see may not be wearing jumper suits. They may just be sitting in their houses, using the mobile applications to control a bunch of tractors on their farms to be producing food for them. That is how fast the world is growing with agriculture. That is the importance of artificial intelligence and robotics in agriculture; they will play a big role.
So we must change our educational system. We must get it out of our head that agriculture is there, and know that agriculture is a mega business and industry. I think it’s very important for us to change our educational system to modernise agriculture, and get ready for a new type of agriculture in the world that is going to be different from what we know now.
Beyond the demographics you mentioned earlier – youths, gender, rural, urban, employed and unemployed and all that, what other roles do you think
African governments can play to grow Agriculture?
I think first and foremost, we must not let our farmers be like rickety boats, forgotten on the Indian Ocean or Atlantic Ocean; buffeted by every single thing that comes. What I mean is, Africa must fully support it’s farmers. In the United States, farmers here are very, very rich. The reason they’re very rich is because they have a strong support from their governments. So first, we must strongly support our farmers with the right policies, with access to finance, with access to the infrastructure that they need to be able to connect to markets.
The second thing I think is very important for our governments to also do, is to also make sure that we support the establishment of what I call staple crops processing zones all across Africa. Take the case of Nigeria, the food processing companies are all sitting in Lagos, and they’re bringing in raw materials as intermediate and finished products, and transport them to the rest of the country. That doesn’t create jobs; and it is far away from where the producers or farmers are.
The question is: Why is it that in Africa our Agribusinesses and food processing companies are located in areas close to the ports and not in the rural areas where the crops are, and where so much of it is being lost? The problem is lack of infrastructure. So governments must invest heavily in the provisions of power, road, water and other infrastructure.
These zones that I call the Staple Crops Processing Zones are zones that the African Development Bank, and others want the African governments to invest in; and we will support them to put in place power, water, and roads. Then that would create a different environment where the agribusinesses and food processing companies can locate themselves with appropriate fiscal policies, closer to where the farmers are producing. It therefore thrives on all the produce there instead of moving them out of the rural into the urban areas. This will totally transform the rural economies and make agriculture totally different. What we need are structural policies like these, and the African Development Bank will support such efforts.
In terms of fiscal policies, would you support the exemption of agriculture equipment like tractors and the rest from taxes and levies?
Absolutely. I think that being an agrarian economy, we shouldn’t tax agricultural equipment that smallholder and commercial farmers need to work with. I’m a big fan of no taxes on equipment, because you will get more taxes when people produce more, and the agro-allied industries work, you can tax those. But the basic implements that they need to be able to do that should be exempted from taxes. I think that some countries are doing that.
The other thing I think should be exempted from taxes, is the use of solar panels. Most of rural Africa today where you have agriculture, it’s going to take a long time for the grid system to get there, and yet you need irrigation, you need solar powered pumps to do that. You need people to be able to store their products, process them and do everything in the rural areas. But they can do that through access to solar power technologies.
At the African Development Bank, we are pouring a lot of money into that sector, in particular, off-grid systems. But when the solar panels are very expensive, it becomes very difficult for the rural folks to invest in it. So there should be fiscal policies that are favourable to solar companies that are powering the rural areas, and they shouldn’t be taxed.
Despite all the talks about investments in infrastructure, we still don’t have enough investment in storage facilities like silos, so even the little that we produce are lost after harvesting. Also, the ones that are saved are being rejected at the export destinations. What is AfDB doing to salvage the situation?
First, I think that modern agriculture requires that you have very good storage systems that allow farmers to preserve their products. But you also need to have giant warehouses where farmers can store their produce, and also have receipts for their produce, which you call warehouse receipts. In other words, they can store their produce, and use that receipt to go and borrow money from the bank, and there’s a futures market where someone can sell the produce later on in the future.
We need to have functional modern agricultural exchanges, and investment in those silos. I was delighted that when I was in Nigeria, we finished all the silos, and we started a programme to concession them to the private sector. African countries should let the private sector to actually do a lot of that.
But also when it comes to the issue of food, it’s not only just that you’re producing enough food. The question we must ask is: how safe is the food? Food safety is very important, and we must support agencies that ensure we have high quality, nutritious and safe food supply to the people. I think the ability to meet standards is very important, and I don’t see why one should worry about grains and standards in international markets, but then hold oneself to a lower standard for the local market. The life of a person sitting in Lagos, Kano, Kaduna, or Port Harcourt is equally as important as anybody sitting in London, or New York. So we must have better food safety system. Same thing applies to other African countries whether you’re in Cote D’Ivoire or you’re in Accra, or in Nairobi. We just need a better food system.
Another thing that is of great concern to me is, the whole issue around the problem of malnutrition. You can have a lot of food, but still have a lot malnourished people just because they’re not eating the right kind of food. This has become a big problem now globally with increasing malnutrition, increased level of obesity, and also increased level of stunting especially among children.
For instance, in Africa we have 54 million kids that are stunted, meaning they’re too short for their age. What that means is that you’re losing as a continent about $25billion a year from that because stunted children today will lead to stunted economies tomorrow. A stunted child means the cognitive ability is actually compromised as well. I’m a big supporter of the need for us to eliminate malnutrition, and also eliminate stunting in Africa. This is very important for the future of our kids, and the future of the continent. So what we eat is important and nutritious food is very important.
Can we have this quality good food or produce without pesticides and insecticides? Also, what is AfDB doing in that regard?
The fact is what makes a nutritious food is not only how the food is produced, it’s really what you eat, and we eat a lot of starch. A lot of food that we eat in Africa are nutrient deficient, but they’re energy rich. Therefore, people just eat a lot of food, and you have a lot of obesity as well. You have lack of significant vitamins like iodine and zinc, which are very important. I think that we must have diet diversification, because we must eat well to be able to live well.
The other part, which I think is very important is that there’s a lot going on today about how to reduce the level of pesticides in food production. For example, there is a technology that produces maize, called BT Maize, it’s not GMO maize, it’s just a regular technology maize that allows the maize crop to be resistant to pests and diseases. We also have the same for cotton. Because these are based on natural resistant traits, you don’t have to use a lot of pesticides on it.
I think organic farming is gaining ground for those that can pay for it, because at the end of the day, people eat only what they can afford. At the end of the day, it’s just good regulation, making sure that we watch whatever we eat, and ensure we eat regular food like iodised salt, bio-fortified food with zinc and vitamins is very important. This is important because everybody in the urban areas now rush to the supermarkets to buy food. Most of what you buy in the supermarkets are processed foods, they’re rich in energy, but are very deficient in nutrients and vitamins. What we have to do is to ensure we give people nutritious food and good regulation is very important.
I’m particularly concerned about the level of rise of slumps in African countries, and a lot of the poor people live in these slumps, and lack access to water, hygiene, and sanitation, which make it easier for people not to eat very well. So, we have to control and improve the quality and safety of the informal food markets that the urban poor actually depend on. We have to ensure that both the rich and the poor are protected.
Finally, while the debate on GMOs and organic food rages, what is the AfDB and it’s partners doing to ensure this agricultural transformation?
For the agricultural transformation, and for the African Development Bank, we have five priorities when I became the President. We have light up Africa, feed Africa, industrialise Africa, Integrate Africa, and improve the quality of life of the people of Africa. On the basis of this is actually getting agriculture moving as a business.
What are we doing in agriculture? We have the feed Africa goal, which is to get African countries self sufficient in food in the next 10 years, and to ensure Africa adds value to every single thing it produces.
For example, we’ve launched a major effort to support the industrialisation of cotton, and the industrialisation of cocoa. We produce most of the cocoa, but we don’t make money from chocolates. If you look at it, the process of cocoa may decline but never the price of chocolates. Also, the price of cotton may fall but never the price of textile and garments. So we are supporting the industrial development of these sectors, and the African Development Bank is investing $24billion in the agricultural sector over the next 10 years, because we believe that agriculture taken as a business is what will enable African economies to diversify.
It will also allow them transform their rural areas very fast, and to create a lot of jobs, to reduce their food dependency on imports, and to actually earn a lot of foreign exchange. Agriculture is a lifeline for African economies, and African Development Bank believes it’s the fastest way to have inclusive development, and take millions out of poverty. Obviously with my passion for agriculture you can guess why we’re doing this.
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