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CHAPTER 4 Agricultural Growth Corridors – Unlocking Rural Potential, Catalyzing Economic Development

Sean de Cleene[1]

African agriculture has, on the whole, been characterized by low yield levels. Yet, as a continent it has significantly untapped potential in terms of productivity and agricultural growth. Infrastructure constraints, the high risk in complex value chains, and a traditional lack of government prioritization of agriculture, have historically provided limited incentive for investment. Agriculture represents 65 percent of African full-time employment, and an estimated 85 percent of the population is directly dependent on the sector for its livelihood. Increased productivity has the potential to improve the livelihoods of the rural poor and to enhance food security.

By entering into transformative public-private partnerships, Yara International ASA has played a catalytic role in developing the agricultural growth corridor concept, the rationale of which is to leverage investment and demonstrate a sustainable growth mode. With good soil and climate conditions, backbone infrastructure, and targeted catalytic financing there is great potential to cascade investments along the agricultural value chain.

The combined effect, should both the Beira Agricultural Growth Corridor in Mozambique (BACG) and the Southern Agricultural Growth Corridor of Tanzania (SAGCOT) be realized to their full potential, is the lifting of more than three million rural poor out of poverty. Through the leveraging of potential investments of about $5.4 billion, annual agricultural revenues could increase accordingly by $2.2 billion.

Despite decades of neglect, African agriculture has the potential to reclaim its former position as the main mover of economic growth on the continent. Africa has failed to cope with population growth since the early 1960s; in many cases productivity rates were stagnant or even in decline. Agricultural GDP growth toward the end of the first decade of the new millennium rose to about four percent. This demonstrates that potential exists for much more substantial growth if the various sectors come together to accelerate productivity rates in a sustainable way and in line with increasingly transparent and improved market dynamics.

“The underdeveloped agricultural sector presents one of the most serious structural limitations to growth,” the Africa Progress Panel claims, pointing to “severe under-investment” having left crop yields virtually stagnant at a mere quarter of the global average.[2]

Africa has in recent years taken great strides to move agriculture back to the top of its political and developmental agenda. One notable, high-level policy initiative is the 2003 Comprehensive Africa Agricultural Development Program (CAADP) document; it outlines Africa's agriculture strategy, which includes a calling upon the private sector to help accelerate growth in the sector.

  • [1] Vice President, Global Business Initiatives, Yara International ASA.
  • [2] Africa Progress Panel, “Doing Good Business in Africa: How Business Can Support Development”, 2010.
 
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