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7 Infrastructure Backbone

The agricultural growth corridors lie on existing infrastructure backbones, which have to be enhanced and extended. Infrastructure is a main prerequisite for economic development, and for agriculture. A number of studies support this analysis. Pointedly, the subtitle of a joint report of the Agence Française de Développement and the World Bank on Africa infrastructure reads: “A Time for Transformation.”[1] The report says that the infrastructure networks “increasingly lag behind” those of other developing countries, with power generation representing the largest challenge. Although infrastructural shortcomings represent a major business constraint, depressing productivity, they have been responsible for more than half of Africa's recent improved growth performance, demonstrating the potential for further contribution. According to the Infrastructure Consortium for Africa (ICA),[2] inadequate infrastructure is holding back Africa's economic growth per capita by two percent each year, and reducing firms' productivity by as much as 40 percent. “In order for Africa to become competitive, or realize its productive potential,” the ICA states, “massive improvements in infrastructure is needed.”[3] Adding to the challenge – and the costs – is the fact that Africa is the continent with the greatest number of landlocked countries.

The high cost of transport services represents a major constraining factor for agricultural productivity and profitability. Often at twice the cost of other regions, it increases production and transaction costs making vital inputs such as seeds and fertilizers prohibitively expensive and outputs uncompetitive on the international market. Africa's infrastructure deficit is described by the Center for Stratetgic & International Studies (CSIS) as such: “Physical access to markets is far more restricted among farmers in Africa than among farmers in other regions of the developing rural world. Only a quarter of African farmers are within two hours of markets by motorized transport as compared to nearly half of farmers in Asia and the Pacific and 43 percent for the developing rural world.” CSIS also notes that the intensification of African agriculture depends “in a very crucial way” on developing markets and related institutions. In the absence of functioning markets, the center states “rural areas remain trapped in subsistence-oriented economies in which neither the agricultural production sector nor the wider rural economy can grow.”[4]

Fig. 2. SAGCOT – Infrastructure backbone

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A critical part of modern infrastructure is not only market access, but market information. Most often cut off from the markets, African smallholders have been at a disadvantage when negotiating the terms of transactions. In recent years, price information – and financial services – are readily available through the extension of ICT, not least mobile phone services such as the M-pesa in Kenya.[5] Through wireless digital technology farmers can also gather agricultural advice, and thus increase their yields.

At the African Green Revolution Forum in Accra in 2010, the president of IFAD, Kanayo F. Nwanze, put it succinctly: “Smallholder farmers need roads and financial services not handouts.”

  • [1] World Bank, “Africa's Infrastructure. A Time for Transformation”, 2009.
  • [2] The ICA was launched at the G8 Gleneagles Summit in 2005, made up of bilateral donors and multilateral agencies, working to scale up investments in African infrastructure, from public, private and public-private sources.
  • [3] According to the ICA; icafrica.org.
  • [4] CSIS, “Agricultural Productivity in Changing Rural Worlds”, 2010
  • [5] M-Pesa is a mobile-phone based money transfer service offered by Vodafone in Kenya, a concept initially conceived for allowing microfinance borrowers to receive and repay loans by mobile connectivity.
 
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