High Level Conference on the Development of Agribusiness and Agro-Industries in Africa The African Agribusiness and Agro-industries Development Initiative

High Level Conference on the Development of Agribusiness and Agro-Industries in Africa The African Agribusiness and Agro-industries Development Initiative (3ADI)

Executive Summary The 3ADI presentation is delivered in 3 Modules First, is the introduction and context Second, is the Program Framework: 4 main areas Third, is the Program Approach: building on other initiatives in Africa and means to build alliances. Main Messages: 1.We are not re-inventing the efforts in Africa but rather build on them 2.Great opportunities exist in agro-industries for serious interventions and building of capacity: HR and Technology

Overture What makes 3ADI different Developed by Africans Proposed, written, and presented by Africans. Its about financially and commercially viable interventions Its about adding value It links with the private sector, especially small producers and processors

what we are aiming at A programme for the promotion of agribusiness and agro-industries development endorsed by African Heads of State and Government (HOS). Agreement to establishment financial modalities for agri-business and agro-industry investment endorsed by HOS. Action plan for programme implementation and financial mechanisms endorsed by HOS. Launching of the African Agribusiness and Agro-industries Development Initiative (3ADI) 3ADI Expectations

3ADI How did we get here? Global Agro-industries Forum (GAIF), New Delhi, India, April 2008 Hosted by the Government of India Event jointly organized by FAO, UNIDO and IFAD Participation from 110 countries; 500 senior level delegates Representatives of 44 African countries recommended the organization of a regional forum need to consider specific issues and priorities for agro-industries and agribusiness development in Africa Consultations with African leaders and organizations led to the decision to hold this High Level Conference on the Development of Agribusiness and Agro-industries in Africa HLCD-3A www.gaif08.org

3ADI HLCD-3A Co-organizers Government of the Federal Republic of Nigeria (Hosts) African Union Commission (AUC) African Development Bank (AfDB) Food and Agriculture Organization of the United Nations (FAO) International Fund for Agricultural Development (IFAD) United Nations Economic Commission for Africa (UNECA) United Nations Industrial Development Organization (UNIDO)

3ADI Consultative Process 1.Concept Note Developed by UNIDO and FAO 2.Background document commissioned by UNIDO/FAO; Accelerating Agribusiness & Agro-industries Dev. in Africa 3.Expert Group Meeting on Development of Agribusiness & Agro-industries in Africa: Constraints & Opportunities. 27-29 April 2009 Vienna 4.UNIDO/FAO/ Executive Secretariat meetings with the Government of Nigeria on administrative & logistic matters. 4-7 May 2009, Abuja - Nigeria 5.Writers workshop - 26-30 May 2009 Rome

6. CAADP: private sector convening on CAADP implementation, 17-18 June, 2009 - Dakar, Senegal 7. UNECA Expert Group Meeting on Promoting Agro-industry & Agribusiness Development in African Countries, 22-24 July 2009 - Addis Ababa 8. Periodical Meetings of the Joint Organizing Committee; Vienna, Rome, Abuja & Tunis 9.Meeting on Financial mechanisms in Support of Agro- industries & Agribusiness Development in Africa; hosted by AfDB in Tunis, Jan. 2010 10.3ADI document - African Agribusiness & Agro-industries Development Initiative: A Programme Framework 3ADI Consultative process- II

3ADI Needed Investment (I) 1.Capitalizes on renewed impetus for growth & development for Africa through increased agricultural investment 2.Recognizes the need for increased agro-based investments in order to meet food security goals ITEMSub-Saharan Africa 1. Primary Production (including mechanization & other power sources) 496 2. Downstream Support Services (storage; markets & first stage processing) 444 TOTAL 940 Source: Capital Requirements for Agriculture in Developing Countries to 2050, FAO, Rome, 2009 US$ 15 billion/year in additional investment needed Cumulative Investments over 2005/07 in billion US$

3ADI Needed Investment (II) 3. Recognizes urgent need to increasing profitability (i.e., strengthening effective demand for finance) of agribusiness & agro-industries. 4. Focuses on ways to unlock local capital to meet agribusiness & agro-industry investment needs, especially in short run until public sector investments take hold.

PROGRAMME FRAMEWORK The African Agribusiness and Agro- Industries Development Initiative

The goal of the 3ADI is to have an agriculture sector in Africa which, by the year 2020, is made up of highly productive & profitable agricultural value chains that: 3ADI GOAL & 2020 Targets 1.effectively link SMS agricultural producers to markets; 2.contribute effectively to increasing farmers incomes through value-addition processes; 3.supply higher-valued & differentiated food, fibre, feed and fuel products to consumers at local, regional & global markets; 4.lead to retention of a higher proportion of the consumer price in the communities or countries where the primary production takes place; 5.utilize natural resources in an overall sustainable manner; and 6.act as an effective basis for industrialization & generation of increased & high quality employment

Main Objective To increase private sector investment flows going into the agriculture sector in Africa by mobilizing resources for agribusiness & agro-industrial development from domestic, regional & international financial systems 3ADI Main Objective

3ADI What the Initiative will do? Specifically the Initiative will: 1.Leverage current attention to agriculture in Africa to accelerate the development of agribusiness & agro- industries sectors that ensure value-addition to Africas agricultural products; 2.Support a well coordinated effort to share knowledge & harmonize programmes in ways that capture synergies, avoid fragmented efforts, & enhance developmental impacts; 3.Support an investment programme that will significantly increase proportion of agricultural produce in Africa that is transformed into differentiated high-value products.

3ADI Expected Results Four main results: 1. Enabling policies & public goods; (i)Sector Strategies & Plans; (ii) Legal and Regulatory Frameworks; (iii) Grades & Standards; (iv) Agricultural Mechanization; (v) Markets & Trade Infrastructure; (vi) National & Regional Trade Policies 2. Value chain skills & technologies; (i)Producer, Commodity & Industry Associations; (ii) Value Chains Facilitation; ( iii) Producer & SME Skills Building; (iv) Technology Development & Transfer; ( v) Vocational, Business & University Training 3. Post-production) Contract Farming & Out- grower institutions & services; (i) Contract Farming & Out-grower Schemes; (ii) Business Incubators, Hubs & Clusters; (iii) Research, Technology & Agro-Food Parks; (iv) Product Labelling & Certification Schemes; (v) Commodity Exchanges & Market Information 4. Reinforced financing & risk mitigation mechanisms (i) Public-Private Partnerships;( ii) Loan Guarantees;( iii) Investment Funds; (iv) Value Chain Finance; (v) Risk Mitigation Products;

3ADI 1.Regional groups mostly in agreement with & supportive of 3ADI. Some issues raised are already covered but might need more emphasis (i.e. demand driven approach, chain associations, business regulations, trade barriers, etc.) 2. Issues raised to enhance the impact of 3ADI i.infrastructure (hard & soft), especially energy supply; ii.technology sharing; iii.capacity building at national & regional levels iv.R&D on selected issues a)knowledge mgt & geographical information systems b)waste & post-harvest losses management c)processing equipment v.land tenure / land use vi.South- South cooperation vii.Implementation modalities (national vs. regional strategies) Feedback from Regional Groups

PROGRAMME APPROACH The African Agribusiness and Agro- Industries Development Initiative

the bulk of world food production is still concentrated in few regions 3 1 5 2 4 5 5 5 3 5 Edaphoclimatic Conditions Subsidies: US$ 350 billion/yr

...during the food crisis ( food security ) among the most affected areas, Africa is included & the food import bill of the region have been of US$ 254 billion in (2007), 33% higher than in 2006... Source: IMF, 2008

Source: UNIDO, 2006; MVA Manufactured Value Added although the share of MVA of developing countries has increased in the last 25 years it still responds to a limited amount of the world MVA 30

Source: UNIDO, 2006 and Africa, besides having the lowest share within developing countries MVA has even experienced a decreased from 06 to 03% 5 41 20 31 3 6 47 12

3ADI Programme Approach (I) 1. CAADP Pillar II as overarching Institutional Framework; 2. Integrating into RECs; 3. Priority focus on domestic & regional markets; 4. Public support for engaging the private sector; 5. Synergistic & complementary financial mechanisms; 6. Preliminary ideas on innovative financial facility

3ADI 3ADI contributes to overall objectives of CAADP while addressing primarily its Pillar II Improving rural infrastructure & trade-related capacities for market access CAADP, particularly Pillar II, is the overarching institutional framework Programme Approach (II)

3ADI An African owned initiative it will work closely with African Regional Organizations & Regional Economic Communities throughout all stages of its design, inception & implementation; it should benefit from & be complementary to ongoing initiatives; it will ensure stakeholder involvement through engagement with existing entities that represent agribusiness and agro- industries in Africa Integrated into African Regional Organizations, Alliances & Initiatives Programme Approach (III)

3ADI 1.Domestic food staples in Africa, roughly a US$ 50 billion industry, will double by 2015 ; 2.Growing potential of domestic agri-food markets in Africa, fuelled by rapid urbanization rates & income growth; 3.Increased trade in domestic & cross-border markets alone expected to reach US$ 30 billion by 2030 ; 4.Focus is consistent with priorities identified & pursued by African organizations and policy makers Priority to Domestic & Regional Markets Programme Approach (IV)

3ADI 1.Engagement & cooperation of actors from both the public & private spheres of the African agri- food economy essential for success of 3ADI; 2.Public-private cooperation will be instrumental to implementation (also essential in mgt & oversight) Public Support for Engaging the Private Sector Programme Approach (V)

3ADI Designed to complement & act in synergy with the existing financial facilities, bridging the known gaps & unleashing newer financial opportunities, primarily those that can be supported by the African financial system itself Unique features focus on downstream segments of value chains the strategic emphasis on leveraging financial resources from African banks wider geographical coverage, when compared to existing programs and financial facilities that cover the agri-food sector in Africa. African multilateral organizations & financial institutions will need to play an active role in any governance structure to be established for the 3ADI & its financial modalities Synergistic and Complementary Financial Mechanisms Programme Approach (VI)

3ADI Consultations in progress 1.Parallel meeting of financial professionals is currently being held in another room to consider a concept and framework for financial modalities in support of 3ADI; 2.Concept tabled for discussion envisages a financing mechanism with two windows / channels that will deal respectively with public & private sector type funding; 3.After the outcome of the financial modalities in support of the 3ADI further consultations expected Financial Mechanisms of 3ADI

3ADI What we expect from your deliberations: Discuss & refine the programme framework; Advise on the development of the financing modalities; Provide guidance on moving forward; Commit to its implementation. The Way Forward

3ADI THANK YOU! For more information & follow-up, please check WWW.HLCD-3A.ORG

Documents

High Level Conference on the Development of Agribusiness and Agro-Industries in Africa The African Agribusiness and Agro-industries Development Initiative