UN ECONOMIC COMMISSION FOR AFRICA

1. DEVELOPMENT EFFECTIVENESSIN AFRICAApplying Mutual Accountability in PracticeAgricultural Performance and Trade Issues:Achievements, Constraints and Challenges UN ECONOMIC COMMISSION FOR AFRICA

2. PRESENTATION OUTLINE • Importance of agriculture for achieving the MDGs in Africa • Constraints, opportunities and challenges for the development and structural transformation of African agriculture • Action frontiers and performance monitoring of mutual accountability for agricultural performance and trade issues in Africa

3. IMPORTANCE OF AGRICULTURE (1) • 70% of the poor in Africa live in rural areas • Livelihoods of 90% of rural people depend on agriculture • 60% of the total African labor force is employed in agriculture – plus non-farm urban employment linked to agriculture • Backward and forward linkages between agriculture and other economic sectors are important for economic growth – inter-sector growth multipliers of 1-5 to 2.7 • Go beyond a narrow perspective of agriculture as farming to a comprehensive approach to the food and agriculture system including: technology; input markets; farm production; product processing, marketing and trade

4. IMPORTANCE OF AGRICULTURE (2) • Structural transformation of the food and agricultural system in Africa is key for: • Reducing poverty through broad-based economic growth • Enhancing food security • Developing the domestic/regional markets • Creating value-added and employment • Improving the export performance • Agriculture features as top-priority productive sector in key initiatives for Africa’s development: AU/NEPAD, Millennium Project, Commission for Africa, and this Mutual Review

5. CONSTRAINTS, OPPORTUNITIESAND CHALLENGES (1) • Lack of sufficient and consistent priority given to agriculture by African governments and development partners • Internal and external factors have impeded a cumulative process of agricultural transformation • Internal constraining factors include: • Ineffective or misguided policies • Weak regional integration of commodity chains • Poor access to financing and insufficient investment • Poor infrastructure • Inadequate development/management of the natural resources • Poor access to agricultural innovation • Recurrent risks of natural disasters (climate pests, etc.)

6. CONSTRAINTS, OPPORTUNITIESAND CHALLENGES (2) • African agriculture is seriously undercapitalised -- more domestic investment and development assistance is needed for improving the supply side • There are encouraging success stories to build on, e.g.: • Decline of malnutrition rates in West Africa due to significant increase in food and export crop production • Nigeria is No. 1 producer of cassava in the world • success of horticultural exports in such countries as Kenya • Food and agriculture systems are constrained by missing or incomplete markets, e.g. for rural credit or transport. Food-surplus regions face difficulties in supplying food‑deficit ones

7. CONSTRAINTS, OPPORTUNITIESAND CHALLENGES (3) • New strategies are also needed to address 2 key constraints: • Agricultural commodity price volatility and the related challenge of finding affordable price stabilization and insurance mechanisms • Declining international commodity prices and the challenge of diversification, productivity increase and value-addition in agriculture • African agricultural markets are fragmented in sub-optimal national/sub‑regional segments, relatively closed to each other, but open to imports from outside Africa • Need to to accelerate and deepen regional integration of strategic agricultural commodity chains

8. CONSTRAINTS, OPPORTUNITIESAND CHALLENGES (4) • Externally, African agriculture has been hurt by protectionist (tariff and non-tariff) policies, domestic agricultural support, export subsidies and “dumping” by OECD countries • Multilateral trade reforms under the Doha Development Agenda present both opportunities and risks for African agriculture • Adequate mechanisms are needed to help African countries deal with short‑run adjustment costs and to offset negative effects from the erosion of preferences

9. CONSTRAINTS, OPPORTUNITIESAND CHALLENGES (4) • AU/NEPAD CAADP is a framework of consensual policies and priorities for African governments, regional organizations, farmers, private agribusiness, and development partners • Endorsed by African Heads of State and Government, 2003; and supported by the Maputo Declaration on agriculture, and the Sirte Declaration on Agriculture and Water • NEPAD has just completed a planning exercise resulting in sub-regional/regional Priority Action Plans and Early Actions for the implementation of the CAADP pillars: • Land and water resources development • Rural infrastructure and trade capacities for market access • Food supply chains and responses to emergency food crises • Agricultural research, technology dissemination and adoption

10. ACTION FRONTIERS -- AFRICAN COUNTRIES • Fulfill commitments to increased investment in agriculture and rural development • Implement NEPAD CAADP, with emphasis on intra-regional trade and research and development efforts in agriculture • Promote public and private sector institutional development and partnerships for agricultural price stabilization, risk insurance, credit, infrastructure and extension services • Promote public-private partnerships for contract farming and private investment in agro-processing and extension services • Participate in international co-operation to offset price fluctuations of key commodities of importance to Africa • Establish an African-wide schools nutritional program

11. ACTION FRONTIERS -- OECD COUNTRIES • Deliver reform on the three key pillars of agricultural negotiations in the Doha Development Round – market access, export subsidies and domestic support • Up-scale aid to the agricultural sector and provide support for the NEPAD CAADP • Assist African countries to cope with trade adjustment problems resulting from commodity price trends and preference erosion • Re-evaluate scope and effectiveness of international mechanisms to cope with external shocks caused by extreme price fluctuations of key commodities • Assist African countries to advance trade facilitation efforts

12. PERFORMANCE MONITORING • NEPAD/CAADP provides for a monitoring and evaluation mechanism that can be used for tracking progress on most action frontiers for African countries • This mechanism needs to be completed and supported within the framework of the ECA-OECD Mutual Review process THANK YOU.