This piece is part of the weekly series “Growing Forward: Insights for Building Better Food and Agriculture Systems,” presented by the Global Food Institute at the George Washington University and the nonprofit organization Food Tank. Each installment highlights forward-thinking strategies to address today’s food and agriculture related challenges with innovative solutions. To view more pieces in the series, click here.
When African leaders gathered this year at the Africa Food Systems Forum, in Dakar, they faced critical opportunities. They are charting sustainable financing pathways to help transform food and nutrition futures while confronting geopolitical shifts and budget cuts across the G7 countries. Those cuts, including the dismantling of the U.S. Agency for International Development earlier this year, have left Africa’s food and agriculture systems dangerously exposed.
While the exact size and depth of the cuts and their impact are still unclear, ONE’s engagement with African agribusiness leaders indicate early signs of reversals of progress on farmer productivity, gender and youth engagement, climate resilience, nutrition security, and market access. Already burdened by climate shocks and strained by international trade wars and the burgeoning debt crises, African governments are struggling to fill the gaps. Sadly, the most vulnerable—children, women, the displaced and the elderly—will bear the brunt of the cuts unless urgent action is taken to develop sustainable financing pathways. This will require African-led solutions, leveraging data and innovation, investing in policy alignment, and private and public solutions to ensure food security for millions and safeguard nutrition for future generations.
Given the diversity and complexity of the food ecosystem on the Continent, approaches to filling the gaps and truly propelling a pathway to self-sufficiency in financing the transformation of the agrifood landscape will need to be tailored to the unique country context. But there are at least six opportunities that leaders in the ecosystem should consider, adopt, and implement:
First, each country must develop a robust understanding of the public and private funds that are currently available at the federal, state and local levels to drive food systems’ transformation. This will require considerable engagement beyond formal budgets from the ministries of agriculture. But it will require an ecosystem approach to capture the funds available for other key components including research, humanitarian food aid interventions, manufacturing, and climate-smart infrastructure to drive value addition and logistics to enhance regional trade.
There must also be a commitment to improve the efficiency and effectiveness of the use of these funds, instituting robust systems and structures, leveraging AI to ensure transparency, accountability and reporting on the use of the funds. This data will also enable stakeholders to re-allocate funds from where they are being underutilized to the highest areas of need and impact.
Second, African countries must design cohesive and robust national agrifood research infrastructure supported by the private sector to drive demand-driven research and sustainability. The Continent invests under 1 percent of its agricultural GDP in research—with allocated budgets often under-disbursed—resulting in underfunded, understaffed, and ineffective institutions.
In a much-needed shift, governments could prioritize modernizing research infrastructure, improve internal management, and strengthen coordination across universities, research institutes, and farmer extension services. Critically, they can try establishing accountability frameworks, including volunteer advisory boards, complete with farmer engagement to set the annual research agendas, track demand-driven impact, and attract private-sector funding.
Nigeria alone, for example, has over 60 research institutes, six dedicated agricultural universities and over 75 universities that offer degrees in agriculture. However, this research landscape is not funded or shaped by the private sector; this results in a disconnect between these institutions’ activities and their impact on sector transformation. In contrast, Côte d’Ivoire provides an exemplary model: its National Center for Agricultural Research (CNRA) is largely funded by private producers through the Inter-Professional Fund for Agricultural Research and Extension (FIRCA) which directs 75 percent of subscription fees into commodity-specific research.
Third, the public sector could create enabling policy frameworks and support national de-risking instruments that attract private sector financing. The recent 16th Malabo Montpellier Panel report, MONEYWISE: Policy Innovations to Finance Agrifood Systems, estimates that the private and public sectors on the Continent will need US$77 billion annually until 2030 to propel food systems in Africa. Case studies from Malawi, Morocco, and Rwanda demonstrate the promise and potential impact of innovative financing models including funds, coupled with policy and institutional engagement from development banks and capital market authorities.
Specifically, in the case of Morocco, robust national plans–Plan Maroc Vert and Strategie Génération Green–provided the ecosystem policy framework, and propelled de–risking and incentive interventions which attracted private sector investment, doubling agricultural GDP. Similar ecosystem solutions are required across the Continent and demand a bold commitment to private, public and civil society partnerships that invest in robust roadmaps and accountability frameworks, similar to the Moroccan example.
Fourth, African nations could generate new tax revenue directly linked to the exportation of unprocessed food commodities. For example, Africa produces over 75 percent of the world’s cocoa, yet receives barely 2 percent of the global profit. Export taxes that favor domestic processing, like Côte d’Ivoire’s 14.6 percent levy on raw cocoa beans, can generate revenue while incentivizing value addition.
Beyond exports, “sin taxes” on unhealthy foods and sugary drinks both reduce the health burdens and costs associated with treating the linked diseases but also generate revenue which could be allocated to drive food systems transformation without placing further strain on public budgets. South Africa generated over US$400 million in revenue within two years of introducing its sugary drinks tax in 2018.
In addition, civil society organizations must play a critical role in educating the public about the benefits of these additional taxes and hold governments accountable for how they are utilized to promote value addition and reduce the cost of locally sourced nutritious food.
Fifth, African countries can create credible and innovative mechanisms for diasporic investment in the agrifood industry. The African Diaspora sends home over US$100 billion in remittances annually, which can be systematically channeled toward driving agrifood transformation. Partnering with nonprofit organizations such as African Food Changemakers, an online community of entrepreneurs from 50 African countries, would provide access to the credible business opportunities for interested investors from the Diaspora.
In addition, the Africa Food System Forum and other convening platforms could create virtual and in person deal rooms for the Diaspora to connect with credible venture and private equity fund managers operating on the Continent, allowing for pooling of resources to drive investment and scaling.
Finally, global food and agriculture infrastructure must prioritize the transfer of data, logistics, production, delivery mechanisms and the associated funding mechanisms to trusted African institutions. More specifically, global institutions like the International Fund for Agricultural Development, the World Food Programme, the U.N. Food and Agriculture Organization, and the CGIAR system should focus on strengthening local organizations and transition planning for research systems, seed banks, and other forms of intellectual property, procurement and the management of humanitarian and school feeding programs, critical to the growth and self-sufficiency of the African food ecosystem. This will require clear signals from the major G7 government and philanthropic funders, with the necessary incentives and timelines for country ownership.
It is time for African leaders to recognize the opportunity to develop robust pathways to finance the food systems transformation required to truly drive growth and nutrition security. What is needed now is the political will and accountability from governments to develop robust financing policies, the mechanisms to channel domestic resources to strengthen the capacity and efficacy of the public sector, the engagement of the private sector to drive sustainable and inclusive growth, and the full participation of civil society to ensure that no one is left behind.
Photo courtesy of CIMMYT/ Peter Lowe
