Agriculture Sector Strategy AFRICAN DEVELOPMENT BANK GROUP Agriculture Sector Strategy 2010 - 2014 (Major Highlights) By Dr. Chiji OJUKWU Manager Agriculture and Agro-Industry Department AFRICAN DEVELOPMENT BANK GROUP

Context Global Financial Crises 2008 World Development Report (WB) At a time when Africa was building foundation for higher growth and poverty reduction 2008 World Development Report (WB) Agriculture remains the main source of growth for the agriculture-based countries and can reduce poverty and improve the environment Global Food Crisis Africa’s recent gains in economic growth and macroeconomic and political stability risk being jeopardized by the 2008 food price increase - Response Climate Change Undesirable effect of climate change on agriculture sector AfDB/IFAD Joint Evaluation Concludes AfDB should remain engaged in the Sector, but should be more focused, selective and innovative

Strategic Framework for the Bank AgSS Millennium Development Goals Goal of eradicating poverty (by 2015) and hunger and ensuring environmentally sustainability NEPAD-CAADP: Framework for accelerating agricultural growth in the Africa: at least 6% annual rate of growth Platform for collaboration, partnership and alliance building. CAADP compacts guides country policy and investment response - allocation 10% of Budget to Agriculture ADB Medium Term Strategy, 2008 – 2012 Vision: To be recognized as preferred partner in Africa, providing high- impact, well-focused development assistance and solutions Priority Areas: Infrastructure, Governance, Private Sector, Higher Education Investment Support: Poverty Reduction, Agriculture, Regional Integration, Human Development

Bank Group Approvals, 1967-08 (% Distribution by Sector)

Bank Group Approvals, 2008: Distribution by Sector The 2008 figures include private sector investments which is skewed against agriculture

Trend of Bank Group Agricultural Portfolio Performance, 2006 2009 Improving trends due to: more supervision, delegation of authority to Field Offices, and better staff skill mix

Lessons and Best Practices Strategic Financing of the Sector: ADB to remain engage in the sector, but in a more focused, selective and innovative manner Adequate Policy & Political Framework necessary for agricultural development: Bank to support increased capacity of RMCs for analytical work in the area of policy development Purposeful Partnership based on comparative advantage adds value to agricultural interventions in RMCs; to engage more with the private sector Agricultural Water Development contributes to growth and Poverty Reduction Capacity building sustainability of ARD initiatives needs Support RMCs capacity needs assessment and institutional building

Guiding Principles for Implementation of the AgSS Selectivity and Complementarities Country Ownership / Alignment RESULTS FOCUSED Stronger Partnership Knowledge Generation and Dissemination Gender Focus Environmental Accountability

AgSS – Bank Focus

AgSS Pillars and Areas of Intervention – Pillars 1 & 2 of the four CAADP Pillars Pillar I: Agricultural Infrastructure RURAL AND COMMUNITY ROADS MARKET/STORAGE INFRASTRUCTURE AND AGRO-PROCESSING AGRICULTURE WATER AND WATER STORAGE OTHER INFRASTUCTURE (Supporting Fisheries, Livestock, etc) Pillar II: Renewable Natural Resources RENEWABLE NATURAL RESOURCES MANAGEMENT (including Forestry) CLIMATE CHANGE (Mitigation & Adaptation)

AgSS Value Chain – Objectives, Purpose and Strategic Goal Strategic Objectives To improve agricultural production and marketing infrastructure , and ensure long-term and profitable use of natural resources Purpose of the AgSS Agricultural Productivity and Income Enhanced on a sustainable basis AgSS Strategic Goal Contribute to sustainable food security and Agriculture-led growth in Africa

Indicative Pipeline of Projects / Programs for Financing, 2010 - 14 Pillar I Pillar II Cross-cutting

CAADP/AgSS Pillars - ADB Interventions with OTHER PARTNERS CAADP Pillars / Areas General Areas AfDB Development Partners Pillar I: Extending the area under sustainable land management and Reliable Water Control Systems Land and Forestry Management Other infrastructure (including Forestry, fisheries, rural energy, etc) OPEC Funds, IsDB, BOAD, Kuwait Funds, Saudi Funds, World Bank Water Control System Agricultural Water and Water Storage Improved Water Quality Management WB, IFAD, IsDB On-Farm Management Renewable Natural Resources management / Climate Change FAO, IFAD, UNCCD, IUCN, EU, GEF Secretariat, World Bank, OPEC Funds, IsDB, BICEC, WMO, UNECA, AU, ACMAD, ICPAC, CIDA, SIDA, AGRA Pillar II: Improving Rural Infrastructure and Trade related Capacities for Market Access Rural Infrastructure Development Improvement of Rural and Community Roads Market Access Market / Storage Infrastructure and Agro-Processing IsDB OPEC Funds, IsDB, BOAD, Kuwait Funds, Saudi Funds, World Bank

Pillar III: Increasing Food Supply and Reducing Hunger CAADP/ AgSS Pillars - Interventions by OTHER PARTNERS INDIRECT ADB ROLE CAADP Pillars / Areas General Areas AfDB Development Partners Pillar III: Increasing Food Supply and Reducing Hunger Agricultural Inputs SI (AFFM) IFAD, IsDB, WFP Rural Financing/ Risk management Private Sector WB , IFAD , IsDB Crop Development / Special Food Production Initiative SI (NERICA) WB, IFAD, IsDB, WFP Safety Net Programs WB, IFAD,WFP Pillar IV: Agriculture Research, Technology Dissemination and Adoption Breeding and Multiplication and Extension Services Support CGIAR IFAD, FAO Others Livestock/ Fisheries Infrastructure Only IsDB Information for Agricultural Strategy Formulation and Implementation Special Initiative IMF, WB Capacity Strengthening for Agriculture and Agri-business IFAD Gender Mainstreaming/ HIV Direct Role WB, IFAD, IsDB

Key Agricultural Sector Performance Indicators by 2014 Outputs Outcomes 10,000 KM of rural roads built and/or rehabilitated 4. 50,000 people trained in good agricultural practices 1. Yield Increase: 15-20% 2. 500,000 Ha of land under improved water management** 5. Twenty five percent decrease in agricultural land and forests degraded 2. Reduction in post harvest losses 3% over six years (0.5% per year) 3. 8.5 billion Cubic meters of water mobilized for multiple purpose development** 6. Seventy five percent of Bank agricultural operations are climate proofed 3. Production increase: 5% per annum **Prepared and secured necessary investments by 2014 for operations to develop 500,000 ha under improved water management and increase water storage capacity by at least 8.5 billion cubic meters.

Risks and Mitigation Measures Difficulty of establishing modus operandi with other partners Advocacy of the AgSS to stakeholders and ensure stronger link with DPs at an early stage. Design more efficient business processes. Likelihood of slippages in government implementation performance due to inadequate capacity Support Continental capacity building program for Ministries of Agriculture Inadequate enabling environment for private sector participation Support Rural infrastructure and policy reform Unwillingness of RMCs to make investment in the sector due to exogenous factors Awareness that food security implies increasing domestic production, and that food availability is a function of socio-political stability. Apro Financing instr.

Implementation Arrangements Action Plan for Implementation for period 2010 – 2014: accompanying the AgSS Mid-Term Review of the AgSS: By 2012 Program of Operations: Lending pipeline envisaged 75 projects / programs for a total of UA 1.71 billion over the period, using Bank’s financial instruments Internal and Institutional Arrangements: Implementation of AgSS will draw from the human and institutional capacities available in various Departments of the Bank – with clear division of responsibilities, & properly restructured approach for organizational effectiveness Financing Instruments: Those already in use by the Bank (public/ private sector loans/grants, Budget Support, SWAPs, LoCs, Private Equity Results Monitoring and Evaluation – in line with Paris Declaration principles and country/Bank result monitoring, measurement framework

Partnerships Enhance Strategic Partnership with IFAD, FAO, IsDB, OPEC Fund, WFP, BOAD, & WB and other MDBs and bi-laterals. Cooperate with other IFIs through the CAADP process at the country, regional, continental levels Engaging the Private Sector in the Agriculture Sector Strategy Align to the Country System and Development Programs

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