Tuesday, 22 September 2015

The Africa I dream of everyday

Photo Credit: ILRI/Stevie Mann

I have just been thinking about Africa lately. Our continent is currently at a crossroads, we can either make it or break it. It is becoming apparent to the world that the future of food production and agribusiness is strongly linked to Africa. The continent still has potential to expand area under production and to intensify production through new technologies. The developed countries are well aware of this and seem to be ready to do business with Africa. But where is the deadlock? Why is the puzzle not fitting together?

In addition to the resources advantages of good land, climate and minerals, Africa has another advantage - a burgeoning and most youthful population. While the developed world has to deal with an ageing population, Africa is carrying a 'ticking time bomb' or a demographic dividend for the continent - the youth. If these young men and women do not get jobs or fail to become true value-creating entrepreneurs, the whole continent could just explode! But if they do get the right skills to stand on the global stage, negotiate mutually beneficial world class business deals the continent could also explode, but this time in a more positive way :-). When Africa's youth get it wired in their heads that 'yes, we can build Africa' - the African continent would explode and the next century could be the continent's golden century.

The 'Africa I dream of' is one idea I am not afraid to share. Keeping it to myself will not help me or anyone else, but if anyone would jump onto it, I am guaranteed that the returns will be positive. Here we go... 'What does Africa need the most?'... money, food?... Well yes, all of that is important to help people to respond to negative shocks in the short to medium term. But I believe what Africa needs the most is 'human capital development.' Yes; you heard me right, 'human capital development.' Let's just call it HCD for simplicity.

In my perspective, HCD is NOT synonymous with education, though education is an essential element of HCD. HCD goes beyond the desk, or college graduation. HCD 'goes beyond the desk, or college graduation'? What does that mean? It means HCD includes a change in mindset and belief system. We might... but we don't always get this kind of support in the classroom or the college halls, (well I speak as far as Africa is concerned). HCD is something that should start and continues in the home and the community in which the school or college is just one part (though a very essential one). HCD is also a cultural issue, it is a continuous, multi-faceted yet targeted process of building the required skill set and belief system into the African child and equipping him and her for the global opportunity. It is the gradual development of the freedom to make informed and strategic decisions whose impacts go beyond oneself and one's immediate surrounding. HCD is about taking the African child and broadening their vision beyond the savanna, and giving them a world perspective. One of my early career mentors, Prof Rukuni, used to say, 'development is about people, helping people help themselves.' A truthful statement I have never forgotten, it actually feels so real whenever I say it or write it.

My dream for Africa in the context of a rapidly urbanizing world, is to see some young men and women decide to stay in the farming community because they 'want to' spend their lives producing quality food for the world's cities. My hope is that this nightmare will end, where the majority of African youths are in farming not by choice but by default - a fate of circumstances largely caused by an HCD gap. My dream is of young Africans who choose to take to the metropolis and build or help build technologies that solve human challenges such as poor access to health services. I dream of young men and women who will choose to code until until they make doing business easier for their fellow farmers through building systems that reduce supply chain inefficiency in Africa.

HCD will empower young Africans to choose to make Africa a better place, in ways that are unique to all of them. HCD will help us find our place. If you ever get the chance to educate an African child or youth, please do it with all your heart, you could be making the first step to taking Africa to the 'next level.' 

On the belief system as part of HCD, the African society has a huge role to play. Noone can do this for us, we have to do this for ourselves. I dream of the young African professional who chooses to say NO to corruption and chooses to put 'delivering value first, before the money.' This is the basic ethic of business... we cannot thrive sustainably without it, for 'one should not expect earn what he has not created value to exchange the money for.' Money will always follow value. I dream of the African youth who will choose hospitality before pride and make Africa the warmest and safest place to be.

Though, all these be dreams for now, I know all this is possible. It is possible when I wake up to do it and inspire you to do it. And when you do it and inspire one more; everyday we will inspire more young men and women to build this 'Africa I dream of everyday.'

Monday, 15 June 2015

Just to give you all a big thank you!

About a month ago, I asked our followers to vote for the Technical Center for Agricultural and Rural Cooperation (CTA) project in a prestigious World Summit on the Information Society (WSIS) Projects contest.

We are thankful for everyone who got some time to cast their vote. Actually, it did make a difference! On the morning of the 26th of May 2015, we received the exciting news CTA's Agriculture, Rural Development and Youth in the Information Society (ARDYIS)  had won the e-agriculture category of the  WSIS contest. The prize was presented in Geneva, Switzerland and this forum is the largest international event in the ICT for Development calendar.

We feel greatly honored to be part of the revolutionary journey that CTA is walking in revolutionizing agriculture and rural development in marginalized communities through youth in the information society. To celebrate their success we though of sharing this infographic on how much impact the ARDYIS project has generated in recent times.

Enjoy looking at it and we hope it will change the way you view the future of Africa, Caribbean and Pacific countries.

Infographic from the CTA website 


Sunday, 12 April 2015

Hey, Vote for our grandparents, the CTA ARDYIS project

Dear readers,

If you enjoy this blog, here is an opportunity to give back to the people who have helped it to become what it is.

CTA’s ARDYIS (Agriculture, Rural Development and Youth in the Information Society) programme has been nominated for the WSIS Project Prizes in the category 13: e-agriculture.  This is the organization that has trained many young people across Africa, the Caribbean and the Pacific in areas such as Web 2.0 and Social Media for Development. I am a product of their training, that is why I call them our grandparents. 

WSIS Project Prizes recognise the efforts of stakeholders for their added value to society and commitment towards achieving the World Summit on the Information Society (WSIS) goals. The winners will be selected from the three (3) most voted projects and announced at the WSIS Forum 2015, to be held in May 2015 in Switzerland.

Through initiatives such as blog competitions (YoBloCo Awards), the support of ICT for agriculture entrepreneurship by youth (AgriHack Talent), Web 2.0 training targeted to youth, Social Reporting at various events, and the constant interactions with youth via its mailing lists since 2010, the ARDYIS Programme has supported youth in agriculture and strengthened youth capacities and opportunities in ICT for agriculture (e-Agriculture) in African, Caribbean and Pacific countries.

Vote right now!
The voting process for the WSIS Project Prizes has started and it’s time to support and vote for ARDYIS!
Here are the steps you need to follow to vote:
1.       Go to: http://bit.ly/wsis-link - Log in if you/your organisation are already registered on the WSIS platform, or register by clicking on the link « click here » on that page (in blue)
 If you are not registered, provide your contact details on the page. A confirmation message will be sent to you automatically by a WSIS account – check your email (if needed your spam box) and click on the confirmation link ; go back to WSIS Prize homepage or to http://bit.ly/wsis-link and log in 
2.       Once you have logged in, you will be required to provide your organisation's name and country (the name of your organisation can be your current employer or any other organisation you are affiliated to, that has an interest in this topic).
3.       Read the voting instructions if needed, or go directly to the « Vote » tab (see image below)
 
4.       You can now start voting. Under the Voting tab, you will find a list of projects in 18 Categories. ARDYIS is nominated in the category e-agriculture (category 13) ; but you need to vote for one project in each category, from 1 to 18. If not, your vote for ARDYIS will not be counted. Under Category 13, look for the ARDYIS programme, and click on « Vote for this project ...» (see below)
 
5.       You will be asked to confirm your vote for each project in the 18 categories.
6.       After voting for a project in all categories, a thank you message will appear on your screen. Check also your mailbox (if needed wait for some minutes), you should receive a message from WSIS indicating that you have voted. And you are finally done!
This information is also available on the ARDYIS website: http://bit.ly/ardyis-wsis
Please note that the voting process will take you around 10 minutes. If you are having any issues to vote, please write to us at ardyis-project@cta.int
Kindly spread the word to the youth in your organisation and members of your networks, to vote for us to support youth in agriculture and ICT, and better put these issues in the spotlight.

Thursday, 9 April 2015

Zimbabwe’s limited fiscal space is constraining agricultural growth and development

Photo Credit: M. Granados - CIMMYT

Defining fiscal space

Fiscal space is defined by the balance between government revenue (i.e. tax), denoted by T and government expenditure, denoted by G, through time. For instance, if G < T, then there is a fiscal surplus, but if G > T, then there is a fiscal deficit. A sustained or perpetual deficit through time results in build-up of annual deficits, leading to an unsustainable high debt. With a high level of debt, the government cannot borrow on the international market, and its ability to finance future deficits, i.e. the fiscal space is limited. 

Zimbabwe currently endures very limited fiscal space since debt distress is undermining the capacity of the country to service its debt obligations. Accumulation of external payment arrears since 2000 (including interest charges) has resulted in public and publicly guaranteed debt reaching 51% of GDP and was projected to reach US$7.2 billion by December 2014 (Chinamasa, 2014).

Fiscal space is constraining agricultural growth

The country’s credit worthiness in the international community has been eroded and efforts are currently being made to reengage with the international community. While there may seem to be sufficient ground to argue that limited fiscal space has constrained agricultural growth; constraints to agriculture sector growth may emanate from a variety of angles.

However, it is to a large extent, that Zimbabwe’s limited fiscal space has affected agricultural growth and rural development. Zimbabwe has not been able to access patient capital from international financial institutions (IFIs) as well as global agricultural investment funds.

International and regional lines of credit in Zimbabwe are few and are subject to a high risk premium, reflecting the perception of Zimbabwe as high risk due to the existing external debt payment arrears and debt overhang, said Agribank Chief Executive Officer Mr S. Malaba at an Agribusiness Conference late last year.

Failure to unlock patient money

With limited fiscal space reflected by an unfavorable credit worthiness, Zimbabwe has limited opportunities to unlock “patient” capital from IFIs. The IMF had closed its Zimbabwe office for over a decade. However, possibly in response to ongoing efforts to reengage with the international community, the IMF office in Zimbabwe has since been re-opened. 

IFIs are a source of patient money which is critical for agricultural growth and rural development given the capital intensive nature of agriculture as a business, and the high risk of smallholder agriculture.

Failure to unlock innovative agriculture investment

In the recent past, agriculture investment funds have grown in Africa as a region. In 2010, 31 agribusiness investment funds were targeted at Africa, with capitalization ranging from $8 million to $2.7 billion (Miller, et al., 2010). These have different asset classes (such as commodities) and financial instruments (for example bonds, listed securities and derivatives). These include both public/donor (with philanthropic objectives) funds as well as private investment funds. 

Due to the risk associated with Zimbabwe’s limited fiscal space, private investor funds, for instance debt funds, which are the type of funds that may provide loan capital directly to agriculture may shy away from Zimbabwe. 

Credit guarantee schemes are innovative tools that are being utilized to unlock financing of agriculture especially through value chain approaches. Some credit guarantee schemes may involve financiers who will require the government to be guarantor for external agricultural financing. Limited fiscal space compromises government’s ability to guarantee credit e.g. for financing smallholder agriculture.

Debt instruments such as treasury bonds are another form of instruments that the government can use to finance agro-industry and agricultural value chains. In 2014, treasury bonds were issued by the government to input suppliers for the debt owed for inputs supplied through the RBZ quasi-fiscal activities. Limited fiscal space may compromise the government’s ability to meet the commitments to the bonds. This constraints agricultural growth. 

In countries such as Nigeria and some Asian and Latin America countries that have benefitted from developed countries’ debt relief, FDI in agriculture/agribusiness is reasonably high. In Latin America and Asia, it is as high as 78% of FDI. Though in Nigeria, the value of agriculture related FDI is proportionately low compared to total FDI, falling within single digit percentages, the country’s agricultural sector benefits from investment funds such as Fund for Agricultural Finance in Nigeria, FAFIN (Ogwumike, 2013; Nigeria Sovereign Investment Authority, 2014). 

Agricultural investment funds and other innovative financing instruments can play a critical role in agricultural growth and rural development in Zimbabwe, but their success requires “space” for both social and market lending facilities.

Failure to absorb external hazards or shocks 

Most rural farmers in Zimbabwe still depend on rain-fed agriculture. However, rainfall patterns are increasingly becoming erratic and less predictable. This makes smallholder agriculture extremely risky and in need of the absorptive capacity of government to ensure resilience in the event of external hazards. The majority of livelihoods depend on agriculture and the growth of the smallholder agriculture and rural livelihoods improvements can be considered key in achieving economic growth and development. Limited fiscal space however limits ability of the government to absorb the effects of shock and in turn propel agricultural growth and rural development.

Limited investments in key drivers of agricultural growth such as research and development

Research and Development (R&D) can be considered one of the key drivers of agricultural growth and rural development. The United Nations recommended a minimum threshold of spending 1% of GDP on R&D. Given a scenario of limited fiscal space government has to negotiate this with other investment priorities. In the case of some “inescapable” budget requirements which have immediate/short term implications, resources are often channeled to other priorities e.g. the “next season’s” input support programme. Lower fiscal space and sustained budget deficits may result in starving of strategic investment areas such as R&D and extension.

Other factors constraining agricultural growth and development in Zimbabwe

While there may seem to be sufficient reason to argue that limited fiscal space constrains agricultural growth and rural development, it may seem also important to consider some of the forces that may be independent of limited fiscal space but also constrain agricultural growth and rural development. 

General macroeconomic policy gaps, for instance the lack of clarity on the indigenization policy and lack of resolution on land tenure instruments such as the 99 year lease also constrain agricultural growth. For instance, there is still debate whether ownership structures are the only means of complying with indigenization regulations. This form of uncertainty shies away even domestic investment which may then find better havens elsewhere. 

Additionally the lack of resolution on the bankability and transferability of the 99 Year Leases renders complications to the functioning of domestic land markets, suffocating domestic investment and hampering productivity. Surges in the local costs (financial and time-related costs) of doing business through high transaction costs hinder growth of agricultural businesses. For instance cumbersome processes related with acquisition of licenses and registration by traders also stifles local agribusiness.

Saturday, 15 November 2014

The "Open" Secret of African Agricultural Transformation

Over the past three months, I have been in my first semester of Masters training in agricultural and applied economics, and I am yet to optimize the functions of maximizing my blogging passion and maximizing my grades all subject to a time constraint. 

After reading the transcript of a classic interview between the McKinsey Quarterly and Nobel Prize winning economist Robert Solow I thought I should come back to the blogging after a long period of silence and share what I dubbed the "open secret" of African agricultural transformation. You will realize by the end of this blog why I have called it an open secret. But first, let us start with a question:  
What really determines the differences in productivity between nations, sectors and firms?
Just as background information, Prof Robert Solow is internationally recognized for his contributions to the theory of economic growth and development. In the 1990s he worked with the McKinsey Global Institute  in some sector level studies across the globe. From the interview transcript, his view in response to the question I have just paraphrased above was that, the difference in productivity (across countries, sectors and consequentially firms) is not technology, and neither is it capital accumulation; rather, it is management, organizational behavior, how decisions are made, how tasks are allocated and I would add, how risk is managed.
 
Prof Robert Solow remarks in the interview:
"...the idea that everybody is everywhere and always maximizing profits (turns out) to be not quite right..." (emphasis mine)
Part 1 of the "open" secret: "To assume that all economic agents are naturally maximizing profit, or acting rationally is incorrect... the open secret is that 'competition' is actually the factor that spurs economic agents to do more... we have to acknowledge that competition is healthy if we wish to transform African agriculture." 

While this sounds a little like going hard on our so-called "poor" farmers and entrepreneurs whom we at times view a little too much as victims, it could be part of the secret behind a brighter, robust and sustainable growth path for our beautiful continent. But perhaps, the question in context could be, just how does competition result in transformation?  Prof Robert Solow also explains in the interview how "trailers" in an industry, nation or region actually move up to realize that inert potential and become trendsetters:
 
Part 2 of the "open" secret: The exposure to the competition of other players who are applying right practices (i.e. using the right tactics in the game), spurs "trailers" to do more and thus into higher levels of productivity.
 
Prof Robert Solow remarks again in the interview: 
"...international trade serves a purpose beyond exploiting comparative advantage. It exposes high-level managers in various countries to a little fright. And fright turns out to be an important motivation..."
Some might wonder, can African farmers stand global competition? Well, yes, African farmers can be very competitive. I have shared a few insights in this post that might be of interest in this subject. You can also learn a lot from this report. African  small farms have the potential to offer great value, for instance in supplying niche markets for healthy and more nutritious foods produced under intensive small scale management. Local agribusiness firms such fertilizer and input suppliers also benefit from healthy competition among themselves. Exposure to the practices of other firms within and beyond the country or region will spur local firms to be more efficient and produce better quality products and services.
 
Part 3 of the "open" secret: The primacy of the agriculture sector; a "productivity tipping point" 

On this point, I believe there is a lot we can learn from Jeff Bezos, the founder and CEO of Amazon one of the world's largest e-commerce companies. But before we get into the details, let me explain the last nugget from the classical interview between McKinsey Quarterly with Robert Solow in relation to our discussion. The McKinsey Global Institute studies in which Prof Solow was academic adviser, also found that wholesaling and retailing were the strongest accelerators or decelerators of productivity growth between nations and were at the time of the studies, low productivity growth sectors. However, entrepreneurs like Jeff Bezos managed to see the opportunity in these low productivity sectors and struck gold; not only for themselves but for the American nation and the world at large today. Wholesaling and retailing could have been "slow"sectors in most developed countries but also these sectors employed large proportions of the population, and this was the growth dividend, summed up by Prof Robert Solow in this way: 
"...a little improvement in the productivity of these sectors would make a large contribution to national productivity..."
Conclusion: Enhancing agricultural productivity; taking Africa beyond the tipping point

It is no longer a "hidden" secret today that the agriculture sector in Africa faces the challenge of low productivity, but in principle still employs the majority of people. When most people hear the word agriculture today, they think of either the few large scale commercial farms and estates. These have great potential as well but that is not where all the money is! Agriculture employs 65% of Africa's labor force, and where is that mostly? In small and medium scale farms whether in the rural areas or around growing rural towns and bigger cities. I would like to rephrase Prof Robert Solow's statement and say: a little improvement in the productivity of African smallholder farmers would make a large contribution to national and continental productivity, and by the way, you could make millions like Jeff Bezos did in transforming retailing in America and now in the world. Have you ever wondered what Africa's richest man is doing? Among three things, he derives his wealth from sugar and flour business, the third is cement.

Now is the time for Africa to go beyond the tipping point. Development and transformation is about growth in total factor productivity and the driver of total factor productivity is not capital accumulation, labor or natural resources. The distinction in total factor productivity between countries or firms is the spur to do more; the motivation to put the best tactics to use, i.e. leadership, management, organization, managing talent, managing risks. And the spur to do more comes from exposure to competition.

Now is the time for Africa to be bold enough to foster healthy competition, locally and externally, it is an "open" secret. It is time for African entrepreneurs and governments to see how agriculture will catapult the continent's economy from dormant potential beyond the tipping point. There is opportunity for nations and entrepreneurs in transforming African agriculture. Committing to the CAADP and creating conducive environments for competitive agribusiness to grow is key. 
 
 

Wednesday, 22 October 2014

You want to know more about the role of agricultural innovation in creating food security in Africa?

"Agricultural innovation lies at the heart of striking the opportunity lying between agriculture’s demand-side incentives and supply-side constraints. Innovation is a subject of great importance because it stimulates sustainable growth in a highly competitive market"

A snapshot of the Forum for Agriculture Research in Africa (FARA) website

Hi guys!

The Forum for Agriculture Research in Africa, FARA just launched an essay writing competition for young agriculture academics. I have submitted my essay and our essays are in the public evaluation stage where we need to mobilize many votes through Facebook. If you are on Facebook, please help me win. My essay gives a clear picture why "innovation" should Africa's priority in a dynamically changing world, marred by its challenges but full of its unique opportunities. Regardless of being food insecure and suffering from supply-side constraints, Africa has demand-side incentives for agriculture. It however takes the eyes and guts of innovators to realize the gold lying between these two "rocks".

To read and vote for my essay click on this link:
It will take you to my essay on the FARA facebook page.
At the end of my essay u will find a box to vote, just click in that box and cast your vote!

The main link to the FARA facebook page is right here:
You can also search for my essay by going through the essays on the page, but if we are friends on Facebook, just click the button that says "friends" and my essay will appear.

Remember you have one vote to use "everyday" to vote for your favorite essay! 
Also remember you can share this with your friends and encourage them to vote as well.

Many thanks!

Thursday, 2 October 2014

What distinguishes a good life from a sustainable and bright future

We have entered now the era of Sustainable Development, where the focus is not only on ensuring that people from the most marginalized parts of the world have a good life, but that they also have aa sustainable and bright future.



To help understand how a sustainable and bright future future is different from a merely good life, I thought I should remind our "valucentric" readers about the relationship between economic growth and sustainable economic development.

Defining economic development

The term development means a change over time, typically involving growth or expansion. According to (Norton, et al., 2006), development is a process with many economic and social dimensions. It is a dynamic process including not only changes in the structure and level of economic activity, but also increased opportunities for individual choice and for improved self-esteem. In the first Human Development Report, UNDP defined development as expanding people’s choices. 

Economic development therefore refers to a process of economic transformation; involving more efficient resource utilization as well as expansion of productive capacity accompanied by a sustainable and equitable distribution of the gains from such growth. 

Several theories of development such as the Mercantilists, the Classicalists, Stage of Growth proponents and Capital Accumulation theorists converge to the belief that: economic development is a transition from traditional society to a modern commercial society with improvements in people’s standards of living. 

Economic development is thus a multi-faceted phenomenon involving both growth and productivity gains as well as social and distributional efficiencies. 

Contrasting economic development with economic growth


PHOTO CREDIT: Mabel Munyuki Hungwe (PhD)
The term economic development is often used interchangeably with the term economic growth. The two terms, however related, have different connotations. Economic development requires economic growth. Economic growth is often measured by metrics such as per capita GDP growth rates. However, measuring economic development is a combinations of both measures of growth and measures of the actual distribution of wealth. Indices like the Gini inequality coefficient, or the gender disparity index, are often combined in composite measures of economic development. 

“Economic growth is a necessary but not sufficient condition for economic development.”

The difference between economic growth and development can be illustrated by the recent findings that the early 2000s have been Africa’s decade of unprecedented economic growth. For instance, six of the ten fastest growing economies globally in the early 2000s were in Africa; including Angola, Niger, Ethiopia, Chad, Mozambique, and Rwanda who registered growth of over 7%. However, this unprecedented growth has not delivered the jobs and poverty reduction that Africa has been seeking. 

Africa is off target on achieving MDG 1 of eradicating extreme poverty and hunger. This may be seen to resemble “economic growth” without “economic development”. 

Economic development focuses on concepts which include, though not limited to:

  1. productive capacity of resources and productivity of both self-employment and wage-employment 
  2. equity of income and asset distribution 
  3. social protection

To a sustainable and climate smart future post-2015!