AFRICAN DEVELOPMENT BANK GROUP

By

Dr. Chiji OJUKWUManager

Agriculture and Agro-Industry Department

AFRICAN DEVELOPMENT BANK GROUP

Agriculture Sector Strategy

2010 - 2014 (Major Highlights)

AFRICAN DEVELOPMENT BANK

Context Global Financial Crises

– 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

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AFRICAN DEVELOPMENT BANK

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

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AFRICAN DEVELOPMENT BANK

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

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Bank Group Approvals, 2008: Distribution by Sector

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The 2008 figures include private sector investments which is skewed against agriculture

Trend of Bank Group Agricultural Portfolio Performance, 2006 2009

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Improving trends due to: more supervision, delegation of authority to Field Offices, and better staff skill mix

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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

Lessons and Best Practices

Guiding Principles for Implementation of the AgSS

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AgSS – Bank Focus

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Institution & CapacityBuilding

Ministry of AgricultureMonitoring and EvaluationProject PreparationActivitiesSoftware InterventionsPolicy Formulation andprogramming, Researchand Development

Renewable NaturalResources Management

Renewable NaturalResources Management(include Forestry)Climate Change(mitigation andadaptation)

Cross Cutting

GenderEnvironmentClimate ChangeKnowledge Generation

Agricultural Infrastructure

Rural and CommunityRoadsMarket / StorageInfrastructure andAgro-ProcessingAgriculture Water andWater StorageOther Infrastructure(support livestock,fisheries, etc

Sustainable FoodSecurity through

IncreasedAgriculturalProductivity

AgSS Pillars and Areas of Intervention – Pillars 1 & 2 of the four

CAADP Pillars

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AgSS Value Chain – Objectives, Purpose and Strategic Goal

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Indicative Pipeline of Projects / Programs for Financing, 2010 - 14

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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

OPEC Funds, IsDB, BOAD, Kuwait Funds, Saudi Funds, World Bank

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

OPEC Funds, IsDB, BOAD, Kuwait Funds, Saudi Funds, World Bank

Market Access Market / Storage Infrastructure and Agro-Processing

IsDB OPEC Funds, IsDB, BOAD, Kuwait Funds, Saudi Funds, World Bank

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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

Special Initiative

IFAD

Gender Mainstreaming/ HIV Direct Role WB, IFAD, IsDB

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Key Agricultural Sector Performance Indicators by 2014

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Outputs Outcomes

1. 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.

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Risks and Mitigation Measures

Risk 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.

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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

Implementation Arrangements

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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

Partnerships

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Thank you