Concept Note

Staple Crops Processing Zones (SCPZs) and African Agricultural Transformation

Knowledge harnessing seminar on the challenges and opportunities of the development and implementation of

SCPZs in African countries

(Tunis, 12-14 February 2018)

Introduction

1. In the pursuit of its mandate for rapid eco-nomic transformation of its Regional Member Coun-tries (RMCs), the African Development Bank financeknowledge products in the form of studies and sur-vey whose outcomes are geared towards providingevidence-based policy direction, which in turndrives the implementation investment operationsthat the Bank supports. Towards this end, the Bankis organizing a seminar on the challenges, goodpractices and lessons learned from the develop-ment and implementation of the Staple Crops Pro-cessing Zones (SCPZs) drawing largely on theBank-financed knowledge work, which sampledSCPZs in 10 Regional Member Countries (RMCs).This note provides details pertaining to the focus,the target audience and the program.

General context and focus of the seminar

2. With the approval of its Feed Africa Strategy,the Bank has saddled itself with the onerous task oftransforming the African agriculture. The transfor-mation of the African agriculture sector is long over-due and it is the only way to unlock Africa'senormous potential. The agricultural sector in Africaperfectly illustrates the importance of public policiesin macroeconomic modelling and sustainable deve-lopment. It unquestionably represents the sectorthat employs the most Africans, what Arthur Lewisreferred to “disguised unemployment” (Lewis, 1954).Agriculture in Africa provides 61% of jobs but ac-counts for only 25% of GDP, a gap explained mainlyby lack of modernization of the sector (little or nomechanization of the sector, poor utilization of in-puts, lack of value addition etc.) which culminatesinto low productivity, consequently leading to impo-verishment of the people that is avoidable. Forexample, despite the fact that over 65% of theworld's arable land is found in Africa, the continentannually spends nearly USD 35 billion in food im-ports to counter food insecurity.

3. This situation illustrates a context of a plan-ned failure when one considers that the low level ofefforts made for the development of the sectorconstitutes a missed opportunity for meeting the va-rious development challenges targeted in the UN’sSustainable Development Goals (SDGs) and theBank’s High-5s, to name just a few. With the youn-gest population in the world and an unemploy-ment rate exceeding 10%, Africa has no choicebut to undertake the necessary transformationof its agricultural base, to reverse the currenteconomic trends of the continent. This meansthat the agricultural sector must become thefirst investment area in the continent, hencethe need for clear policies to attract invest-ment from both the public and private sec-tors, including foreign investors.

4. The Bank's Sector Strategy—Fee-ding Africa—has largely demonstratedthe added value of investing on all frontsin agriculture. It estimates the need forfunding at nearly US $ 400 billion for thenext 10 years, and expects that a sus-tained investment of US $ 32 billion toUS $ 40 billion per year would generatean estimated US $ 85 billion in revenuefrom 2025, an estimate that would conti-

nue to grow if one considers the incremental effectof knowledge gains. In practice, investment rates fallwell below these estimates (about USD 7 billion peryear instead of 25 to 33), making resource mobiliza-tion crucial for successful transformation.

5. One of the key areas targeted by the Bank'sstrategy is the development of agribusiness, whichrevitalization would provide answers to the manydevelopment challenges the continent is facing,among which are issues of job creation, nutrition,rural development, market access and competitive-ness, etc. Unfortunately, agribusiness is still at anembryonic stage in Africa, particularly in sub-Saha-ran countries, which consequently suffer huge post-harvest losses of up to an average of 35 to 50percent of the total achievable production for peri-shable agricultural commodities such as fruits andvegetables, and between 15 and 25% for cereals.

6. The economic cost Africa pays due to themissing links in agricultural value chains such as theprocessing of agricultural products is challenging,as illustrated by Côte d'Ivoire, the world's leadingcocoa producer (accounting for 40% of world cocoabean production), hardly produces chocolate. At thesame time, the French giant Cémoi set up a plant in2015 to produce between 2,000 and 3,000 tons ofchocolate per year. In fact, only 33% of Côted'Ivoire’s cocoa production undergoes a first trans-formation (crushing of beans) in the country. In thesame vein, Tunisia produces 180,000 tons of oliveoil annually, of which less than 10% is packaged inTunisia, the rest being exported in bulk. Cameroonproduces about 2,000,000 tons of plantain, whichis almost totally sold unprocessed or lost afterharvest (40%). The Bank's agricultural transfor-mation goals target these important margins inthe agricultural value chains, as well as themultiple job creation opportunities resultingfrom a dynamic agribusiness sector.

7. Among the agribusiness develop-ment initiatives, the Bank is promoting thedevelopment and implementation ofSCPZs as a promising approach to inclu-sive and participatory financing, inclu-ding marketing of agricultural productsin the RMCs. SCPZs are Feed AfricaFlagship initiatives which are “agro-based spatial development initiatives,designed to concentrate agro-proces-sing activities within areas of high agri-cultural potential to boost productivityand integrate production, processing and

marketing of selected commodities consisting ofgeographical areas with a high concentration ofcompanies involved in the range of activities of pro-duction, processing and marketing of agriculturalproducts”. Experienced for decades elsewhere inthe world including Africa (more particularly NorthAfrica where some countries such as Tunisia andMorocco are well advanced), this approach is nowgenerating renewed interest in the context of the im-plementation of the Feed Africa strategy where theneed for financing is enormous. The seminar is plan-ned in this context to be an opportunity for know-ledge dissemination as well as a platform forexchange with and between RMCs on the chal-lenges and necessary conditions for successfultransformation proceeding from agribusiness revi-talization.

Rationale for the seminar

8. SCPZs are essential to the Bank's High 5spriorities, in particular the objectives of the FeedAfrica strategy and those pertaining to improving thequality of life for the people of Africa. It isalso because several RMCs withdifferent levels of agricul-tural development havesought the Bank's sup-port to develop theseagro- industr ia lparks with

a view to transforming the sector. The Bank com-missioned a study covering 10 (5 Francophone and5 Anglophone) RMCs1 to (i) identify challenges,risks, success and failure factors and the extent towhich SCPZs contribute to the development objec-tives; and (ii) how to harness the knowledge gene-rated from the study covering the 10 countries. Thedissemination of the results of this study is thus cru-cial in determining the priority actions that the Bankand the individual RMCs will undertake to ensurethe success of future SCPZs, should they agree totake that path. A brief summary of the findings ofthe study is appended in annex 1 of this note.

9. The objectives and expected results of theseminar are as presented below.

Objectives and results of the seminar

10. The seminar aims to (i) create synergy bet-ween the involved RMCs to stimulate exchanges ofviews and establish a dynamic of continuous sha-

ring of experience; (ii) disseminate the re-sults of the study conducted by

AHFR and discuss thechallenges and pitfallsidentified; and (iii) ex-plore with the partici-

pants the most

promising financing and management opportunitiesfor future SCPZs, including elements for future ac-tion plans.

11. In terms of results, it is expected that the se-minar will contribute to (i) the development of natio-nal agro industrial master plans; (ii) South-Southcooperation agreements for knowledge harnessingthrough export and adaptation of good practices;(iii) innovative and context-specific public-privatepartnerships (PPPs); and, eventually (iv) the adventof agro-enterprises leading to the creation of paidjobs and to the emergence of more inclusive andstronger economies in the RMCs.

Organization and targetaudience

12. The seminar will bring together about 100participants from the sampled (10) countries invol-ved in the study on African SCPZs, as well as othercountries which showed particular interest in the ap-proach by either signifying their intentions to workwith the Bank in developing their SCPZs, or havepotentials in the development of such approach fortheir agro industrialization. These include BurkinaFaso, Cameroon, Cote d’Ivoire, Guinea, Mali, Mo-zambique, Tanzania, and Togo, hence a total of 17RMCs. In each country the seminar will target twoSenior Officials in position to influence the strategicchoices and actions of their respective Ministries(mainly Agriculture and Industry), so that the eventachieves its expected impact.

13 Furthermore the Bank intends not only tohave SCPZs as flagship but also a unique brandname for which the Institution is expected to takethe lead in, while fully engaging other partners. The-refore the seminar will enlist participation of theBank’s Country Managers and relevant sector Ex-perts of the Bank from various departments. Part-ners such as UNIDO, FAO, etc. will also be invited.

14. A Facilitator will be recruited on site (in Tunis)to support the planning of the seminar and organizethe field visits. Interpretation services (English-French) will also be procured, given that the partici-pants come from Anglophone and Francophonecountries as described in the list of invited countries.

15. The seminar will take place from 12-14 February2018 and will be structured in three main parts de-dicated to (i) formal technical sessions which includethe presentation of the conclusions of the studycommissioned by the Bank, the Conceptual frame-work for SCPZs; (ii) plenary sessions around struc-tured thematic areas of SCPZs including: a) Policyand institutional arrangements; b) the Smart Infra-structure for Rural Development, Value Chain Deve-lopment, Private Sector Engagement followed bydiscussions around the salient points raised; and (iii)a field visit to the Technopole of Bizerte, Tunisia. TheBank will hold Tailor-made Clinic sessions for indi-vidual participating countries on February 14, i.e.,after the formal closure of the seminar.

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