African Investors Call for Greater Collaboration to Accelerate Agricultural Transformation

Oliver Cann, Director, Public Engagement, Tel.: +41 79 799 3405; Email: Oliver.Cann@weforum.org

• Sixty-six per cent of surveyed private-sector members of the Grow Africa Partnership see an urgent need for improvement in cross-sector collaboration to successfully execute investment commitments
• Poor infrastructure and lack of access to appropriate finance are largest impediments to investment
• Investors are benefitting from national priority initiatives that strengthen the agriculture sector
• For more information on the World Economic Forum on Africa: http://wef.ch/af15

Cape Town, South Africa, 4 June 2015 – During the Grow Africa Investment Forum ahead of the World Economic Forum on Africa, private-sector investors in African agriculture reported improvements in the enabling environment, but progress is too slow to unlock the sector’s potential to drive economic growth. The rate of return on agricultural investment is significantly influenced by the mix of government policy, access to finance, ease of transportation and telecommunications infrastructure, collectively termed the “enabling environment”.

As part of the annual stock-taking of progress against investment commitments, 81 companies in 12 countries from the Grow Africa Partnership rated the importance and effectiveness of 14 aspects of the enabling environment. The results point to an urgent need for strengthening cross-sector collaboration, infrastructure and access to finance to ensure the conversion of investment potential to investment on the ground.

• Only 31% of respondents feel that their country’s enabling environment is conducive to their investment and 58% said it is “very important” that the enabling environment improves for them to successfully implement their investment commitment.
• Dissatisfaction with the quality of physical infrastructure was higher than for any other aspect of the enabling environment, with 54% of respondents saying their needs are not being met.
• The most urgent call for improvement is in access to finance. Only 25% of the companies surveyed said they could access appropriate finance for their investment, and more respondents (69%) cited the urgent need for improvement in this area over any other aspect of the enabling environment. This is also the area in which least improvement was reported. Only 14% of respondents said access to finance has improved over the last 12 months.
• Only 36% of companies feel their investment is supported by effective national policies for trade, agriculture and investment, with only 16% of respondents reporting an improvement in the situation over 2013.

The survey revealed an urgent need for cross-sector collaboration. Sixty-six per cent of respondents called for improvements in this area. Yet private-sector companies also reported the most progress in areas of the enabling environment that call for multistakeholder partnerships:

• Forty-six per cent reported an improvement in the extent to which their investment is able to benefit from their country’s priority initiatives to strengthen the agricultural sector
• Forty-six per cent percent reported improvements in their ability to operate within a well-structured and stable value chain
• Forty-one per cent percent reported improvement in their ability to find the commercial partners they need to advance their investment
• Forty per cent reported improvement in access to skilled labour

“Both the public and private sectors have made strides in identifying effective models of engaging that encourage investment,” said Arne Cartridge, Chief Executive Officer of Grow Africa. “African governments are developing skills, capacity and organizational structures to develop investment plans with the private sector in support of the national agricultural agenda. Public and private sector organizations have worked with donors to generate considerable innovation in financial and risk mitigation instruments. Yet progress is too incremental to enable real transformation. Much of this innovation is not reaching Africa’s small to medium-sized agribusinesses and smallholder farmers, without whom the long-term economic growth of the sector is not tenable,” he said.

More than 1,250 participants are taking part in the 25th World Economic Forum on Africa in Cape Town, South Africa from 3 to 5 June 2015. The theme of the meeting is “Then and Now: Reimagining Africa’s Future”.

The Co-Chairs of the World Economic on Africa are: Antony Jenkins, Group Chief Executive, Barclays, United Kingdom; Phumzile Mlambo-Ngcuka, Undersecretary-General and Executive Director, United Nations Entity for Gender Equality and the Empowerment of Women (UN WOMEN), New York; Patrice Motsepe, Founder and Executive Chairman, African Rainbow Minerals, South Africa; Paul Polman, Chief Executive Officer, Unilever, United Kingdom; and Sir Michael Rake, Chairman, BT Group, United Kingdom.

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