Business can help rural Africa grow

By Stanley Crossick

Date: 08/09/05

Africa will figure prominently on the agenda of next week's United Nations Millennium Summit in New York.

A further commitment urgently to meet the special needs of Africa is to be expected. This will no doubt be accompanied by confirmation of financial and other support.

The G8 summit at Gleneagles in July made a similar commitment, including substantial financial pledges. But ringing summit endorsements are not enough: effective implementation is required.

An active participation by the private sector (both international and African) is essential if the G8 and UN objectives are to be achieved. The need for "maximising the contribution of local and multinational companies to peace and stability" was recognised at Gleneagles.

The leaders saw "private enterprise as a prime engine of growth and development". "Partnership between the public and private sectors is crucial," they added.

It is to be hoped that the UN summit will also endorse the importance of industry participation.

Given the necessary funding, the challenge is how to ensure this money is spent effectively. Direct aid is essential to cope with disasters, such as Niger, but is insufficient in itself as a long-term solution. According to an old Chinese proverb: "If you want to help a starving man you don't give him a fish, you give him a fishing rod." Despite 20 years of massive aid programmes, Africa is in a worse situation today. In sub-Saharan Africa, fewer than one in ten people have access to electricity and fewer than four in ten have access to water. Africa requires infrastructures: water, health, education, power, transport and telecommunications.

A huge Western human effort is essential to help Africans to help themselves. This effort must combine the strengths of international organisations, governments, industry and non-governmental organisations (NGOs).

International organisations and governments ought to play the lead roles, but international companies have considerable experience in managing logistics in difficult parts of the world and NGOs help ensure local implementation.

The obvious vehicle in which to bring these players together effectively is the public-private partnership (PPP). PPPs are voluntary agreements between public agencies and private businesses, and sometimes others, to carry out development projects. Although in some countries governments prefer to run things alone and not in such partnerships with the private sector, this concept has recently been recommended by BIAC, the Business and Industry Advisory Committee to the Organisation for Economic Co-operation and Development (OECD), which represents industrial and employers' organisations from the OECD countries.

Overall co-operation with the New Partnership for Africa's Development (NEPAD) needs strengthening. NEPAD brings together most African countries in order to develop an integrated socio-economic development framework. Its support for sustainable agriculture and, in particular, the restructuring, diversification and strengthening of the African commodity sectors, is critical.

The fight against poverty in Africa should focus more on the continent's agriculture, which is losing out to urban and industrial projects. The significance of the agricultural economy sometimes gets lost. The share of official development aid for agriculture and rural development worldwide fell from 30% in 1980 to about 8% in 2003, according to the OECD. In Africa in particular that decline has been even more severe.

Agriculture is crucial both for generating income and preventing excessive migration from the countryside to the city, which is just one of the dangers of trying to push African economies into industrialisation when a large part of the population lives in rural communities. According to the G8 statement, "sustainable agriculture...is the most important economic sector for most Africans". But development funding for agriculture and the rural sectors has reached an all time low. Hopes of aid investments that lead to rapid industrialisation, along with support for cities, still tend to dominate donor strategies.

I have been advising the Sustainable Tree Crops Programme (STCP), which began in 2000, and has shown the potential of public/private partnerships, combining the strengths of industry and governments. STCP, which is managed by the International Institute of Tropical Agriculture (www.treecrops.org) includes several Western and African governments, the global chocolate industry and cocoa trade, NGOs and farmer organisations. NEPAD seeks to promote successful examples such as the STCP and particularly welcomes the way the STCP helps cocoa farmers to diversify.

Most cocoa is grown on small family farms. There are more than one million cocoa farms in West Africa with at least 10 million people living on them. Some 45,000 farm households are already involved in promoting better trees, training, working with farmer organisations, and being educated about social issues such as child labour and HIV/AIDS. Both overall income and cocoa prices have substantially increased.

Although the STCP focuses presently on cocoa, work is being done to extend it to other tree crops. A future project will also examine the extent to which this project can be used as a model for non-tree crops.

• Stanley Crossick is assisting the STCP but all the views expressed in this article are his own. s.crossick@theepc.be

Preview of the United Nations Millennium Summit in New York, 14-16 September 2005. Author suggests that financial commitments to developing countries, which were expected for the Summit, had to be complemented by an active participation by the private sector (both international and African) if objectives set by the UN and the G8 were to be achieved.

• Primary Source

UN Millenium Project: Homepage http://www.unmillenniumproject.org/

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