NEPAD-Spanish Fund : progress with interviews

Interviews for the NEPAD/Spanish Women’s Fund are in the process of being completed. The outcome will be announced after the final interviews which will be held 4 April 2008.

The date for the next Steering Committee meeting of the NEPAD /Spanish Women’s Fund will be announced as soon as consultations with all Steering Committee members have been completed.

The NEPAD Secretariat will keep all informed on the progress being made. Source : NEPAD, march 28, 2008

NEPAD playing critical role in mobilising finance to speed up Africa’s agriculture programme

The 2003 African Union Summit in Maputo, Mozambique, endorsed the Comprehensive Africa Agriculture Development Programme (CAADP) as a framework for the development of the agriculture sector in Africa and contributing to the reduction of food insecurity and poverty. Since then many consultations have been held with key stakeholders to identify priority investments and early actions at national, regional and continental levels.

The major challenge facing CAADP is to assist the implementing partners to mobilise adequate resources to initiate and/or upscale investment in areas where there is agreement.

It is recognised that African resources — annual national budget allocations (50%) and private sector investment (20%) — will at most cover approximately 70 percent of what is needed to achieve at least 6 percent annual growth in the sector.

The NEPAD Secretariat is playing a critical role in facilitating the unlocking of the resources to accelerate implementation of CAADP priority investments and early actions.

Encouraging African countries to increase national budget allocation to agriculture development In line with the NEPAD principle of anchoring the development of Africa on its own resources and the resourcefulness of its people, the Heads of State and Government committed their countries to the allocation of at least 10% of their national budgets to agriculture development.

As the 2008 deadline for compliance with the landmark decision of the AU approaches, a recent AU/NEPAD survey (2007) found that there are decreasing numbers of countries with budget allocations of less than 5% and increasing numbers of countries with more than 5% but the rates of change remain rather low.

This indicates that some African countries are beginning to put resources into the development of the agriculture sector. However, the report concluded that most countries will not attain 10% national expenditure allocation to agriculture development by 2008.

While the trend is positive, it underlines the need for increased investments from the private sector, donors and lending institutions to fill the gap.

The NEPAD Secretariat is appealing to member countries to provide timely and accurate data and information to assist in building coalitions of partners at the national, regional, continental and international levels to encourage African countries to increase their national budget allocation to agriculture development and assist in mobilising additional resources.

To facilitate this effort, data and information is distributed through various strategic points of influence such as the AU Heads of State and Government Summits, the NEPAD Heads of State and Government Implementation Committee, meetings with members of parliament serving on parliamentary agriculture committees, the Pan-African Parliament, and meetings with development partners.

Assisting African countries to establish conducive-environment to encourage private sector investment NEPAD/AU facilitates policy dialogue to address constraints that discourage the private sector from increasing investment.

Over the last few years, the key interventions have included :

supporting RECs to accelerate liberalisation of trade ;

preparation of guidelines for land reform in Africa ;

facilitating development of key regional infrastructure ;

prudent management of the economy ;

peace and security, peer review, capacity-building and so on.

These interventions are important in creating the conditions for private sector participation in policy formulation and increased investment.

Assisting African countries to access concessionary development finance In the past, many loans were poorly managed and countries failed to pay back. Following debt forgiveness, many African countries are now very cautious.

If loans are properly utilised they offer development opportunities that would otherwise be delayed until after adequate savings have been made. However, loans attract interest and are of varying repayment periods.

Recognising the potential contribution of concessionary development finance to increased investment in the agriculture sector, NEPAD and the Food and Agriculture Organisation (FAO) are linking interested countries to suitable finance.

For example, Rwanda, Zambia, and Mozambique have been linked to the OPEC Fund for International Development (OFID) to finance bankable investment project profiles (BIPPs) or any other agriculture priorities.

Where necessary, NEPAD, OFID, and FAO are providing financial and technical support to prepare project proposals. In some cases, NEPAD also supports Ministries of Agriculture in securing Ministry of Finance endorsement of the funding.

Encouraging the G8/OECD to increase the pool of grant funds to support CAADP implementation Development partners provide either national budget support or direct project support. However the NEPAD Secretariat is concerned that donor grants to agriculture development in Africa decreased from 12.3% in 1985/1986 to 3.1% in 2005/2006 (Organisation for Economic Cooperation and Development (OECD) 2007).

Following debt forgiveness, many African countries wrongly thought that donor grants would replace loans. For now, it is important to realise that there is not much money going around in the form of grants and that African countries should focus on utilising other options.

At the same time, the AU/NEPAD is continuing to actively engage the G8 and OECD to encourage them to increase grants to leverage the national expenditure allocations for agriculture development, and to increase contributions to the various concessionary loan windows to implement CAADP.

Many stakeholders believe that the existing facilities are not adequately responding to the realities of attaining the Millennium Development Goals (MDGs) within the set time frames.

Therefore, NEPAD is also working with development partners to establish specific funding facilities, for example mobilising grants to establish :

the CAADP Trust Fund to assist continental and regional institutions to implement the assigned responsibilities ;

the Africa Fertilizer Financing Development Mechanism (AFFM) to promote increased use of fertilizer ;

a flexible project preparation fund to facilitate quick preparation of project proposals for priority investments being funded under concessionary loan windows ; etc. Source : NEPAD, march 28, 2008

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