18 December 2009

Agricultural Reform in Africa at U.S.-Africa Business Summit

Podcast with Stephen Kimani, programs manager for Kilimo Trust

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Narrator:

Speaking at the Seventh Biennial U.S.-Africa Business Summit, Secretary of State Hillary Rodham Clinton described her travel to Africa in August 2009 as extraordinary. She said the point of the trip was to underscore the importance of Africa to the Obama administration, because Africa matters to America’s progress and prosperity.

Along with the business summit, a trade show was held to showcase African businesses. We spoke with Stephen Kimani, programs manager for Kilimo Trust.

Stephen Kimani:

Kilimo Trust is a trust registered in Uganda. It was established in 2005, and we deal with wealth creation and poverty reduction through agriculture and agribusiness projects all over East Africa. Currently we have about 23 projects in Kenya, Uganda, Tanzania, Rwanda, Burundi.

They deal with expanding market-led sustainable agriculture. They deal with efficient value chains. They deal with technical and institutional innovations, engaging the private sector. They also have policy dialogue and also the mainstream environmental sustainability.

Narrator:

In her speech, Clinton stated the importance of addressing food security and agricultural reform. These sectors are not only a moral imperative, they are also at the heart of sustained improvement throughout the African economy.

Kimani:

Seventy percent of the populations are involved in agriculture. Mostly rural women. Seventy percent of the population. And within these countries, agriculture contributes up to 40 percent of GDP, so it is important and we have seen that anytime agricultural development declines, the overall development also declines – it’s actually the driver of the economy. If agriculture is growing at 5 percent, the economy will be growing at around 7 percent. If agriculture drops to 3 percent or 1 percent, the economy will drop also to around 2-3 percent, so if agriculture is not growing, the economies won’t grow. So the interventions that are required in these countries is to improve agriculture and then the whole economy will grow.

At the end of the day we want to see incomes increasing for small holder farmers in East Africa through agriculture and agribusiness. People will be involved in agribusiness like agro-processing; others will be involved in better production methods and value addition for the produce, all to increase income and bring about growth and development and improved well-beings of the populations.

Narrator:

Beyond the importance of improving agricultural processes, transport and infrastructure is another key part of creating a sustainable African agricultural economy. Kimani’s description of one of Kilimo Trust’s projects emphasizes the role of transport and how that enables the development of agricultural networks.

Kimani:

They would work in the sense that this will be a totally wholesale market. All the produce would come from the farms, then it is assembled in a central wholesale market from where other smaller markets would get the produce from. We think that when the market is there, there can be backward linkages with farmers who will be generating economies of scale and bringing the produce to a central point. The prices would be regulated, the infrastructure would ensure the quality of the produce. And we think that would contribute towards development from production aspects to packaging and grading and transportation to a central place, then it is redistributed to other markets. The wholesale market would be for big buyers, not retailers; we’re not doing retail. So supermarkets and other smaller markets would come to the wholesale market and get the produce from there and take it the other markets within Nairobi, within Kigali. But there are also opportunities for exporting because the quality standards are enhanced.

Narrator:

Revitalizing and modernizing the agricultural sector in Africa is a smart investment, Clinton said during her speech. U.S. government programs like the Millennium Challenge Corporation are making the needed investments in African training and management capability. Alongside this partnership development, the Obama administration is working with African government to tackle corruption and create good governance. President Obama has committed to doubling foreign assistance by 2014. But the administration’s approach will be to generate long-lasting solutions that empower African nations to develop their own path to development and prosperity. Trade shows and private-sector exchanges are a key part of that development process. Clinton said it is time to realize that with technology and innovation, African nations can leapfrog “dirty” stages of development and become more quickly integrated into the global marketplace. Reforming the agricultural sector, and investing in people, especially women, will enable Africa to move toward the sustainable future that all people are seeking.

Kimani:

We are here for two things. Number one, we would like individuals to invest in businesses which we think are ready and they can be profitable to them as individuals. But we are also looking at other individuals and institutions which can invest in public good activities — farmer assemblies, farmer empowerment, business development support for farmers. And that in itself is not necessarily business; it’s a publicgood investment, and we are approaching organizations such as USAID to bring in more people within the agricultural sector, then it will contribute to overall growth and business. 

A summit like this is very important for us as an organization because we are showcasing some of our success stories. We have several projects — out of the 23 projects we have had, some of them have graduated into viable businesses. We have markets, wholesale markets, in Nairobi and Kigali. We have investment prospectuses which we can provide to investors in this conference, and when they look at them, we are hoping that they will invest and they will be interested to participate.

Narrator:

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