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Area 3: Private Investment and Public-Private Partnerships

Outcomes:

 

Presentations:

 

References:

 
 

Questions for Discussion by all Breakout Groups 

 
TUESDAY, MARCH 1 
 
Where are we?   Examining Partnership Progress and Lessons in Four Key Areas: Integrating Food Aid, Food Security and Nutrition Programs; Building Effective Producer Organizations; Public-Private Partnerships; and Higher Education, Research, and Training
 
Discussion questions for all breakout groups:
 
(1)  Where are we? What are we learning from our actions to date? Where have we made progress in putting together partnerships for action?
 
(2) What are the main constraints to greater effectiveness and scaling up impacts in this area? 
 
WEDNESDAY, MARCH 2
 
How Can We Do Better? What Do We Need to Do Next to Get Down to Business and Scale up Agricultural Development in Africa?
 
Discussion questions for all breakout groups:
 
(3) What are specific recommendations for action by all partners (national and regional CAADP/FTF programs and their partners in the donor, university, research, private sector, and NGO communities) that would increase impact, especially through scaling up successful efforts?
 
(4) What are specific recommendations that would improve how country and regional CAADP/FTF programs and their partners could better “learn while doing”?
 
 

Partnership Area 3 Overview

 
Private investment and PPPs
 
Most African governments no longer automatically assume that the public sector must be the lead investor in agricultural development projects. But the mechanisms for government institutions to promote private sector investment in agriculture and agribusiness effectively and to partner with the private sector in planning the expansion of agribusiness and agriculture-related investments are still not widely-tested or –trusted. What factors are most critical to creating an environment friendly to private agricultural and agri-business investment? 
 
The “Doing Business” work provides some guidance regarding business in general. But is “Doing Agribusiness” somewhat special? The food price crisis in 2008 caused governments that had committed themselves to open borders and regional trade to impose barriers on exports and imports and to attempt to fix prices at levels consumers could afford. Agribusiness also involves critical issues of food safety, sanitary and phytosanitary measures, use of genetically engineered crop varieties, and access to productive land on a scale that, for most governments, has policy implications. 
 
However, the business press is now proposing that Africa should be seen as a “frontier” market for foreign investors, not only in the mineral sector, but also in basic sectors like agriculture. Some African governments have already leased hundreds of thousands of acres to outside investors with the hope of igniting a boom in agricultural investment and productivity. Even if this strategy works, will it translate into increased food security and reduced hunger? Angola and Chad are among the fastest-growing African countries right now but they are also countries in which indicators of hunger and malnutrition are worst. 
 
Other analysts have suggested that increasing connectivity, promoted in part by regional economic communities and greater investments in trans-border infrastructure, will provide robust regional markets for domestic investors in the food and agriculture sectors and ensure that the benefits of agricultural value-added are realized in Africa. Are we seeing any evidence that African governments and private investors (both domestic and foreign) are responding to changes in policy and infrastructure investments?
  
TUESDAY, MARCH 1
 
 
(1)    Where are we? What are we learning from efforts to increase private investments in African agriculture and agribusiness? Where have we made progress in putting together partnerships for action – between governments and private investors, between donors and private investors, between NGOs and private investors, etc.?
 
(2)   What are the main constraints to greater effectiveness in promoting private investment in agriculture and agribusiness?    How can investments of all partners be enhanced to scale up impacts on jobs, incomes, food supplies, foreign exchange earning, etc.? 
 
Possible questions for discussion:
 
•        How can potential investors and supportive donors respond to each country’s current internal conditions and the government’s development approach and strategies while still taking a long-term perspective on opportunities for development of value chains and sectoral development overall? Are there ways for private sector investors to reduce the level of politicization in the agriculture sector and put it on a more predictable, businesslike footing?
 
        How important is foreign capital, technology, and know-how to expanding Africa’s agribusinesses today? What are the factors that are keeping foreign capital, technology and know-how out of the region? How critical are issues of food safety regulation, for example?
 
        What are the key microeconomic constraints to establishing private sector agribusinesses in sub-Saharan Africa? At which links in which value chains are constraints the most severe? Is it important to pay attention to the costs of doing business as well as the ease of doing business? How can agribusiness investors manage high transport, electricity, and other logistical costs when they make up a large share of the final consumer price – but are beyond immediate control?  
 
        What are the key sectors of opportunity attracting both domestic and foreign investor interest? Exports, regional trade, local trade? Processing, storage, or business services (financing, insurance, transport, etc.)?
 
        Where are private investors taking the lead in identifying opportunities, mobilizing capital, and forging ahead with agricultural production, processing, and trade? How critical for these efforts is the organization of smallholder farmers to permit their integration into viable value chains?
 
        How much risk is out there? How do the different kinds of risk – climate, political, economic, competition – stack up?
 
 
WEDNESDAY, MARCH 2
 
(3)   What are specific recommendations for action by all partners (national and regional CAADP/FTF programs and their partners in the donor, university, research, private sector, and NGO communities) that would increase private sector investment in agriculture and agribusiness. What should governments and donors do, in particular, to contribute to scaling up investments?
 
(4)   What are specific recommendations that would improve how country and regional CAADP/FTF programs and their partners could better “learn while doing” as they seek to promote greater private sector investment and better working relationships between government and private sector entities?
 
 
Some possible questions for discussion:
 
        A healthy agribusiness environment involves both public sector involvement and private capital and know-how, but what makes for effective partnership that can be sustained and solve problems as they come up? Are business associations essential to ensure both policy advocacy and problem solving vis a vis the government? What should CAADP/FTF partners do to help develop such healthy business environments, including building the organizational capital of farmers?
 
        How can public-private partnerships that will accelerate agricultural growth be fostered by external agencies such as USAID, OPIC, the World Bank, or the African Development Bank?
 
        A healthy agribusiness environment permits mitigation of economic and perhaps political risks. What kinds of tools and information are needed to enable private investors to manage their risks? How about managing weather and climate risk?
 
        Property rights are key to agribusiness investments. Is Africa moving fast enough to provide secure property rights to potential investors – from the farm level to the level of major processors and exporters? What more could or should be done?

 

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