AFDB says Africa must look beyond food price shock

By Lamine Ghanmi Reuters - Monday, May 5 09:32 pm

RABAT (Reuters) - Africa risks losing gains from its two-decade-long struggle to trim poverty and expand economic reforms unless governments look for long-term solutions to food-price shock, the African Development Bank (AfDB) said.

The bank, the only multilateral development body specifically devoted to Africa, had added $1 billion (507 million pounds) in funding to raise its portfolio of agricultural loans to $4.8 billion to help the continent weather dramatic food price increases, its president, Donald Kaberuka, told Reuters in a telephone interview on Monday.

He said he did not expect the food crisis to cause famine on the continent because international organisations were stepping up aid.

"I'm glad that the international community is responding to the food crisis but it is important to look to the long term to augment food production in Africa in general," he said, speaking from the bank headquarters in Tunis.

Kaberuka said the bank was allocating $250 million to help some African countries deal with immediate financial difficulties stemming from the crisis.

Farmers in many African states face an uphill struggle to weather the food crisis and increase production in the short term to benefit from rising prices because they were suffering from higher costs of fertilisers and fuel, Kaberuka said.

The food price surges have caused what U.N. Secretary-General Ban Ki-moon called a "global crisis" and triggered riots in many countries in Africa and elsewhere.

Governments in most fragile African states scrambled to introduce measures to offset soaring global prices for foodstuffs and fuel which aid experts say threaten to push 100 million people worldwide into hunger.

Africa is particularly exposed to the global food price increases as the cost of food makes up such a large proportion of meagre household budgets and many countries across the continent rely heavily on imports -- especially of rice.

"I'm extremely concerned that unless we produce short-and- long term responses to the food crisis, and we must, there are risks of three major setbacks to the continent," said Kaberuka.

PROTECTIONISM

Kaberuka said the AfDB and its partners are keen to help Africa expand agricultural output and productivity.

"We are going to promote agribusiness in terms of added value production, increased productivity and higher yields," he said.

Kaberuka added: "There is a compelling need to increase the level of fertilizer use from the current average of 8 kg per hectare to an average of at least 50 kg per hectare in 2015."

AfDB had recently set up an African Fertilizer Financing Mechanism Special Fund to mobilise resources from donors to finance, in particular, fertilizer production, distribution, procurement and use.

Kaberuka urged private investors to join efforts to improve the food situation in Africa. "There are huge opportunities for private investors in Africa's agribusiness," he added.

The AfDB, whose shareholders include Africa's 53 nations and 24 non-African donor countries, lends commercially to Africa's richest nations and at concessionary rates to poor ones from its Development Fund, financed largely by Western donors.

Kaberuka stressed the need for upgrading Africa's farming infrastructure, saying that lack of basic infrastructure hampered the movement of food within the continent.

He cited the example of African farmers losing 40 percent of their harvests each year because of rickety infrastructure. "If we can cut that 40 percent by half, we will have added 5 million metric tonnes of cereals each year."

Kaberuka called on producers of rice and other cereals throughout the world to steer clear of protectionist measures including hoarding, export tariffs and outright bans of foreign sales.

"We are urging ... that protectionist measures should not be part of these solutions. Such measures will make this crisis even worse. We should do everything we can to discourage this sentiment of protectionism," he said.

(Editing by Matthew Lewis)

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