At least $30-billion a year would have to be invested in the sub-Saharan Africa agricultural sector if the first Millennium Development Goal of halving the hungry by 2015 was to be achieved, the United Nations Food and Agriculture Organisation has calculated.
The International Tradeprobe report, published by the National Agricultural Marketing Council (NAMC) in cooperation with the Department of Agriculture, Forestry and Fisheries, reported that, with 33 of the world’s 49 least developed countries forming part of the sub-Saharan African region, foreign direct investment (FDI) is an important source of revenue for development.
Africa is among the world’s regions most affected by hunger with more than 200-million people across the continent suffering from chronic malnutrition. The report stated that one in three Africans do not have enough to eat.
While developed countries still account for the bulk of total FDI flows into Africa, research by United Nations Conference on Trade and Development has found that FDI from developing countries increased from an average of 18% between 1995 and 2000 to 21% between 2000 and 2008.
The rapid economic expansion in Asia - particularly in China, which possesses only 7 % of the world’s arable land, yet houses nearly 20% of the global population - is reported to be the driving force behind the upsurge in South-South agricultural FDI.
It was found that the main factors fuelling FDI flows, with food security serving as a compass, are the availability of land and water resources to irrigate it. Ethiopia, Sudan and Tanzania are among the major recipients of Southern FDI in agriculture.
Meanwhile, the report also stated that the economic benefits of the agricultural sector have been fundamental in measuring the importance of the sector. Some of these benefits included agriculture’s potentially significant contribution to the gross domestic product, its export potential, foreign earning potential and employment creation.
Agriculture’s value has historically been viewed in light of its contribution to food security and alleviating poverty.