Speeches & Transcripts

Private Sector Solutions for the Water Crisis in Agriculture by World Bank Vice President for Africa Makhtar Diop

October 9, 2013

World Bank Vice President for Africa, Makhtar Diop World Bank Annual Meetings Washington DC, United States

As Prepared for Delivery

Good afternoon and thank you for the kind invitation.

Sub-Saharan Africa stands at the cusp of a transformative opportunity … thanks to its patrimony of plentiful land and water resources, as well as its large and growing labor force.

Africa has nearly half of the world’s fertile land that is yet to be brought under cultivation – some 202 million hectares of arable land that is non-protected, non-forested with low population density.

While some areas of the continent are hyper-arid, arid or semi-arid, on average, Africa’s bountiful water resources are underutilized. Sub-Saharan Africa currently uses only two to three percent of renewable water resources, compared to five percent worldwide.

A new World Bank study on agribusiness has predicted that Africa’s food and beverage markets are set to top one trillion dollars by 2030, up from only $313 billion today. But too much of the food consumed in Africa is imported, denying opportunities for local producers and causing a drain on scarce foreign exchange.

This presents a huge opportunity to grow more food through sustainable agriculture and feed Africans with better quality, more nutritious food. It also presents an opportunity to create wealth for farmers through expanding markets and trade, and benefit consumers through cheaper, more diverse food products.

So what is holding us back? How can we grasp the trillion-dollar opportunity that lies within reach? How can new public-private partnerships get us from here to there?

As a development practitioner committed to finding solutions, I see the need to focus attention on binding constraints that are keeping a particular sector from achieving its full potential. Many development experts agree that underinvestment in irrigation has long held back the productivity, profitability and sustainability of African agriculture.

Underinvestment in irrigation is one of the reasons why the Green Revolution that transformed agriculture in the tropics of Asia and Latin America bypassed Africa. Clearly, other factors – more heterogeneous production environments, inadequate research capacity, lack of technology, poor policies, and weak institutions – also had a role to play, but the inability of farmers to irrigate their crops stands out.

The numbers are stark. Of the some 183 million hectares of cultivated land in Sub-Saharan Africa, over 95 percent is rain-fed, and less than five percent benefits from some forms of agricultural water management practices.

Of the 7.1 million hectares that are equipped for irrigation, nearly one-third is no longer functioning due to lack of maintenance, and only 5.3 million hectares can be considered usable.

So as one can see, there is an enormous opportunity to achieve transformational impact by bringing more irrigation to parched lands.

But along with the opportunity come a number of challenges. Water resources are available, but they are not limitless. Agriculture is the largest user of the world’s freshwater resources: anywhere between 80 to 90 percent of fresh water withdrawals are used to irrigate crops and grow food. And agriculture is also a notoriously inefficient user of water.

Take irrigated rice. I hail from Senegal, where rice literally means food for millions of people. The same is true for Senegal’s neighbors. Rice is West Africa’s most important food import at a cost exceeding $3.5 billion annually. According to one estimate, only 3.5 million hectares of the roughly 240 million hectares suitable for wetland rice cultivation in West Africa have been exploited. Therefore a huge market opportunity remains unexploited.

However, growing rice requires lots of water. Up to 2,500 liters of water are needed to produce one kilogram of rice.

While rice is an extreme example, suffice it to say that by bringing modern irrigation techniques including drip irrigation and micro irrigation, we can reduce water use substantially for growing food crops, meet the threat posed by climate change and reduce agriculture’s environmental footprint through climate smart agriculture.

It is in this context that companies such as Netafim can bring the needed water-saving technologies that will help to make a difference, put more food on people’s plates and ensure that every drop of precious water goes to the plant.

For its part, the World Bank Group is working with client countries to improve the productivity and profitability of the agriculture sector. We have increased our lending, and in fiscal year 2013, our commitment to agriculture and related sectors has topped $1.3 billion.

Our aim is to double the irrigated area, and the corresponding investment cost is roughly estimated at $40 billion of which the Bank could finance 25 percent. Specifically in the Sahel, we want to expand irrigated area from 400,000 hectares to one million hectares. And we are keen to collaborate with the private sector in irrigation investments through public- private partnerships similar to Burkina’s Bagre Growth Pole project and Senegal’s Sustainable and Inclusive Agribusiness Development project that is under preparation.

Later this month, we are hosting two major conferences – on pastoralism in Nouakchott and water for irrigation in Dakar – focused exclusively on the development challenges confronting the Sahel. We want to move from traditional crisis-response modes toward a more proactive stance that helps communities to cope and adapt, build resilience, and achieve more durable development solutions.

Water is central to life and to agriculture. Given Africa’s generous water resources endowment, I am confident that Netafim’s success stories from Mexico and Peru can be applied in Africa.

Let us take the opportunity of our meeting today at IFC to forge the next generation of public-private partnerships needed to bring about transformational change. Let us work together to bring the benefits of modern irrigation technologies to African farmers. It can be done.

Thank you.

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