Engaging Africa in Rural Investment: EU-AU Collaboration

A win-win rural transformation for EU-AU

The whole idea and essence of business relations, transactions, and exchanges between and amongst nations cannot be over-emphasized. As a matter of fact, the relationship between the EU and AU dates back many decades ago. From a sectoral viewpoint, both unions have collaborated, as well as engaged in sharing of information and knowledge, and have fostered the practice and business of technology transfer and skills development touching on all the SDGs and trade-related issues. Over time, this synergy has promised effective and efficient business opportunities for both parties and has contributed significantly to the transformation of economies in creating jobs, securing food, providing raw materials for industry, among other benefits. However, with the level of food insecurity and immense poverty entrenched in the rural areas of Africa, more resources and investments needed to be deployed in tackling those issues. Hence, the important questions outlined thus: what is a rural investment all about? why is it all-important? what type of rural investment is needed in  Africa? What are the bottlenecks and prospects expected? And finally, what suggested recommendations are needed is what this blog is all about.

What we must understand is that Africa like the rest of the world is dependent on its rural communities in achieving its economic growth. It is no longer news that agriculture is the dominant activity in rural areas and the African continent greatly rely on the agricultural sector in achieving its growth and support for its inhabitants especially the women and youths who, overtime, play significant roles and contributing to the revenue stream at either a micro or macro level. More so, rural communities are full of opportunities and that is the reason why it is paramount to consider rural areas as a prerequisite for economic growth. On June 29th, 2021, to emphasise the importance of rural investment, the Director-General of FAO at the UN, Mr. QU Dongyu emphasised and urges G20 countries to invest more in rural areas and this relates even more to Africa.

Rural investment is seen as programs or initiatives that are out to improve living standards among the local communities. This can be in terms of job creation, increase in income, and improvement in family livelihood and quality of life. The initiative/programs are usually initiated either by the local communities, government, investor/donors, or an individual. Smallholder farmers are key in rural investment to happen. And the African continent which is estimated that about 80% of the population resides in the rural, area, it is therefore imperative to invest in these communities to enhance growth. Drivers for investment in Africa and rural transformation, in particular, are the following sectors: agriculture, health, finance, education/capacity development, inclusion and diversity in terms of gender and decision-making,  to enhance growth.

Importance of rural development in Africa

Indeed, the importance of rural investment in Africa’s growth and development cannot be over-emphasized enough. Investing in rural communities in Africa is important for three important reasons.

First, it will help in eradicating poverty and unhealthy food. This is by investing in the area of sustainable development in rural areas like in food security, sustainable agriculture (less pollutant, GAP, and environmentally-friendly technologies), and nutrition with diversified food (SDG2). Sustainable agriculture is the core of African development since 60% of the continent relies on it for survival.

Furthermore, it will help in reducing rural-urban drift migrating from rural to urban areas especially among youths. This is because if they have the jobs, income, and good food in the rural areas, they will likely remain there.

Finally, it will help in reducing hunger and poverty in rural areas especially when it includes moving from mono-cropping or linear cropping to diversified and multiple cropping. Having various food to eat helps in reducing malnutrition, as a result of varieties of food options to choose from and selling the excess for additional income.

Challenges to Rural Development

Rural investment is an important element in strengthening the food system and transformation which the African continent greatly relies on to achieve its economic growth. However, according to a survey by Grow Africa, there are constraining factors that could make it challenging and they are:

1) Skills required in implementing investment projects or initiatives.

2) Negligible initial outlay needed in commencing investments.

3)Poor Infrastructure, machines, and other equipment deployed in project start-ups, among other initiatives.

4) Lack of collaboration and partnership between the private sector and the government

5) Enabling policies enforced by the government for rural investment initiatives or programs.

Opportunities

The EU and AU have been collaborating for decades and rural transformation is a smart way to empower the communities in Africa and help to achieve most of the SDGs including hunger and poverty which is very profound in the rural areas. Couple of things need to be done to make rural investment happens.

First is collaboration and partnership between donors, funders, and investors. For example, organisations like the EU, FAO, IFAD are already working with many partners on the group in Africa in various projects (Like EU-Africa Agriculture Task Force, GIZ) to facilitate projects on less advantaged communities in rural areas. With such a project, the aim is to provide the necessary information, knowledge and technologies needed to increase production, value addition, skills development, market linkages at the local, regional and international level and improve family’s livelihood. However more still need to be done, like opening up more international markets for the finished products to be sold.

Second is the huge number of untapped potential and talents with youth and women in Africa. When these groups are included in rural transformation and investment, it will lead to better engagement of the inhabitants in the community in the project. Engaging the youths for instance is a better way to engage farmers in agri projects.

The third is technological transfer. As the vision of the EU Tech Chamber (EUTECH)  states, “Technology Obliges” Technology is what will help to elevate the standards of living for the rural communities and stop migration for a greener pasture somewhere else. With technology, more can be produced with less and value addition achieve to attract better profit margins for the producers. The problem with this is the cost involved to afford these technologies which are certainly not free for the rural population, which the UN has classified them to be living below the poverty line.

Recommendation

Between EU and AU, much can be done to encourage rural transformation that is a win-win.

• Organise funding opportunities that target farmers and women farmers in particular to ensure an inclusive business. If the EU can subsidies for farmers and women to join exchange programs and encourage them to later become trainers in institutions back home, that will be an excellent way of empowering them and the communities where they come from
• EU can collaborate with the African ecosystem in Agri- tech like with agri-tech companies, local partners and universities in Africa who can replicate these technologies in Africa and bring it to the rural areas. EU can also carry out exchange programs between learning institutions to ensure knowledge transfer and capacity building for the locals.
• Enabling policies that encourage investment and not discourage it like the case of renewable energy solutions that is environmentally friendly and is very rewarding to farmers to meet their needs.

How EuroAfri Link fits the current Scenario

EuroAfri Link initiative mission  is to connect African agribusinesses with European entrepreneurs and investors in agriculture. Our aim is also to attract investments for projects in Africa that will close the gender gap and create a win-win collaboration that is free, inclusive, sustainable, and fair for the EU and AU.

Together we can make this happen. Stronger together

Authors:  Dr Ikechi Agbugba, University Professor & Co-founder, AgriFood Networks (AFN), Rotterdam, The Netherlands https://www.linkedin.com/in/ikechi-agbugba-phd-29812813/   Patience Chindong, EAL  and Evelyne Achieno – EVICO Service