India and China today have six times more irrigated farming
per capita than Sub Saharan Africa. By 2050 that gap could be 10 times, as
population growth levels off in the world's two most populous countries while
doubling in SSA.
With climate change making rain-fed farming ever more
precarious, there needs to be a big push to build irrigation infrastructure in
those parts of SSA - and there are many - which have sufficient water. You may
be surprised: SSA has one of the lowest usage rates of renewable water supplies
globally (less than 5%).
This will be expensive. Efficient, well-organised irrigation
systems cost around $10,000 per hectare. Doubling SSA's irrigated area from 7
to 14 million hectares, the minimum needed simply to keep pace with population
growth, would have a price tag of some $70 billion. That would stretch public
sector and aid budgets.
The problem is that the private sector is not rushing in to
fill the gap. Greenfield agriculture projects, at least in their early stages
of development, are simply too risky - and low return - for commercial capital.
Moreover, developing irrigation projects so that they are both financially
viable and socially inclusive takes a great deal of groundwork.
AgDevCo has spent four years putting together a pioneering
5,000 hectare irrigated farm hub scheme in Ghana, managing all the community
consultations and conducting all the necessary studies and trials. We have
invested some $6 million of our own funds to date.
The Babator irrigation hub has now attracted its first
commercial operator who has invested $1.8 million and is growing maize and
onions under pivot. The community benefits from rental payments, a revenue
share and access to irrigated plots. At full operation, the community will have
access to 1,500 hectares of irrigation for their own use. That is climate
resilience.
There will also be an outgrower scheme designed to reach
10,000 smallholder farmers in the area, providing training on conservation
agriculture plus access to inputs and a reliable market.
SSA needs many more schemes like Babator (another example in
the AgDevCo portfolio is the Phata Sugar Cooperative scheme in Malawi, shown in
the images below). Funding them will require a financing mechanism capable of
providing billions of truly patient capital (i.e. 20-year money paying 1-2%),
which can only come from the public sector.
International climate facilities such as the Green Climate
Fund are potential sources of patient capital. However, the majority of funding
is still directed to renewable energy projects. As the cost of wind and solar
falls, isn't it time to direct a larger share of climate finance towards
adaptation projects in low-income countries?
For SSA to and tackle food security and climate change over
the next generation there needs to be a major push on irrigation funded by
patient capital.
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