#AGRF2020: Gilbert Hougbo on how to solve financing challenges in Africa’s agriculture sector

Africa's agriculture sector faces numerous challenges, from food insecurity to the impacts of climate change. One of the significant obstacles hampering progress in this sector is the financing gap. Gilbert Houngbo, the President of the International Fund for Agriculture Development and former Prime Minister of Togo, shed light on the critical need for innovative financing solutions during a recent interview with CNBC Africa. Houngbo emphasized that traditional sources of funding, such as Official Development Assistance (ODA), while important, are insufficient to meet the growing needs of the agriculture sector. He pointed out that only around 5 to 6% of ODA is currently allocated to agriculture, underscoring the necessity to explore new avenues for financing. One key alternative source of funding highlighted by Houngbo is remittances from the African diaspora. Remittances have been on the rise and have the potential to surpass ODA from OECD countries. To leverage this resource effectively, policies must be put in place to encourage and facilitate remittance flows into agriculture initiatives. Another crucial avenue for financing is the involvement of the private sector. While agriculture may not always be the most appealing sector for private investment, partnerships can be forged to attract private capital, expertise, and technology. By engaging with the private sector through joint ventures, initiatives like the creation of agricultural businesses can be supported and scaled up. Houngbo stressed the importance of ODA as a backbone of funding for the agriculture sector but also advocated for its enhancement, especially in the context of addressing the impacts of climate change. He highlighted collaboration with organizations like the Green Climate Fund to increase financial inflows for climate-resilient agriculture development. The conversation then shifted to the pressing issue of climate change, with Africa being one of the most affected continents despite contributing minimally to global pollution. Houngbo echoed the sentiment that polluting nations should bear a higher responsibility for mitigating climate change and supporting affected regions. While the concept of reparations has been debated, he emphasized the need for practical solutions that prioritize adaptation funding, particularly for vulnerable regions in Africa. In response to the COVID-19 pandemic, Africa's agriculture sector has showcased resilience, with Houngbo acknowledging that the continent has fared relatively better compared to other regions. Despite challenges faced by countries like South Africa, efforts to maintain agricultural sustainability have been notable. In conclusion, Houngbo's insights underscore the importance of diversifying financing sources, harnessing remittances and private sector partnerships, and prioritizing climate adaptation funding to bolster Africa's agriculture sector. By addressing these key areas, countries can work towards sustainable agricultural development that is resilient in the face of challenges.