Le rôle du Groupe de la Banque africaine de développement dans le financement de l agriculture irriguée: Exemples de la Gambie et du Ghana

Transcription

1 Private Irrigation in sub-saharan Africa The role of the African Development Bank Group in financing irrigated agriculture: On-going examples in Gambia and Ghana. Le rôle du Groupe de la Banque africaine de développement dans le financement de l agriculture irriguée: Exemples de la Gambie et du Ghana Abstract Harouna Dosso The paper describes the principles guiding the lending policies of the African Development Bank Group, in regard to irrigation, rural development, and encouragement of the private-sector role. The policy is oriented towards a primary goal of alleviating poverty, which in most countries of the region is more severe in rural areas. Provision of stable, dependable water supplies is seen as a key part of this. The paper illustrates the thrust of this policy with four examples of projects currently supported by the Bank, drawn from Ghana and The Gambia. Résumé Cet article décrit les principes qui guident la politique de prêt du Groupe de la Banque africaine de développement en ce qui concerne l irrigation, le développement rural, et la promotion du rôle du secteur privé. L objectif global de cette politique est l allégement de la pauvreté, très forte dans les zones rurales de la plupart de pays de la région. La mise en place de systèmes stables et fiables d approvisionnement en eau occupe une place privilégiée dans cette politique. La communication illustre l application de cette politique à travers quatre exemples de projets soutenus par la Banque au Ghana et en Gambie. 1. The role of the African Development Bank Group The African Development Bank adopted a new Vision in 1999 that defines poverty reduction and sustainable economic growth as the overarching objective of Bank Group activities. Within this framework, the Bank has continued to mobilise resources and to provide technical assistance for its regional members in developing key sectors such as agriculture, education, and health. The Bank emphasised the development of the private sector as the essential engine of growth, and is also seeking to improve the policy environment in its regional member countries by enhancing governance systems and promoting policy reforms. In addition, the Bank Group has sought to promote regional co-operation and integration by providing technical assistance and by financing multinational projects. Over the period, the Bank has approved an annual average of US$2 billion for projects, technical assistance grants, guarantees, and debt relief, with equal amounts coming from the ADB (African Development Bank) and ADF (African Development Fund). Support for public-sector investments has focused on agricultural development and improving social services such as education and health. Resources have also been provided to support policy reforms and investments in infrastructure. 1.1 Concerning agriculture and rural development The vast majority of Africans live in rural areas. Thus, poverty in most countries being a rural phenomenon, the Vision argues for giving priority to interventions in the agricultural and rural sectors as these can have a direct and positive impact on poverty and living standards on the continent. The Bank also considers infrastructure, including feeder roads, rural water supply and irrigation, as a key priority. In addition, the Bank would facilitate rural financial intermediation by supporting bottomup, demand-driven, micro and rural finance schemes aimed at assisting the poor and vulnerable groups of society. 267

2 Dosso: The role of the African Development Bank Group in financing irrigated agriculture 1.2 Developing the private sector The development of the private sector has also been a priority. A wide array of instruments has been used for this purpose: term loans to private enterprises with no required government guarantees; equity participation; quasi-equity investments; guarantees; syndication and underwriting. The Bank Group has also extended lines of credit to private financial institutions for on-lending to smalland medium-size enterprises. At the end of 2000, the total cumulative portfolio of private sector approvals had reached over US$500 million. More than US$2 billion in resources has been mobilised in these and other ventures. 2. Bank-financed irrigated agriculture: Lessons learned We all know that most of the agriculture activities in sub-saharan Africa are heavily rainfall-dependent, which leads to problems due to erratic and deteriorating rainfall patterns. Although the annual rainfall may appear sufficient, its erratic and poor distribution makes it unreliable for crop production. Throughout the growing season the rainfall is characterised by considerable variability in time of onset, duration and intensity. Food production fluctuates from year to year, which poses uncertainty and risk to survival. Agricultural production begins with human effort. Successful investments are those that involve rural people as active participants rather than simply as recipients. For instance, the incorporation of farmers into field trials in a research programme can identify problems and potential solutions with the use of particular varieties, cultivation practices or pesticide application procedures. Likewise, institutional configuration often follows from decisions about the scale and technology. For instance, opting for one type of irrigation system (large versus small, pump versus gravity, etc.) constrains the choice of the institutional alternatives. The unique needs of special groups must be taken into account when choosing among institutional alternatives for programme implementation. From experiences, as supported by the following case studies, the success of agricultural development programmes, and sustainable use of the natural resource endowment, rest on the appropriateness and strength of the initiatives undertaken by the populations of the Bank s regional member countries. The Bank promotes the development of irrigation as a production technology, through a wide variety of projects in its agricultural portfolio. Irrigation system development has been funded directly and through lines of credit, and as part of the food crop and export crop projects. The irrigation policy of the Bank is to support irrigation and drainage investments in areas where a significant potential exists for sustainable irrigated agriculture. The Bank s implementation strategy for irrigation differs according to the level of technical, infrastructural, and institutional strength of each country. Loans will be made for projects which: Rehabilitate existing irrigation schemes, as a priority over new irrigation developments, whenever feasible. 268 Improve the technical and financial management of existing irrigation systems. Increase irrigation infrastructure where warranted. Given the high costs of site development in Africa, this must involve careful comparison with costs and returns to rainfed crop production technologies. It also must involve matching site selection, scale, technology, and management structures with evolving national capacity to operate and maintain the irrigation system. Increase the institutional efficiency of irrigation and drainage schemes, notably in encouraging decentralisation of irrigation system design and management, including the involvement of irrigation associations and private farmers in main system, as well as on-farm, water management where feasible. Increase the flexibility of cropping patterns to improve incentives to farmers to support system operations and maintenance and to improve on-farm water and input management. Use advanced irrigation technologies where these are economically efficient in agricultural production.

3 Private Irrigation in sub-saharan Africa 3. Case studies In this section, brief descriptions are given of some of the Bank Group s ongoing projects in assisting the development of irrigated agriculture in West Africa. 3.1 The Gambia: Lowland Agricultural Development Project (LADEP) The lack of any significant means of retaining water on the fields leaves farmers exposed to a significant risk of crop failure if rains are poor or erratic. LADEP, which began in 1996 and is scheduled to be completed in 2004, will create nation-wide sustainable rice development schemes, based on low-technology engineering already proven in the field, and responding to beneficiary demand, where the beneficiaries are prepared to contribute to the development in the form of self-help labour. The objective of the programme is to increase total production in the traditional rice production systems of the lowland by about 12,500 tonnes per annum in Project Year 8, on a sustainable basis, using a community-based demand-driven developmental approach. By the end of the programme implementation, it is expected that there will be around 20,000 rice farmers who have plots within the perimeters of schemes developed under LADEP. These farmers will benefit from improved food security and drought mitigation capabilities. It is estimated that each household would have a total production of field crops increased from 2,400 kg to 4,600 kg. Table 1. The Gambia; Lowland Agricultural Development Project; Sources of finance; Programme duration African Development Fund Government of The Gambia IFAD Total Note: UA = Bank s Unit of Account UA 1.00 = US$1.26 Table 2: The Gambia; Lowland Agricultural Development Project; Costs of project components. Component Foreign cost Local cost Total Soil and water schemes Tidal swamp access Master plan Subtotal % of total project cost 79% 55% 68% Other components Total project cost Ghana : Kpong Irrigation Project Studies in the 1980s identified the Kpong area as appropriate for irrigation development to improve the local production of rice and other food crops. The Kpong dam would provide a reliable water supply. The project began in The main objective is to realise the potential productivity of resources which are currently underutilised, such as the Kpong dam; develop land for increased and sustainable crop production; and improve living standards in the project area. 269

4 Dosso: The role of the African Development Bank Group in financing irrigated agriculture The project comprises the following major activities: (a) (b) (c) (d) (e) (f) (g) provide gravity irrigation supplies from Kpong reservoir and remodel the existing irrigation system for cultivation of paddy by smallholders; rehabilitate about 2,000 ha of existing irrigated land and further develop about 1,070 ha of gravity irrigation; upgrade the technical capabilities of the Ghana Irrigation Development Authority (GIDA); initiate rational farmers participation in project management and progressive privatisation of agricultural machinery; provide credit facilities to farmers; rehabilitate buildings; improve potable water and electricity. Project benefits: The project is designed to be self-accounting and would recover costs of inputs and services provided by the project to the farmers, including water charges and land rent. The incremental total annual agricultural production at full development would be about 16,500 tonnes of milled rice. The project will directly benefit about 3,000 farming families and increase opportunities for rural employment and economic activities in the area. Table 3. Ghana; Kpong Irrigation Project; Sources of finance; Entry into force; African Development Fund Loan African Development Fund Grant Arab Bank for Economic Development in Africa (BADEA) Government of Ghana Total Table 4. Ghana; Kpong Irrigation Project; Costs of project components. Component Foreign cost Local cost Total Land Development Construction supervision Credit Subtotal % of total cost 54% 46% 51% Other components Total cost of project Ghana: Small-scale irrigation development project This is a 5-year project. The Bank funded a small-scale irrigation study to identify potentially suitable sites. There are vast potential areas with good organic soils along small seasonal-flow streams and in alluvial-soil valley bottoms that are suitable for small-scale irrigation development. The project aims to increase the production and productivity of crops by expanding small-scale irrigation by 2,590 ha. The project will construct 15 small-scale irrigation schemes of 50 to 200 ha (2,142 ha), 4 water conservation schemes of 40 to 120 ha, and 12 micro-irrigation schemes of 2 to 24 ha totalling about 270

5 Private Irrigation in sub-saharan Africa 2,590 ha in Southern and Northern Ghana for the production of food crops. The farmers will be mobilised and organised to establish Irrigation Farmers Associations (IFAs) to enhance their participation. The participation of women beneficiaries will be encouraged as women mostly do food production. Training will be provided for farmers, extension agents and project implementation staff. Project benefits: Reduced dependency on rainfed crop production will alleviate the risks of household food shortages during the dry season as well as years of drought or bad distribution of rain. The project will raise crop production by 16,235 tonnes annually. It will raise rural incomes and provide better nutrition of the participating farmers. Vegetable production by women farmers will be encouraged. Additionally, the research programmes would lead to improved varieties and practices for the total area of irrigation. It is estimated that 6,000 farm households will benefit directly. Table 5. Ghana; Small-scale irrigation development project; Sources of finance. African Development Fund Government of Ghana Others Total Table 6. Ghana; Small-scale irrigation development project; Costs of project components. Component Foreign cost Local cost Total A. Land development Civil works contracts Farmers contracts Sub-total B. Farmers support services Farmers training Extension Credit Sub-total Sub-total A + B % of total cost 63% 65% 64% Other components Total project cost Ghana: Special Programme for food security: Pilot Project The Bank will make available a grant up to UA711,180 to support a pilot project, which targets mainly smallholder farmers in drought-prone areas of the country. Increasing their productivity and production of staple food crops on a sustainable basis will increase their incomes; improve household nutrition and food security. The specific objective of the pilot project is to test production-increasing technologies so as to increase the productivity of smallholder farmers and improve household food security through: (i) (ii) (iii) water management, crop intensification, and agricultural diversification; capacity building; project co-ordination and technical support. 271

6 Dosso: The role of the African Development Bank Group in financing irrigated agriculture The technical options proposed will be as follows: (a) (b) (c) small motorised pumps on a shallow well or perennial river for command of 3.0 ha; treadle pump on a shallow well for small command areas (0.25 ha); low-cost drip irrigation by pumping (treadle pump) from shallow bore-holes for small plots (0.1 ha). Table 7. Ghana special programme for food security: Sources of finance. African Development Fund Government of Ghana FAO Others Total Table 8. Ghana special programme for food security: Costs of project components. Component Foreign costs Local costs Total Water control and crop intensification % of total cost 16% 43% 34% Other components Total project cost Conclusion and recommendations In general, irrigation will make possible the production of a wide variety of food and cash crops, intensify the cropping pattern and provide flexibility in the cropping period. This will assist in providing food at times of scarcity, ease the marketing and price constraints by spreading production and improve food security, nutrition, farmers incomes and employment opportunities, thus contributing significantly to poverty alleviation. Small-scale farmer-managed irrigation has the potential, in the longer term, to increase significantly overall production from the agricultural sector; and reduce the pressure on land and also the rate of deforestation; reduce the reliance of food imports and lead to greater national food security. I would like to conclude by noting that the opportunities and risks of globalisation are here to stay. We can only rise to the challenges and work within the broad framework of closer integration into the world economy. The African Development Bank will continue to mobilise resources and provide technical assistance to its regional member countries. It will also assist them in deepening their policy and structural reforms to attract private capital, in diversifying their export bases, and in capturing larger trade and investment shares in the international market. The Bank Group will also review its relations with African development institutions to determine how best we can work together towards our common goal. The relationship between the African Development Bank and FAO and regional member countries is a longstanding one that dates back to the establishment of the Bank. The Bank appreciates FAO s efforts to back up technically and train our countries in modern agricultural development matters, and in providing policy advice to African agricultural institutions. I am confident that in the years to come our partnership will grow and that we will be able to help our countries meet the important challenges ahead. In this way, we can help them take their rightful place in the rapidly changing world economy. 272