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The ECOWAS Commissioner for Economic Affairs and Agriculture, Dr Kalilou Sylla, has called for the development of innovative measures to reduce investment risk and encourage investors in agriculture in West Africa.
He explained that agriculture was one of the most difficult sectors to attract investment due to climate-related risks, price fluctuations and perceptions that it was more of a social welfare activity than a profitable business.
Dr Sylla was speaking at a Partners Dialogue on Advancing West Africa Rice Financing in Accra, organised by AGRA, in collaboration with the Economic Commission of West African States (ECOWAS).
It was on the theme, “Unlocking West Africa’s Agricultural Investment Future”.
To address the investment challenge, he urged African countries to learn from innovative measures adopted by Nigeria, where government-supported insurance schemes helped to protect banks against potential losses, and additional risk-mitigation funds established by the central bank increased investment into the agriculture sector.
“Nigeria succeeded because it established mechanisms that reduced risk. When the risk goes down, people invest,” he said.
Banks
Dr Sylla indicated that banks often hesitated to lend to agricultural enterprises because they lacked adequate knowledge of farming systems and agricultural value chains.
He, therefore, called for the creation of a comprehensive agricultural investment ecosystem involving governments, insurers, financial institutions, farmers and private investors to provide policy support, insurance coverage, risk-sharing instruments and market access opportunities.
The ECOWAS Commissioner further called for a reliable regional market to attract investment into agriculture and transform West Africa’s food systems.
He said investors were more likely to commit resources when they were assured of access to a functioning regional market where goods could move freely and producers could reliably sell their products.
“If you have a secure regional market, it means we have a mechanism to have an agricultural market functioning, an integrated market that helps farmers access markets. An integrated market is one of the key drivers of investment,” he said.
He challenged people’s perception that viewed agriculture as supporting poor communities rather than as a viable business sector capable of generating significant returns.
He explained that the largest investors in African agriculture were farmers themselves who invested their resources in seeds, labour, land preparation and crop diversification to protect themselves against market uncertainties.
He, therefore, urged policymakers and financial institutions to focus on creating an enabling environment that would allow farmers to invest more confidently and productively.
Dr Sylla further stressed the need for effective implementation of existing ECOWAS protocols on trade, investment and the free movement of goods and people.
“We have protocols on investment, free movement and trade.
These protocols should work, but the mechanisms for implementation must function and benefit small farmers,” he said.
The Director for West Africa at AGRA, Natasha K. Quist, speaking on behalf of the President of AGRA, Alice Ruhweza, called for efforts to move beyond investment readiness to actual investment execution.
She called for the need to convert discussions generated through the ECOWAS Rice Observatory into tangible investments, stronger value change and measurable benefits for farmers, businesses and economies across West Africa.
She said that as AGRA marked 20 years of advancing agricultural transformation across the continent, the focus must now shift to unlocking the next phase of growth in West Africa through increased investment and improved access to capital.
