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Identifying Opportunities for Climate-Smart Agriculture Investments in Africa

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Identifying Opportunities for Climate-Smart Agriculture Investments in Africa Identifying Opportunities for Climate-Smart Agriculture Investments in Africa by Giacomo Branca, Timm Tennigkeit, Wendy Mann, Leslie Lipper with contributions from Rym Benzid, Paul Borsy, Yamina Cherrou, Alberta Mascaretti, Hermann Pfeiffer, Julia Seevinck, Garry Smith, Andreas Wilkes, Johannes Woelcke FAO & World Bank Final report September 2011 1 Table of Contents Abbreviations and acronyms ............................................................................................ 4 Executive summary .......................................................................................................... 5 1. Introduction ................................................................................................................. 6 1.1 The context ................................................................................................................................... 6 1.2 The paper ...................................................................................................................................... 9 2. The analytical framework for Climate-smart agriculture .............................................. 10 2.1 Climate-Smart Agriculture and development ............................................................................. 10 2.2 Adaptation .................................................................................................................................. 11 2.3 Mitigation .................................................................................................................................... 12 3. Agriculture investment needs and options for climate-smart agriculture financing in Africa ............................................................................................................................. 16 3.1. Agricultural investment needs and barriers .............................................................................. 16 3.2 Available financing instruments in the agricultural sector ......................................................... 18 3.3. Climate investment needs and financing instruments in the agricultural sector ...................... 19 3.4. Climate-smart agriculture and potential role of climate financing in Africa ............................. 21 4. A methodology to identify climate-smart activities in CAADP investment plans ........... 22 4.1 Proposed phases for identification of CSA investments potential in CAADP countries ............. 22 4.2 Detailed methodology for phase 1 (screening) .......................................................................... 23 5. Preliminary results from the screening of Agricultural Investment Plans ...................... 26 6. Discussion of the results ............................................................................................. 31 6.1 Potential climate benefits of NAIP programs ............................................................................. 31 6.2 Investment readiness for Climate-smart agriculture in screened NAIPs .................................... 32 6.3 Linking NAIPs with financing sources .......................................................................................... 33 6.4 The way forward ......................................................................................................................... 34 7. References .................................................................................................................. 36 8. Annexes: Results from the Climate-smart Agriculture Screening of the National Agricultural Investment Plans. Country profiles in alphabetical order .............................. 39 8.1. Benin ....................................................................................................................... 40 8.2. Ethiopia ................................................................................................................... 47 8.3. Gambia .................................................................................................................... 51 8.4 Ghana ....................................................................................................................... 56 8.5 Kenya ....................................................................................................................... 60 2 8.6 Liberia ...................................................................................................................... 64 8.7 Malawi ..................................................................................................................... 68 8.8 Niger ........................................................................................................................ 73 8.9 Nigeria ...................................................................................................................... 78 8.10 Rwanda .................................................................................................................. 82 8.11 Senegal ................................................................................................................... 86 8.12 Sierra Leone ............................................................................................................ 90 8.13 Togo ....................................................................................................................... 94 8.14 Uganda ................................................................................................................... 99 3 Abbreviations and acronyms AU African Union A-SWAp Agriculture Sector-Wide Approach CAADP Comprehensive Africa Agriculture Development Program C Carbon CH4 Methane CO2 Carbon Dioxide CO2e Carbon Dioxide Equivalent CSA Climate-Smart Agriculture CDM Clean Development Mechanism COP Conference of the Parties CSIF Country Sustainable land management Investment Framework EAP Environmental Action Plan EU European Union FAO Food and Agriculture Organization of the United Nations FDI Foreign Direct Investments GAFSP Global Agriculture and Food Security Program GCF Gross Capital Formation GDP Gross Domestic Product GEF Global Environment Facility GHG Green House Gas IPCC Intergovernmental Panel on Climate Change LCA Life Cycle Analysis LDC Least Developed Countries MDGs Millennium Development Goals Mt Million tons MRV Measuring, Reporting and Verification NAIPs National Agriculture and Food Security Investment Plans NAPA National Adaptation Program of Action N2O Nitrous Oxide ODA Official Development Assistance OECD-DAC Development Assistance Committee of the Organization for Economic Co-operation and Development REDD Reduction of Emissions from Deforestation and Forest Degradation SSA Sub-Saharan Africa SBSTA Subsidiary Body on Scientific, Technical and Technological Advice UNFCCC UN Framework Convention on Climate Change 4 Executive summary The agricultural sector in Africa is called to increase food production in order to meet food demand for a growing population. This formidable challenge will be further exacerbated by climate change which will have significant impacts on the different dimensions and determinants of food security. African policymakers are thus challenged to ensure that agriculture contributes to addressing food security, development and climate change. National Agriculture and Food Security Investment Plans (NAIPs) - prepared by a number of African countries within the AU-NEPAD Comprehensive Africa Agriculture Development Program (CAADP) - provide the opportunity to integrate into an existing continentally and country-owned sustainable agriculture development framework the up-scaling of practices that potentially benefit development, food security and climate change adaptation and mitigation. This paper proposes a methodology to examine the potential of existing NAIPs to generate climate change benefits. A rapid screening methodology is presented and applied to 14 CAADP NAIPs. All investment plans screened include agricultural development programs/sub-programs that benefit both adaptation to slow-onset climatic change and extreme events, and climate change mitigation: on average about 60% of the activities planned are expected to generate climate benefits in terms of slow-onset climate change, 18% adaptation to extreme events and 19% climate change mitigation. 5 1. Introduction 1.1 The context Africa's population has just passed 1 billion and is due to double by 2050. FAO estimated that Sub-Saharan Africa remains the region with the highest proportion of undernourished people in the population (30% in 2010), compared with a 16% average for developing countries (FAO, 2011a). FAO (2009c) estimated that Africa will need to provide adequate food supplies for more than 20 million additional people each year and improve the nutritional status of the more than 239 million people currently undernourished. This is equivalent to achieving a 4.6% growth in food supplies. Thus increasing food production will be an important part of addressing food insecurity in the 21st century in Africa. Agriculture constitutes the mainstay of most African economies. It is frequently the largest contributor to GDP and about two-thirds of manufacturing value-added is based on agricultural raw materials. Agriculture is also a main source of employment, remaining essential for pro-poor economic growth in most African countries, as rural areas support around 70-80% of the total population. Despite increasing urbanization, Africa’s poorest households are rural and smallholder agriculture remains essential for
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