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16/10/2009

New study analyses aid support to the Sub-Saharan Africa agriculture sector

A new study has been published by the FAO Investment Centre that examines the situation of financial support to agricultural development in Sub-Saharan Africa. The research was undertaken in view of recent renewed commitments to increase aid to Africa within the framework of the Comprehensive Africa Agriculture Development Programme (CAADP).

The discussion paper, entitled: “Rapid Assessment of Aid Flows for Agricultural Development in Sub-Saharan Africa,” was originated by FAO as a contribution to the United Nations Millennium Development Goals Steering Group and its MDG-Africa Thematic Group on Agriculture and Food Security. The purpose was to assess the flow of external financing earmarked for agriculture in Sub-Saharan Africa from both official and non-official financiers. While there has been broad agreement by development partners on the need to scale-up their external assistance to agriculture from current levels, information had been lacking on the overall magnitude of current financing levels for agricultural development.

The paper provides a preliminary assessment of the flow of aid to agricultural development in Sub-Saharan Africa, using data on Official Development Assistance (ODA) collected from the Organisation for Economic Co-operation and Development (OECD) databases, major bilateral and multilateral financing agencies, and two private foundations active in the agriculture sector. Its findings note that trends in ODA show a long-term decline in agricultural ODA to Sub-Saharan Africa. In recent years, however, ODA to the agriculture sector has increased and there has been more financing for agriculture than usually assumed when aid flows from private foundations are included. The paper highlights the need for: balancing short-term food security interventions with long productivity investments; better aid harmonization due to numerous donors in the sector, and the potential problem of absorptive capacity due to low disbursement rates by aid recipients.

The paper was prepared by Melissa Brown with inputs from colleagues in the FAO Investment Centre and from OECD. It can be downloaded from: Rapid Assessment of Aid Flows for Agricultural Development in Sub-Saharan Africa.