The New Alliance For Food Security and Nutrition: Pushing The Frontier of Enlightened

Economic POlicy Paper Series 2013
The New Alliance for Food Security and Nutrition

Pushing the Frontier of Enlightened Capitalism
Jonathan M. White
2013 The German Marshall Fund of the United States. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without permission in writing from the German Marshall Fund of the United States (GMF). Please direct inquiries to: The German Marshall Fund of the United States 1744 R Street, NW Washington, DC 20009 T 1 202 683 2650 F 1 202 265 1662 E info@gmfus.org This publication can be downloaded for free at www.gmfus.org/publications. GMF Paper Series The GMF Paper Series presents research on a variety of transatlantic topics by staff, fellows, and partners of the German Marshall Fund of the United States. The views expressed here are those of the author and do not necessarily represent the views of GMF. Comments from readers are welcome; reply to the mailing address above or by e-mail to info@gmfus.org. About GMF The German Marshall Fund of the United States (GMF) strengthens transatlantic cooperation on regional, national, and global challenges and opportunities in the spirit of the Marshall Plan. GMF does this by supporting individuals and institutions working in the transatlantic sphere, by convening leaders and members of the policy and business communities, by contributing research and analysis on transatlantic topics, and by providing exchange opportunities to foster renewed commitment to the transatlantic relationship. In addition, GMF supports a number of initiatives to strengthen democracies. Founded in 1972 as a non-partisan, non-profit organization through a gift from Germany as a permanent memorial to Marshall Plan assistance, GMF maintains a strong presence on both sides of the Atlantic. In addition to its headquarters in Washington, DC, GMF has offices in Berlin, Paris, Brussels, Belgrade, Ankara, Bucharest, Warsaw, and Tunis. GMF also has smaller representations in Bratislava, Turin, and Stockholm. About GMFs Economic Policy Program The Economic Policy Program is an initiative of GMF dedicated to promoting cooperation between the United States and Europe on domestic and international economic policies as vital instruments of global prosperity, especially for the poor and those affected by shifts in the global economy. The United States and Europe account for more than 40 percent of world economic activity, close to $20 trillion in goods and services on an annual basis. Given the size and importance of this relationship, GMFs Economic Policy Program seeks to ensure that the benefits of globalization are distributed equitably and fairly. Through in-depth research, targeted grantmaking, strategic convening, and outreach to key policymakers and the media, the program supports transatlantic leadership at the critical nexus of economic policy, trade, development assistance, and management of domestic sectors such as agriculture. On the cover: Market in Yaounde, Cameroon in 2011. Jose Antonio Santiso Fernndez

Pushing the Frontier of Enlightened Capitalism
Economic Policy Paper Series April 2013
By Jonathan M. White1
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Africa Moves Beyond Permanent Crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 The New Alliance and Country Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . 11 The New Alliance and Public-Private Partnerships . . . . . . . . . . . . . . . . . . . . . .18 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
Jonathan M. White is a transatlantic fellow with The German Marshall Fund of the United States in Washington, DC.
Executive Summary
t the May 2012 G8 Summit at Camp David, global leaders launched the New Alliance for Food Security and Nutrition. The Alliance seeks to lift 50 million people out of poverty in ten years by aligning local country plans, private sector investments, and G8 government commitments behind agriculture and nutrition in Africa. During the summit, U.S. President Obama announced that 45 local and multinational companies had pledged more than $3 billion for African agriculture. This was a major milestone in efforts to coordinate both public and private resources toward addressing global poverty and pushes the frontier of enlightened capitalism. As Africa experiences unprecedented economic growth and an emerging middle class, the Alliance holds great promise, but also faces significant challenges. Three major trends underpin the New Alliance. First, the growing recognition that food security is critical to economic growth and poverty alleviation; Second, the increasing belief that sustainable development cannot occur without country ownership where the country sets its development priorities and donors align to local country plans; and Third, the greater focus on public-private partnerships (PPPs), which are viewed as a means to leveraging private sector resources and expertise for development and ensuring aid translates into enduring economic growth. Both country ownership and public-private partnerships are considered key elements of the New Alliances efforts to foster a policy enabling environment and incentivize private investment. This paper will examine how the New Alliance seeks to combine country ownership and public-
private partnerships in order to accelerate agriculture development in Africa and push the frontier of enlightened capitalism. The stage has been set for the New Alliance to achieve this. Since 2000, the continent has made unprecedented progress on both increasing macroeconomic stability and investments and making strong policy commitments by African leaders under the Comprehensive Africa Agriculture Development Programme (CAADP). Companies like SABMiller, Nestle, and Wal-Mart are being joined by Africanbased companies that are expanding their operations in anticipation of a growing vibrant African consumer market. There are signs that the continent could be digging its way out of the natural resource trap as investments diversify. Africa is moving beyond the perception that it will be stuck forever in permanent crisis. There is no doubt that Africa has taken a substantial turn in a new direction, particularly in a few countries. But these positive trends have not translated into the expected reductions in poverty. Recognizing that growth in the agriculture sector can reduce poverty at least twice as fast as other sectors, the New Alliance provides well-structured frameworks for governments, the private sector, and donors but also civil society to concentrate their efforts in a systematic way on agriculture. Two key defining elements of the New Alliance country ownership and PPPs are vital to the success of this endeavor. The New Alliance advances country ownership by having donors, private sector investors, and governments align resources to CAADP investment plans. It takes country ownership a step further by actively inviting domestic and international companies to forge public-private partnerships and catalyze commercial agriculture that links to smallholder farmers, including women. With over $3 billion in private sector commitments combined with donor funding and host-country resources, the
New Alliance will test the limits of enlightened capitalism. There are concerns that as donors and African governments embrace PPPs, the voice of local communities and farmers will be marginalized and in effect undermine country ownership. There is heightened attention on land grabs in Africa resource-driven investments that are viewed as having limited or even a negative development impact. Some have gone so far to suggest that the New Alliance represents a multinational corporation takeover of foreign assistance. However, under the New Alliance, PPPs are intentionally designed to support governance and better land management, include local communities and farmers, and enable country ownership. The notion that the New Alliance represents a multinational corporation takeover of foreign aid does not seem to be an accurate characterization of this initiative. Nonetheless, country ownership and PPPs under the New Alliance present a number of potential challenges that policymakers and business and civil society leaders need to consider. Based on the Paris Monitoring Survey, most New Alliance countries have national development strategies driven by country-wide consultations that set priorities and are linked to budgets. They all have established CAADP investment plans that will guide New Alliance public and private resources. Performance has been mixed though. These countries suffer from a variety of constraints in exercising leadership that will impact the outcomes of the New Alliance. Among the leading challenges are weak consultations in land transactions and district-levels civil society. There are inconsistencies between strategies and policies at the national level on one hand and the sector level on the other. For instance, even if donors and businesses align with Burkina Fasos Rural Sector National Programme, for example, the lack of alignment between the
countrys broader national strategy and sectorlevel strategies and budgets will hinder progress. Slow progress on gender will likely blunt the New Alliances efforts as well. PPPs offer the potential to unlock increasing private sector flows and the dynamic power of markets to reduce poverty. They are viewed as an innovative form of enlightened capitalism where foreign aid agencies partner with businesses to catalyze markets to reach the poor. These partnerships seek to marry the comparative advantages of donors and companies in a synergistic way. Evidence from Malawi, Ethiopia, and Tanzania reveals that PPPs can connect rural smallholder farmers to markets through, for instance, contract farming and benefit-sharing models. By integrating into value chains, smallholder farmers and producers can gain income security and other important benefits. Based on these examples, PPPs are compatible with and can even reflect strong country ownership of the development process. In the case of the Southern Agricultural Growth Corridor of Tanzania (SAGCOT), this partnership is central to the countrys agriculture plan and involves the highest level officials in government, relevant ministries, non-state actors, and donors. Nevertheless, there are ownership gaps in PPPs that could lead to problems either at the local, sector, or national levels. For instance, the energy and policy momentum gathered behind SAGCOT at international level and high levels in the government need to extend more deeply to include local public and private actors in the corridor. The success or failure of PPPs will in fact depend on country ownership capacity. If a country has well-established strategic planning, policy, and budgeting processes at the national and sector levels and a leadership that is capable and willing to engage with a wide range of stakeholders, this creates an environment where private actors can better understand and have more confidence in the
New Alliance countries suffer from a variety of constraints in exercising leadership that will impact the outcomes of the agreement.
The German Marshall Fund of the United States
rules of the road, so to speak. If a country has weak country ownership where national macroeconomic policies run-counter to sector-specific agriculture plans, then New Alliance PPPs will have difficulty scaling up. Studies do show that smallholder farmers and producers benefit from integration into value chains. However, their ability to participate in and benefit from PPPs will depend on producer assets, social capital, and proximity to infrastructure, such as roads. PPPs will not be a substitute for traditional safety net programs in New Alliance countries. The lack of trust and understanding between the public and private sectors is another major challenge, which is exacerbated by corruption. Despite the improved business climate in Africa, agriculture suffers from government interventions that create uncertainty at all levels discouraging investment. G8, African, development, and business leaders will have to effectively navigate these pitfalls associated with country ownership and PPPs as they advance the New Alliance. Reporting and transparency at all levels will be essential to helping address these pitfalls. Specifically, the New Alliance dialogues at the country-level, the CAADP-donor Joint Sector Review process, and the reviews by the Leadership Council and at the G8 Summit in 2013 will play important roles in oversight. New Alliance Cooperation Frameworks outline concrete policy reform commitments and timelines that are intended to spur private sector investment. These dialogues, particularly at the country level, could bring together the right combination of actors from the public and private sectors to spark a virtuous cycle of policy reforms, investments, economic growth, and poverty reduction resulting in ever-expanding agriculture transformation and development benefits. As outlined in the work of the Transatlantic Experts Group on Food Security in Africa, a German
Marshall Fund-led initiative, transformational partnerships share several characteristics. They take a holistic approach, adopting either a value chain or corridor framework. Through a value chain framework including the provision of varietal seeds, access to capital, farming/ husbandry techniques, value-added processing, transport, marketing, and trade partners can focus their efforts on the specific constraints to economic growth. This allows public and private sector partners to engage in problem-solving in a practical way. Among the other characteristics Experts Group members viewed as necessary for transformation were the need to create positive synergies among partners, stakeholders, and beneficiaries and leverage complementary competencies and resources from all partners.1 These dialogues will have to build trust and understanding among partners and allow for stepwise change, but they will ultimately have to be transaction-oriented to demonstrate success. By demonstrating success in specific value chains or agriculture clusters, New Alliance partnerships could boost investor confidence and in turn crowdin other domestic or international agriculture investments. If underpinned by solid national development strategies and CAADP plans that anchor expectations about the direction of policy, these partnerships could have positive impacts that extend outside the immediate partners. Enlightened capitalism could unleash transformational partnerships that have cascading benefits strengthening the economy, society, and governance more widely. If that happens, the concept will mean more than launching PPP pilot projects. It will shape the next generation of development efforts that result in agriculture
George Carner, Kathryn Ritterspach Thulin, Jonathan M. White, and Mark Allegrini, Transformational Partnerships: Innovative Approaches to Addressing Food Security in Africa (Washington DC: GMF) April 2012
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Enlightened capitalism could unleash transformational partnerships that have cascading benefits strengthening the economy, society, and governance more widely.
transformation in Africa. It will aggregate input suppliers (fertilizers, seeds, and agrochemicals), financial institutions, logistics and transportation companies, business services, commercial farmers, and others along the value chains of food, feed, fiber, and beverage crops. It will include staple
crops such as maize, rice, and wheat as well as livestock, cotton, cashew, nuts, pulses, and vegetables, creating a diverse agriculture sector linked to Africas booming consumer market and to the other positive economic forces at work on the continent.
Recommendations
Enabling Country Ownership New Alliance donors and private sector partners must fulfill commitments to align with national strategies (i.e. CAADP plans) in order to reinforce local accountability and strengthening country ownership. Reporting and oversight by all partners under the New Alliance must address specific ownership pitfalls such as land, gender, weak consultation, and poor links between national and sector strategies, among others, in a targeted way in each country (see Paris Monitoring Survey). Land governance is the weakest link in New Alliance country ownership, potentially threatening support for private sector engagement, and requires prioritizing the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries, and Forests in the Context of National Food Security and the Principles for Responsible Agricultural Investment.2 Although PPPs can come in a variety of sizes and involve a number of different public and private actors, New Alliance PPP design should guard against ownership gaps at either the local or national levels. New Alliance commitments to improving data collection for land and water management, seeds, trade, nutrition, taxes, and market information systems must be fulfilled in order to reinforce reporting and oversight as well as assist countries in formulating evidence-based policies, consulting with stakeholders, and leading on national and sector strategies.
Enabling Transformational Partnerships New Alliance partners need to link their agriculture investments to Africas emerging middle class consumer, a key driver of the continents future economic growth. Effectively leveraging public and private resources through New Alliance PPPs will necessitate a clear division of labor among partners that outlines roles and responsibilities under a common vision. Lessons from value chain and benefitsharing models should guide New Alliance PPPs as they show evidence of generating positive development outcomes, allow for practical problem-solving, and create positive synergies among partners, stakeholders and beneficiaries. Graduation from subsistence farming to commercial farming or non-farming livelihoods cannot be achieved by PPPs alone, and other workable models will be required that can extend opportunities through traditional safety net and other rural development programs, taking a differentiated approach. Agriculture value chain PPP feasibility and design must consider the assets of smallholder farmers their productive capital, access to credit, infrastructure, irrigation, or storage facilities as well as social capital (e.g. participation in associations or cooperatives) in order to determine the potential for value chain integration and outcomes (e.g. incomes, learning, and the adoption of technology and management skills). Due diligence is not limited to evaluating smallholder assets, and all partners, including governments, donors, NGOs, and companies,
Lessons from value chain and benefitsharing models should guide New Alliance PPPs as they show evidence of generating positive development outcomes, allow for practical problem-solving, and create positive synergies among partners, stakeholders and beneficiaries.
Note that the Principles for Responsible Agricultural Investment are not yet complete.
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must determine upfront their respective capacities to deliver on the partnership. A culture of learning and adaption must be shared among all partners, recognizing that no one partner is exempt from failure, as this will allow for adjustments to specific and evolving country and community contexts. Enabling Accountable Reforms New Alliance countries should consider leading dialogues, making policy reforms and establishing credibility in a few key value chains, corridors, or zones where near-term progress can be achieved and corruption mitigated. Ownership under New Alliance dialogues requires public and private exchanges that are meaningful, transaction-oriented, and build trust in order to advance public policy actions
that increase investor confidence and trigger agriculture investments that raise incomes for agribusiness but also rural communities. The New Alliances mutual accountability, bolstered by host-country leadership, CAADP-donor Joint Sector Reviews and the G8 Leadership Council, should track policy action commitments with the aim of creating a virtuous cycle of reforms, investments, economic growth, and poverty reduction resulting in ever-expanding agriculture transformation and development benefits. The New Alliance gains from high-level buy-in from Leadership Council dialogues, but should also leverage local NGOs and associations that can play a constructive role by offering a platform for dialogue and intermediation between the public and private sectors in New Alliance countries.
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Africa Moves Beyond Permanent Crisis
ince independence, African countries have been receiving foreign assistance to overcome balance of payments problems, build infrastructure, improve health and education, and create the conditions for economic growth. The United States, Europe, and other donors have provided foreign aid both bilateral and multilateral through institutions such as the World Bank and the International Monetary Fund with the intent to kick-start development. African countries in turn committed to structural adjustment programs and reforms. In many cases, the spread of democracy and the opening up of these societies allowed for multiparty elections, a freer press, and the development of civic associations. Still, Africas economic performance lagged behind the rest of the world and democratic advances were in question. There was a growing sense that the continent was bound to suffer from permanent crisis continuously turning to the international community again and again for relief from some financial calamity or humanitarian disaster. Some pointed to the failure of African governments to implement reforms. Others found fault with structural adjustment policies required by donors. A number of scholars have made the case that elites co-opted the reform process, where they only made enough changes to satisfy donors while maintaining the reins of economic and political power through clientalistic relationships.3 All these factors likely reinforced the perception that Africa is dominated by conflict, political upheaval, corruption, weak economic growth, famine, and endemic poverty. Since 2000, however, the continent has enjoyed an unprecedented period of economic growth, macroeconomic stability, and improved
Nicolas van de Walle, African Economies and the Politics of Permanent Crisis 1979-1999 (New York: Cambridge University Press) 2001
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governance, which marks a break with the past.4 Policies adopted in the 1980s-90s have begun to bear fruit: stabilizing inflation, making deficits more sustainable, attracting more investment, and creating opportunities for the private sector. Save the global recession and food crisis of 2008-2010, Africa has benefited from a notable period of economic expansion. Between 1990 and 1999, the gross national income per capita of sub-Saharan Africa grew by 17 percent, while between 2000 and 2009 it jumped by 58 percent.5 Foreign direct investment (FDI) to the region jumped from $6.8 billion in 2000 to a sizeable $37 billion in 2011.6 Astonishingly, seven of the ten worlds fastestgrowing economies are expected to be in Africa between 2011 and 2015.7 This has been coupled with improvements in human development indicators. In sub-Saharan Africa, secondary-school enrollment increased by 48 percent between 2000 and 2008. In some of the most acutely affected countries, malaria deaths have dropped by 30 percent and HIV infections have declined by as much as 74 percent. Across the continent, life expectancy has increased by 10 percent and child mortality in most countries has dropped considerably.8 While these trends are not completely uniform across the continent, a number of African countries are definitively challenging the notion that Africa will forever remain in crisis.9
Seven of the ten worlds fastest-growing economies are expected to be in Africa between 2011 and 2015.
Xinshen Diao, James Thurlow, Samuel Benin, and Shenggen Fan, Strategies and Priorities for African Agriculture (Washington DC: International Food Policy Research Institute) 2012
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Africa Development Indicators, World Bank, 2011 UNCTAD
The Economist and the International Monetary Fund. These countries include Ethiopia, Mozambique, Tanzania, Congo, Ghana, Zambia, and Nigeria. The Economist, March 2-8, 2013. Steve Radelet, Emerging Africa: How 17 Countries are Leading the Way (Washington DC: Center for Global Development) 2010
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Figure 1. FDI as a Share of GDP for African oil exporters and oil importers1
6 Oil Exporting (%) 5 Oil Importing (%)
% GDP
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Africa Economic Outlook 2012. See UNCTAD; WIR, IMF WEO for 2011 estimates and 2012 forecasts
Africas Emerging Middle Class will be a Market Driver As incomes rise, African households are entering the middle class. Between 2000 and 2010, the share of Africas population living in the middle class increased from 27 percent to 34 percent, amounting to 326 million consumers.10 Annual consumer spending will increase from $680 million in 2008 to $2.2 trillion in 2030 as most African countries gain a middle class majority.11 This has not gone unnoticed by global companies. SABMiller, the worlds second-largest beer maker, is planning to invest $2.5 billion over the next five years to build and revamp breweries across the continent.
African Development Bank, Middle of the Pyramid: Dynamics of the Middle Class in Africa, Marketing Brief April 20, 2011. 11 Africa in 50 Years Time: The Road Toward Inclusive Growth (Tunis, Tunisia: African Development Bank) September 2011. Although the emergence of Africas middle class is a clear trend, it is not happening everywhere. Fragile and conflict states remain a real challenge in some parts of Africa.
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Investments by Nestle, the worlds largest food company, were expected to reach $1 billion in 2011 and 2012. The company already has 29 factories in Africa and expects to build more. Wal-Mart acquired South African-based Massmart Holdings for $2.4 billion and that company anticipates regional market opportunities. African firms are also on the move. The number of FDI projects in Africa has doubled from 2003 to 2011 in large part the result of a take-off in intra-African FDI with Nigerian, South African, and Kenyan companies expanding operations regionally.12 The well-known natural resource trap could be loosening its grip on African countries. There is greater diversification of foreign investments away from extractive industries toward telecommunications, banking, and other
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Ernst & Young, Africa Attractiveness Survey 2012
non-resource sectors.13 Since 2010, oil-importing countries have received more FDI as a share of GDP than oil-exporting countries in Africa (see Figure 1).14 While there are major barriers to trade and investment due to poor infrastructure, this is changing. The new Eastern Africa Submarine Cable System allows 21 African countries to gain broadband connectivity, accelerating economic growth and development. Mobile network operators, financial institutions, platform providers, and technology developers are benefiting from expansion of mobile money and services. At the same time, mobile technology allows rural farmers low-cost access to commodity prices, market information, and financial services, helping them move out of the informal economy. Policy Commitments Set the Stage for Agriculture Transformation African leadership has helped to set the stage for these developments. Governments have moved to improve the business climate by reducing the number of days, procedures, and initial capital required to start a business.15 Several countries have launched efforts to institutionalize interaction between businesses and public authorities by creating a single point for handling construction permits and other business start-up needs. In this more investment-friendly environment, companies like Ecobank, an African financial services firm, have more clients. It has an established global footprint of 20,000 employees operating 1,400 branches in Africa, the Middle East, and Europe. Along with Wal-Mart and other global companies, Ecobank is moving into Africas retail market. With less than 20 percent of the continent having access to banking services, this offers a
The Africa Competitiveness Report 2011, World Economic Forum, the World Bank and the African Development Bank, 2011 14 Africa Economic Outlook 2012. See UNCTAD; WIR, IMF WEO for 2011 estimates and 2012 forecasts 15 Doing Business 2012, World Bank
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tremendous opportunity to accelerate employment, empowerment, and development. In 2001, African leaders established the New Partnership for Africas Development (NEPAD), committing themselves to eradicating poverty and ending the continents exclusion from the global economy. NEPAD recognized the limited progress achieved at the turn of the millennium and the need to break aid dependency. In 2003, African leaders formed the Comprehensive Africa Agriculture Development Programme (CAADP) under NEPAD. CAADP seeks to increase food security, nutrition, and incomes among Africas largely farm-based economies. Under it, African leaders pledged to raise agriculture productivity by 6 percent and allocate 10 percent of their national budgets to the sector. Importantly, these commitments represent African leaders taking ownership and being held accountable in a public way for setting and implementing these policies.16 Economic growth has reduced poverty in Africa, but these gains have been limited. The link between economic growth and poverty reduction is weaker in Africa compared to other regions.17 Many consider agriculture the solution to this problem. There is evidence that gross domestic product (GDP) growth in agriculture reduces poverty at least twice as fast as growth in other sectors.18 The bulk of Africas poor live in rural communities with incomes linked to agriculture or related activities. Food production, access, and utilization will be a catalytic factor in continents development. These facts, plus the recent food crises, have galvanized
While the intent was to have governments be held accountable in a more public way for these agriculture commitments under NEPAD monitoring and evaluation, progress on these specific targets has been slow. 17 African Development Bank, African Economic & Financial Brief, Marketing Brief, Volume 3, Issue 09, for the period of Feb 27 Mar 02, 2012 18 World Development Report: Agriculture for Development (Washington DC: World Bank) 2007
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With less than 20 percent of the continent having access to banking services, this offers a tremendous opportunity to accelerate employment, empowerment, and development.
momentum behind the New Alliance for Food Security and Nutrition. If the New Alliance can link farmers to a vibrant emerging middle class consumer in Africa, it would fundamentally change the continent. This is indeed Africas moment. The New Alliance seeks to spark agriculture transformation in Africa by supporting
country-owned national agriculture development plans (e.g. CAADP investment plans) and by encouraging public-private partnerships or PPPs. The following sections will examine the viability of country ownership and PPPs in the context of the New Alliance.
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The New Alliance and Country Ownership

president or key ministries. By consulting more broadly with other parts of the government, business, and civil society, including the media, development policies and resources will help reinforce local accountability and not undermine it. As mentioned, narrow elites holding economic and political power have been associated with policies resulting in the so-called permanent crisis on the continent. Greater accountability helps address this problem. This is an important part of the logic behind country ownership. The U.S. government has been pursuing country ownership for several years. Its a principle supported by both Republican and Democratic presidents. Under President George W. Bush, the Millennium Challenge Corporation (MCC) was founded on the principle of country ownership. The MCC has been advancing country ownership in practice for nearly a decade through its country compacts. According to the MCC, partner countries exercise ownership when, in close consultation with citizens, governments take the lead in setting priorities for MCC investments, implementing MCC-funded programs, and being accountable to domestic stakeholders for both making decisions and achieving results. 21 Under President Barack Obama, country ownership has been endorsed in the first U.S. Quadrennial Diplomacy and Development Review and the Presidential Policy Directive on Global Development. The U.S. Agency for International Development (USAID) has reinstated the practice of multiyear country strategies and launched the U.S. Feed the Future Initiative to pursue country ownership.22 This initiatives recent progress
Sarah T. Lucas, MCC Principles into Practice: Country Ownership (Washington DC: MCC) November 2011
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ver the past decade, country ownership has gained acceptance as being necessary for achieving sustainable development. The origins of the concept can be traced to IMF and World Bank studies that revealed a statistically positive relationship between the degree to which a country government was committed to a project (i.e. buys into the project) and the success of that project.19 Defined more broadly, ownership means the country the government, civil society and private sector have a direct stake in the success of these programs. They must own these programs and be accountable for them. In 2005, the Paris Declaration on Aid Effectiveness committed developed and developing countries alike to a set of principles, including country ownership. Under this international agreement, country ownership is defined as a countrys ability to exercise leadership over their development policies and strategies and coordinate development actions.20 Developing countries agreed to formulating national country strategies, prioritizing results-oriented operational programs, timelines, and budgets, and coordinating with donors, civil society, and the private sector. Donors agreed to respect country partner leadership and help strengthen their capacity to exercise it. In 2008, further commitments were made in Accra with pledges by donors to make greater use of country systems to deliver aid. Developing countries committed to work more closely with their parliaments and local authorities in designing and implementing national strategies. This reflects the growing belief that country ownership should extend beyond the executive branch of government. In the past, donors often worked exclusively with executive offices usually the office of the
High Impact Adjustment Lending (HIAL): Initial Evaluation, Operations Evaluation Department, report No. 19797 (Washington DC: World Bank) 1999
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By consulting more broadly with other parts of the government, business, and civil society, including the media, development policies and resources will help reinforce local accountability and not undermine it.
Paris Declaration on Aid Effectiveness, 2005
The U.S. Feed the Future Initiative includes a greater focus of investment in value chains and geographical areas offering the greatest potential for alleviating hunger and poverty as well as efforts to address nutrition, gender, monitoring and evaluation and transparency.
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When global leaders launched the New Alliance for Food Security and Nutrition at the 2012 Camp David G8 Summit, country ownership remained a key element of this effort and expanded the partnership to actively include the private sector.
report states that donors can achieve more effective and lasting results when they champion the development visions and efforts of partner countries own governments and citizens and further states that the African Unions New Partnership for Africas Development, for instance, has developed the CAADP, committing the peerreviewed strategies and target budgets. Feed the Future, by design, aligns U.S. government resources and activities behind these country-led efforts in Africa and elsewhere.23 In support of country ownership, USAID has also collaborated with several countries to jointly produce constraints to growth analysis. Known as Partnership for Growth, this process includes representatives from the U.S. government including a number of agencies as well as counterparts from the host-government. It seeks to determine the barriers to economic growth in order to effectively prioritize policy activities and resources. USAID has also been pursuing efforts to program resources locally using governments or local implementers under USAID Forward. In August 2011, USAID introduced policy directives and required procedures for determining the suitability of using partner country systems (e.g. public financial management or PFM systems). These directives state that USAIDs assistance is most effective when it can work through partner country PFM systems rather than around them, to ensure that the aid received maintains the accountability of a government to its peopleUse of partner country systems is just one approach of many available for delivery of assistance. It can be combined with USAID support for local non-governmental and private organizations, traditional USAID contractors and grantees, and other methods to
achieve development objectives.24 Over the past two years, the agency has doubled the amount of mission funding invested in local governments, businesses and NGOs.25 Alliance Partners Seek to Operationalize Ownership In 2009, the G8 LAquila Food Security Initiative (AFSI) committed donors to investing $22 billion in agriculture and upholding the Rome Principles.26 It embraced country ownership and a more comprehensive approach to boosting agriculture productivity. When global leaders launched the New Alliance for Food Security and Nutrition at the 2012 Camp David G8 Summit, country ownership remained a key element of this effort and expanded the partnership to actively include the private sector. So far country ownership under the New Alliance has emerged through planning meetings that have included the private sector, civil society, donors, and government officials. These dialogues have sought to bring New Alliance commitments by donors and the private sector into line with country plans, processes and institutions, specifically with CAADP investment plans already underway. These meetings have addressed issues related to creating an enabling environment for these investments, improving coordination, and establishing country
ADS Chapter 220 Use of Reliable Partner Country Systems for Direct Management and Implementation of Assistance Chapter Issuance Date: 08/16/2011
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USAID Forward Progress Report 2013
Feed the Future Progress Report: Boosting Harvests, Fighting Poverty (Washington DC: USAID) October 2012
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The Rome Principles include 1) invest in country-owned plans; 2) foster strategic coordination at national, regional, and global levels; 3) strive for a comprehensive, twin-track approach to food security that consists of direct action to immediately tackle hunger for the most vulnerable and medium and longterm sustainable agricultural, food security, nutrition and rural development programs; 4) ensure a strong role for the multilateral system; and 5) ensure sustained and substantial commitment by all partners to investment in agriculture and food security and nutrition.
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policy priorities, near term outcomes, and monitoring systems. Based on these dialogues, New Alliance founding partners Ethiopia, Ghana and Tanzania have developed New Alliance Cooperation Frameworks, which describe the vision and outline the mutual commitments of the local government, donors, and businesses. On the sidelines of the UN General Assembly in September 2012, these New Alliance countries, donors, and the private sector partners welcomed three new members Burkina Faso, Cote dIvoire, and Mozambique who also have developed New Alliance Cooperation Frameworks. Each of the six New Alliance Cooperation Frameworks commits G8 donors and private sector partners to support local country agriculture strategies, namely their CAADP plans as follows: Ethiopia: The Agriculture Sector Policy Investment Framework (PIF) Tanzania: The Agriculture and Food Security Investment Plan (TAFSIP) Ghana: The Medium-Term Agriculture Sector Investment Plan (METASIP) Burkina Faso: The Rural Sector National Programme (PNSR) Cte dIvoire: The National Agricultural Investment Program (PNIA) Mozambique: The Plano Nacional de Investimento do Sector Agrrio (PNISA) As mentioned, under the Paris Declaration on Aid Effectiveness, donors agreed to respect partner country leadership and help strengthen their capacity to exercise it. Donors and businesses seek to adhere to this under the New Alliance by aligning their efforts with these country
strategies. But, country ownership also means these countries exercising leadership over their development policies and strategies and coordinating development actions. The New Alliance Cooperation Frameworks list each countrys policy actions to build domestic and international private sector confidence in making agriculture investments. This represents New Alliance countries exercising leadership and country ownership and provides a window of opportunity to link African agriculture to the unprecedented positive economic trends underway on the continent. These policy actions include, for instance, improving stability and transparency in trade policy, efficiency in land management, domestic farm input and seed policies, and access to credit for farmers. New Alliance countries also reaffirmed their intention to commit the human and financial resources and support the mechanisms to facilitate a dialogue with the private sector, farmers, other key stakeholders as well as key government ministries. This kind of dialogue between the public and private sectors is essential for building understanding and trust between these sectors, effectively identifying the barriers to investment, and advancing policy actions that unlock economic growth.27 Moreover, these activities could guard against land grabs and dispel the notion that the New Alliance represents some kind of MNC takeover. New Alliance Countries Face Pitfalls on the Path to Ownership But, how prepared are New Alliance countries to lead such efforts and demonstrate country ownership? The OECDs Survey on Monitoring the Paris Declaration is the leading assessment of
27
But, country ownership also means these countries exercising leadership over their development policies and strategies and coordinating development actions.
13
The role of the media in providing critical analysis on national strategies and policies has been scarce.
progress toward aid effectiveness principles like country ownership. The Survey offers insights on the challenges the New Alliance will face in terms of African countries ability to exercise leadership over their development strategies and coordination development policies with donors and the private sector. Overall, only one of the 13 targets for aid effectiveness was achieved between 2005 and 2010, the target for strengthening capacity by coordinated support. However, the country ownership indicator was not met. Specifically, the Survey assesses whether countries have operational development strategies to gauge country ownership. It measures the extent to which partner countries have national development strategies with clear strategic priorities linked to a medium-term expenditure framework and reflected in annual budgets.28 This indicator is scored based on evidence of three criteria: An authoritative country-wide development policy (i.e. unified strategic framework) A realistic development strategy that clearly identifies priorities Well-costed policies that can be funded (i.e. linked strategies to budget allocations) Globally, the goal for the country ownership indicator was to increase the percentage of countries with operational strategies from 19 percent to 75 percent. By 2010, only 52 percent of countries participating in the survey were scored either an A or B meaning they meet the criteria for having operational development strategies in place. However, most of the New Alliance countries scored either an A or B in 2010. Most of them also showed improvements in their scores (see Figure 2).
Aid Effectiveness 2005-10: Progress in Implementing the Paris Declaration, OECD, 2011
28
Figure 2. The Survey on Monitoring the Paris Declaration: Do countries have operational development strategies? 29 Country Ethiopia Tanzania Ghana 2005 C B C 2007 B B B B N/A C 2010 B A B C N/A B
Burkina Faso C Cte dIvoire N/A Mozambique C
Among the five New Alliance countries that participated in the survey Ethiopia, Tanzania, Ghana, Burkina Faso, and Mozambique all incorporated the Millennium Development Goals into their strategies. To varying degrees, they all engaged in consultations with civil society, the private sector and other government agencies. However, Burkina Fasos score actually dropped below the threshold required to be deemed as having an operational strategy. Due to lack of resources, limited capacity, and regional differences, the countrys national strategy is not sufficiently linked to sector strategies. It does not have a framework that effectively sequences targets in a manner that would allow for achieving them. The countrys strategic priorities are not clearly linked to budgets so that they can be fully realized. In Ethiopia, Ghana, Mozambique, and Tanzania, national strategies are aligned with sector strategies, such as agriculture. Their strategic priorities are connected to budget processes or expenditure frameworks. These countries at a minimum have advanced into a second generation national strategy and so they have reference points to help guide policy and sector planning, budgeting, and monitoring. This experience in preparing and implementing strategies has helped these
29
Survey on Monitoring the Paris Declaration, OECD, 2011
14
countries to perform well on the country ownership indicator. However, even the New Alliances countries that did pass on this indicator were reported as having a number of challenges in achieving country ownership. Engagement with civil society and the private sector needs to be deepened in Ethiopia. While parliament, civil society, and the private sector are involved in national strategy planning in Ghana, capacity for broad consultation at the sector and district levels is limited. In Mozambique, donors are viewed as dominating the policy discussion, having more resources and influence than civil society. Some government officials report that they see donor behavior as undermining the principle of country ownership. The country will need to exert more leadership to create a division of labor among donors and improve coordination.30 The New Alliance countries that participated in the Paris Survey have pursued consultations to varying degrees with civil society, parliaments, and the private sector in preparing their development strategies. However, they all lack a systematic approach to doing this. Participation by non-government actors is viewed as being less robust during the implementation and monitoring stages. The role of the media in providing critical analysis on national strategies and policies has been scarce. While their strategies note the priority of gender equality, often limited human and financial resources have been allocated to this critical development issue.31 Land Represents the Weakest Link in Ownership Although the Paris Survey reveals that most New Alliance countries have made progress on country ownership, the results are mixed. This
30 31
will have implications on the potential success of the New Alliance. For instance, despite the growth in microcredit, most African rural subsistence farmers are women who have limited access to assets like land or the collateral necessary to get a bank loan. Progress on New Alliance policy actions like increasing access to credit for farmers will fall short if gender is not more seriously addressed.32 Even if donors and businesses align with Burkina Fasos Rural Sector National Programme (PNSR), the lack of alignment between the countrys broader national strategy, on one hand, and sector-level strategies and budgets, on the other, will hinder progress. Mozambiques sector strategies are vulnerable to conflicting macroeconomic policies set by national priorities, as reported by the Paris Survey. The capacity of New Alliance countries to exercise country ownership will be especially tested when it comes to land. A flurry of articles, media reports, and NGO campaigns on land grabs has raised concerns about investments in Africa undermining the rights of vulnerable and marginalized citizens. There are fears that such investments will be solely for the production of food for export or biofuels instead of domestic markets. Rising commodity prices and the race to secure natural resources have driven many investors to seek out land in Africa. A number of high-profile transactions have occurred, such as the South Korean firm Daewoo Logistics Corporation purchasing 1.3 million hectares for growing maize and palm oil in Madagascar. China is reported to have acquired 2.8 million hectares in the Democratic Republic of Congo for an oil palm plantation.
In two New Alliance countries, the compensation to households affected by these land investments has been determined to be inadequate that is not sufficient to restore their livelihoods.
Survey on Monitoring the Paris Declaration, OECD, 2011 Ibid.
Based on the Social Institutions and Gender Index (OECD), where only two New Alliance countries ranked in the top 50 Mozambique (39) and Tanzania (47). The remaining ranked lower Cte dIvoire (61), Ethiopia (64), and Burkina Faso (70) out of a total of 86 developing countries.
32
15
PPPs could potentially serve as catalytic vehicles for food security but also for improved governance and country ownership, if well-structured.
According to one study, most of these transactions are intended for speculation, where the land remains idle, or for export or biofuel production rather than local markets.33 In at least four New Alliance countries, there is evidence that land transactions have involved weak consultation between investors and/or governments on one hand and local communities on the other.34 In two New Alliance countries, the compensation to households affected by these land investments has been determined to be inadequate that is not sufficient to restore their livelihoods.35 This is despite that fact that in at least three of the New Alliance countries, there are policies requiring that land transfers be approved by communities that have rights over the land in question and that there must be fair compensation and opportunities for review of the agreements.36 Ultimately, this challenge arises from weak governance and complex land management systems. Often state land ownership, customary ownerships systems, and private land ownership exist alongside each other, making for a confusing regulatory climate in Africa. By some estimates, formal ownership or tenure of land in Africa, at most, accounts for 10 percent of the continents land (mostly in urban areas). New Alliance partner countries are not an exception to this problem. For instance, Tanzania and Ethiopia have stateowned land systems. But they also delegate land management to villages. Seventy percent of all land is under the jurisdiction of 11,000 villages in Tanzania. Land represents the weakest link
Kate Geary, Our Land, Our Lives Time out on the global land rush (United Kingdom: Oxfam GB) October 2012 34 Prosper B. Matondi, Kjell Havnevik, and Atakilte Beyene, Biofuels, Land Grabs, and Food Security in Africa (New York/ London: Zed Books) 2011 35 Lorenzo Cotula, Sonja Vermeulen, Rebeca Leonard and James Keeley, Land Grabs or Development Opportunity? Agriculture Investment and international land deals in Africa (London/Rome: IIED, FAO, and IFAD) 2009
33 36
in country ownership and the greatest threat as such transactions may likely undermine trust and support for private sector engagement in agriculture. This demonstrates how critical improving governance in the land sector will be to country ownership under the New Alliance. Under the Cooperation Frameworks, all partners confirm their intention to take into account the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries, and Forests in the Context of National Food Security and the Principles for Responsible Agricultural Investment.37 These guidelines and principles seek to ensure that local stakeholders materially affected are consulted with during the planning and implementation of investments in a transparent manner. Moreover, some New Alliance countries are improving land management policies and moving forward with land titling programs. Others are adopting contracting and out-grower schemes to increase transparency in the agriculture sector. These schemes seek to bring smallholder farmers into not only a consultative process, but a formal benefit-sharing agreement that includes the provision of technologies, access to credit, and predefined prices and volumes for crops. This is where public-private partnerships begin to play an important role (see below). PPPs could potentially serve as catalytic vehicles for food security but also for improved governance and country ownership, if well-structured. Reporting and Accountability Must Resolve Ownership Pitfalls Are New Alliance countries prepared to lead the way? It will depend on many factors, but how oversight and accountability in the New Alliance
37
Ibid.
See New Alliance Cooperation Frameworks
16
proceed at the global and local levels will be a critical one. This will require monitoring and addressing pitfalls such as land, gender, weak consultation, and poor links between national and sector strategies, among others, in a targeted way. New Alliance Cooperation Frameworks are quite detailed with policy actions linked to timelines for partner countries, specific financial commitments for donors, and private investment intentions for companies that, in some cases, drill down to the project level. A few examples of New Alliance policy commitments offer a glimpse into the level of detail involved. Cte dIvoire committed to implementing its Rural Land Act by demarcating village lands and issuing land tenure certificates by June 2015. In Mozambique, approved regulations governing seed proprietary laws to spur private sector competition for agriculture inputs are expected to be in force by June 2013. Burkina Faso aims to better manage agricultural risks by institutionalizing a system of social safety nets that are adapted to different categories of beneficiaries, testing agricultural insurance schemes (climate insurance, agricultural insurance, etc.), and disseminating the CNSS voluntary insurance scheme and develop social protective schemes that are appropriate for the agricultural sector by December 2013. Ethiopia seeks to develop credit bureaus and enable financial institutions to use warehouse receipts, out-grower contracts, and machinery leasing to increase access to agriculture finance by December 2013.
Reporting, monitoring, and accountability will be further enhanced by the ability of New Alliance countries to strengthen their own data collection and analytical systems. Some of the New Alliance commitments address this. For instance, the New Ghana Agricultural Production Survey (GAPS) will standardize and broaden geographical data coverage for production in key crops. New Alliance commitments offer an opportunity to bolster countries data collection across a range of areas, including land and water management, seeds, trade, nutrition, taxes, and market information systems. With such information, countries will be better positioned to formulate evidence-based policies, consult with stakeholders, and take the lead on national and sector strategies. These commitments are to be tracked by a Leadership Council agreed at the Camp David G8 Summit. It will report to the G8 and the African Union on progress. The on-going CAADP-donor Joint Sector Review process, which monitors progress on CAADP investment plans, is expected to ensure the private sector, G8 donors, and the host government are meeting their obligations under the New Alliance. Reporting and transparency will be vital to dealing with any possible questionable land deals, the rights of the communities in question, and the weaknesses of operational strategies that may hinder country ownership. However, as will be illustrated below, the mutual accountability framework for the New Alliance is still under construction.
17
4
D
Over the past decade, FDI to New Alliance countries has risen from $980 million to nearly $7 billion, which has been primarily driven by Tanzania, Mozambique, and Ghana.
The New Alliance and Public-Private Partnerships

developing world. The globalization of capital and other private resources has fundamentally changed this, and private sector flows far exceed official development assistance (ODA) to the developing world. Since the 1990s, this trend has accelerated. By 2011, total ODA amounted to $134 billion, but was far surpassed by remittances, which totaled $400 billion, and foreign direct investment, which amounted to $777 billion. (See Figure 3. This chart does not include flows from foundations to the developing world which also have been rising in recent years.) As mentioned, starting in 2000, Africa has benefited from increasing macroeconomic stability and investment providing fertile conditions for the New Alliance to spur agriculture in Africa. Along with other developing countries, the amount of FDI to sub-Saharan Africa has risen from $6.8 billion in 2000 to a sizeable $37 billion in 2011. It should be noted that sub-Saharan Africas share of developing world FDI remains very small only about 5 percent. The continent is a long way from fully tapping the power of these global investments to catalyze local markets, entrepreneurs, and job creation. That said, the region continues to attract increasing levels of FDI in tandem with rest of the developing world. Over the past decade, FDI to New Alliance countries has risen from $980 million to nearly $7 billion, which has been primarily driven by Tanzania, Mozambique, and Ghana (see Figure 4).39 New Alliance countries do remain important aid recipients. ODA rose from $2.6 to $6.7 billion from 2000 to 2010 for all six countries.40 Aside from Ghana, ODA exceeds FDI in all the New Alliance countries (see Figure 5). Ethiopia continues to
Upstream petroleum investments had an impact on Ghanas FDI performance. While there are signs that African FDI is diversifying away from natural resources toward other sectors, this is not occurring uniformly.
39 40
uring the G8 Summit in May 2012, President Obama announced that 45 local and multinational companies had pledged more than $3 billion for African agriculture, a major milestone in efforts to coordinate public and private resources toward addressing global poverty. At the United Nations General Assembly in September 2012, USAID Administrator Dr. Rajiv Shah announced that 21 more private-sector companies, mostly African firms, signed letters of intent resulting in an additional $500 million for African agriculture under the Alliance. The U.S. government has been engaging with the private sector on development since the 1970s. In 1971, the U.S. government created the Overseas Private Investment Corporation (OPIC), which seeks to generate economic growth and jobs both at home and abroad. It provides investors with financing, guarantees, political risk insurance, and support for private equity investment funds in order to encourage investment in developing countries. Under President Reagan in the 1980s, there was increased focus on improving the policies that would help private enterprise grow in developing countries. At the end of the Cold War in 1989, USAID launched a number of funds in Central Europe and former Soviet Union to invest in small and medium-sized enterprises (SMEs). These Enterprise Funds combined public funding appropriated by Congress, technical assistance, and private sector fund managers who made investments and loans to promote democracy and free enterprise.38 The rationale for accelerating public-private partnerships is based on the recognition that private sector flows are outpacing official development assistance. In the 1970s, only a few donors dominated the flow of resources to the
Carol Lancaster, Kwaku Nuamah, Matthew Lieber, and Todd Johnson, Foreign Aid and Private Sector Development (Washington DC: Watson institute) 2006
38
OECD
18
Figure 3. Private sector flows (FDI and remittances) and official development assistance (ODA) to the developing world 1991-2011 (billions)1
$1,400
$1,200
$1,000
$800
$600
$400
$200
$1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Official Development Assistance
Remittances
Foreign Direct Investment (FDI)
UNCTAD, World Bank, and OECD
have significant humanitarian needs resulting from drought in the region and over 80 percent of Cte dIvoires aid was attributed to debt relief. Despite FDI flows and economic and social improvements generally, all New Alliance countries continue to be dependent on foreign assistance for education, health, infrastructure, and other forms of technical and humanitarian assistance.41 New Alliance PPPs Offer the Promise of Enlightened Capitalism Public-private partnerships have been used in a variety of contexts for at least two decades. PPPs initially were used by donors like the World Bank and regional banks, as well as some large
41
EU donors, to co-finance and implement large infrastructure projects. These projects helped define and formalize the approach to PPPs. Such PPPs had mixed results. Over the past decade, more innovative approaches have been followed and considerable knowledge has been accumulated on the practice of PPPs. For instance, a decade ago USAID introduced the Global Development Alliance (GDA), which has broadened the definition of PPP. Under GDA, a PPP is where a U.S. development agency works with a private sector entity, with each contributing resources (cash or in-kind) to achieve a shared objective that has significant development
OECD
19
Figure 4. New Alliance FDI inflows 2000-2011 (billions)1

$8 $7 $6 $5 $4 $3 $2 Burkina Faso $1 $2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
1
Ghana Mozambique Tanzania Cte d'Ivoire Ethiopia
UNCTAD
benefits.42 The purpose of these alliances is to link U.S. foreign assistance to increasing private sector flows to the developing world. The innovative GDA model involves at least 1:1 leveraging of resources from the private sector with USAID funding to jointly tackle a social or economic development problem while sharing risks and results. GDA partnerships can be with private businesses, financial institutions, entrepreneurs, investors, philanthropists, foundations, and other for- and not-for-profit non-governmental entities. In the USAID Forward Progress Report 2013, the agency committed to increasing investments in public-private partnerships to 10 percent
Marion Leonardo Lawson, Foreign Assistance: Public-Private Partnerships (Washington DC: Congressional Research Service) June 13, 2011
42
of mission budgets by FY2015. In addition to focusing more on GDAs, the agency is expanding its Development Credit Authority (DCA) operations. The DCA has established a Strategic Transactions Group in Washington, DC, to introduce new guarantee products and novel investment structures to accelerate private capital to challenging environments. At the field level, the missions have benefited from the deployment of Field Investment Officers Foreign Service Officers with experience in finance and banking to facilitate more PPP transactions. This will help bolster capacity of missions to engage with a range of private sector actors including pension funds, diaspora groups, impact funds, and multinational companies.
20
Figure 5. ODA and FDI to New Alliance Countries in 2010 (billions)1

$3.0 $2.5 $2.0 $1.5 ODA $1.0 $0.5 $FDI
OECD and UNCTAD
Building on the GDA model, Dr. Rajiv Shah has called for enlightened capitalism to take U.S. development policy in a new direction that reflects todays global landscape by harnessing the dynamic power of markets and leveraging entrepreneurs to help solve development problems.43 On one hand, donors and the development community increasingly see the potential of the private sector to help alleviate poverty. On the other hand, companies are realizing they have a deeper shared interest in development that goes beyond charity. British businessman Sir Richard Branson has also called for an enlightened capitalism where business takes a stake in solving major global problems like climate change and poverty. He states
Dr. Rajiv Shah, Embracing Enlightened Capitalism speech, USAID Public-Private Partnership Forum, Washington, DC, October 20, 2011
43
that for instance Grofin, in partnership with the Shell Foundation, creates jobs in Africa through small- and medium-size business investments. These arent charities; they are companies directed towards a social purpose. They exist to solve a problem. They are entrepreneurial. Entrepreneurs find and solve problems. We need more of them.44 These calls by development and business leaders reflect a sea change in thinking. Enlightened capitalism has now reached an entirely new stage a new frontier with the launching of the high level New Alliance for Food Security and Nutrition. The development community has not always embraced the private sector though, and for legitimate reasons. Corporations operating in
The Economist, Sir Richard Branson makes a call for enlightened capitalism, November 26, 2010
44
21
FDI and PPPs can have a positive impact on development through backward linkages to local suppliers, the transfer of technology, and interchange of managers and technicians, thereby increasing incomes, learning, and product standards.
Africa have engaged in corruption, particularly in the natural resources sector. Some development professionals are uncomfortable with foreign aid agencies partnering with the extractive industries precisely for this reason.45 There is also the critique that foreign investment crowds-out local industry, which is unable to compete.46 The previously mentioned concerns about land grabs add to these anxieties about the role of the private sector in development. However, the New Alliance takes a number of measures to address these concerns, as will be demonstrated below. The Anatomy of PPPs is Based on a Clear Division of Labor The evidence suggests that PPPs are quite different from land grabs. These partnerships seek to marry the comparative advantages of donors and companies in a synergistic way. Companies bring expertise such as business planning and strategy, management, logistics, accounting, exporting, marketing, product development, and an array of other specialized skills and technologies to a partnership. FDI and PPPs can have a positive impact on development through backward linkages to local suppliers, the transfer of technology, and interchange of managers and technicians, thereby increasing incomes, learning, and product standards.47 At the same time, donors have deep experience in operating in development contexts and a long history of addressing health, education, democracy, infrastructure, rural development,
Marion Leonardo Lawson, Foreign Assistance: Public-Private Partnerships (Washington DC: Congressional Research Service) June 13, 2011 46 John Mutenyo, Emmanuel Asmah and Aquilars Kalio, Does Foreign Direct Investment Crowd-Out Domestic Private Investment in Sub-Saharan Africa?, African Finance Journal 2010, vol. 12, issue 1, pages 27-52; and John H. Dunning, Multinational Enterprises and the Global Economy (Wokingham, England: Addison-Wesley) 1993 47 Theodore Moran, Harnessing Foreign Direct Investment for Development: Policies for Developed and Developing Countries, (Washington DC: Center for Global Development) 2006
45
and the basic conditions that allow for the private sector to thrive. Donors and governments play an important role in shaping public policy impacting agriculture (e.g. complying with sanitary and phyto-sanitary standards to facilitate trade). PPPs combine the respective strengths of partners under a common vision by establishing roles and responsibilities. For example, the Malawi Dairy Development Alliance is a GDA-initiated PPP. The objective of this partnership is to build the capacity of dairy farmers, local milk processing plants, and farmer-owned milk bulking programs to improve production and profitability.48 This partnership takes a value chain approach encompassing loans to farmers to purchase new heifers, improvements to feed and cattle health, and loan guarantees for milk processing facilities. USAID is responsible for technical advice, financing, and alliance coordination. Land OLakes provides technical expertise and supports the introduction of new cattle breeds. Monsanto provides soybean seeds and technical assistance. General Mills helps with finance, while local milk producers and dairies invest in new practices and technology as well as farmer loan programs. The government of Malawi is working across the value chain, helping with animal importation and speeding up the processing of paperwork by extension agents. As a result of the Malawi Dairy Development Alliance, 23 milk bulking groups were supported or formed during the program seven of these are now registered as cooperatives. In addition 3,400 smallholder dairy farmers increased their incomes by 41 percent, having a direct impact on approximately 14,000 family members. The Alliance also established the countrys first livestock insurance for farmers. Fourteen private sector input and service providers improved their business
Marion Leonardo Lawson, Foreign Assistance: Public-Private Partnerships (Washington DC: Congressional Research Service) June 13, 2011
48
22
management tools and facilities, which sustainably increased profits.49 The Ethiopia Coffee Initiative is a public-private partnership that seeks to build from the countrys comparative advantage in high-quality Arabica coffee, for which global demand is growing. This sector also has high development impact potential since more than 1 million smallholder farmers derive their livelihoods from coffee. The Gates Foundation has funded TechnoServe through a regional project to address the constraints to growth along the value chain. Ethiopia-based Nib International Bank S.C. (NIB) and the International Finance Corporation (IFC) are helping to increase access to finance for processing and exporting. USAID is supporting capacity building. Starbucks and Peets Coffee are purchasing Ethiopian coffees and promoting demand among consumers. The Ethiopian Ministry for Agriculture is engaged in variety research and development, seed distribution, and agronomy extension in support of the partnership.50 The IFC provided a risk-sharing facility worth up to $10 million to NIB, which in turn then provided loans to the cooperatives working with TechnoServe. TechnoServe has been helping these cooperatives establish and operate wet mill facilities to improve the coffee quality about 200 so far. By 2010, 62 cooperatives made up of 45,000 farmers received working capital loans from NIB. These cooperatives exported 2 million pounds of green coffee, receiving an average premium of 40 percent above the price of previously produced low-quality, unwashed coffee. Cooperative revenues increased a
total of $1.5 million, and NIBs agriculture lending portfolio grew 8 percent.51 Tanzania Makes a Deep Effort to Combine PPPs and Ownership The Southern Agricultural Growth Corridor of Tanzania (SAGCOT) is a partnership that has adopted a novel approach. Accounting for an area one-third of the size of the country, the corridor seeks to attract public and private investments in six agriculture clusters. SAGCOT seeks to connect smallholder farmers with commercial agribusiness through hub and out-grower schemes. Under these benefit-sharing models, smallholder farmers in the vicinity of large-scale farms gain access to inputs (e.g. fertilizer), extension services, valueadded facilities, and markets. It will also enable smallholder producer associations so they can aggregate their operations and improve their bargaining power through storage facilities, access to credit, engagement with contract buyers, and other market-oriented activities. It will bring investments in roads and railway projects to reduce transport costs as well as irrigation, storage facility, and block farms to reduce post-harvest losses and improve quality control and market predictability. USAID, the U.K. Department for International Development, and the Norwegian Embassy in Tanzania have expressed an interest in funding the SAGCOT catalytic fund, which will provide social venture capital for start-up costs of commercially viable agribusinesses. Yara International is investing in a fertilizer plant in the port of Dar es Salaam. In September 2012, USAID, the U.K. Department for International Development, and the European Union signed a memorandum of understanding to align investments in road infrastructure upgrade in the Kilombero area, one of SAGCOTs cluster developments. USAID, the World Bank,
51
Under these benefitsharing models, smallholder farmers in the vicinity of largescale farms gain access to inputs (e.g. fertilizer), extension services, value-added facilities, and markets.
Land O Lakes International Development website George Carner, Kathryn Ritterspach Thulin, Jonathan M. White, and Mark Allegrini, Transformational Partnerships: Innovative Approaches to Addressing Food Security in Africa (Washington DC: GMF) April 2012
49 50
TechnoServe website
23
There are examples of the benefit-sharing model of including government, business, and farmers in Tanzania, which helped to set the stage of SAGCOT.
Syngenta, General Mills, Dupont, Monsanto, the Alliance for a Green Revolution (AGRA), National Microfinance Bank (NMB), Norfund, SABMiller, and Standard Bank are focused on seed funding. There are a number of other actual or planned investors from the public and private sectors engaged in a variety of SAGCOT partnerships.52 SAGCOT is emblematic of a public-private partnership with strong country ownership having the support of the government and the government in turn coordinating with other non-government and donor partners at different levels. In January 2011, President Jakaya Kikwete presented the SAGCOT Investment Blueprint at the World Economic Forum in Davos. The government of Tanzania is investing directly in SAGCOT and conducts partner facilitation along with the Tanzania Agriculture Partnership, Yara, Unilever, Prorustica, and the World Economic Forum. A number of local commercially oriented actors are heavily involved in SAGCOT promotion and/or administration including the Agriculture Council of Tanzania, Tanzania Agricultural Partnership, Confederation of Tanzania Industries, and Tanzanian Sugarcane Growers Association.53 As mentioned, country ownership is when a nation can exercise leadership over their development policies and strategies and coordinate development actions.54 In the case of Tanzania, the New Alliance will concentrate efforts around the countrys Agriculture and Food Security Investment Plan or TAFSIP. Tanzanias primary mechanism for
See SAGCOT Investment Matrix http://www.sagcot.com/ resources/downloads-resources/
52
coordinating the TAFSIP is the Inter-Ministerial Coordinating Committee (ICC). The ICCs role is the overall coordination in terms of providing strategic policy guidance, key institutional linkages, and monitoring of performance to ensure that TAFSIP objectives are achieved.55 The Cabinet of Ministers, under the leadership of the president and prime minister, have oversight and responsibility for TAFSIP on behalf of the government. The ICC coordinates the governments leadership with non-state, private sector actors, and donors. A representative from SAGCOT is included in the ICC, which will report to the Cabinet twice a year. Ownership is also reflected in SAGCOTs administration the SAGCOT Centre Limited. Having opened in October 2011, the Centre is led by a chief executive officer who, along with a board and staff, intermediates investments among SAGCOT stakeholders. The CEO is the former director of the Crop Development Division at the Tanzania Ministry of Agriculture, Food Security, and Cooperatives. The board consists of Tanzanian government, academic, technical experts, and business leaders. The Centre has been incorporated as an independent legal entity. It aims to maintain neutrality in order to serve the interests of many diverse stakeholders in a credible manner. It will respond to complaints and be accountable for agribusiness investments and their impacts on smallholders and other environmental and social issues.56 Benefit-Sharing Models Demonstrate Impact and Reveal Failures There are examples of the benefit-sharing model of including government, business, and farmers in Tanzania, which helped to set the stage of
Tanzania Agriculture and Food Security Investment Plan, October 18, 2011 56 Beth Jenkins, Modernizing the Southern Agricultural Growth Corridor of Tanzania: A Case Study (Cambridge, MA: Harvard Kennedy School of Government) 2011
55
This was the result of the Tanzania National Business Council (TNBC). The TNBC was chaired by the president and consisted of 20 private sector representatives and 20 government representatives. It conducted a series of dialogues over a two-year period, resulting in a ten-pillar strategy called Kilimo Kwanza or Agriculture First in 2009.
53 54
Paris Declaration on Aid Effectiveness, 2005
24
SAGCOT. When the sugar industry liberalized, farmers associations were formed so they could engage with the newly privatized sugar mill owners. The farmers associations and mill owners struck a mutually beneficial deal. The associations agreed to provide the millers the volumes necessary for them to achieve their processing capacity and also provided the farmers a variety of services to help them achieve these volume targets. The millers then agreed to purchase these volumes, creating stable incomes for the farmers. These smallholder farmers have voluntarily organized into groups of 15-30, which act like larger farms (i.e. block farms) to allow for more efficient management and economies of scale. The individual farmers maintain ownership of the land and gain a share of the revenues as a proportion of their holdings.57 The Tanzania Rice Partnership (TARIPA) represents one of the first agriculture clusters in SAGCOT involving large corporations and local smallholder rice associations along with the government of Tanzania, and number of donors, including the World Bank, USAID, Norad, Japan International Cooperation Agency, and FAO and several financial institutions. Adopting the hub and out-grower model, the partnership will connect existing farms, farmers associations, and agrodealers operations. It will address the rice value chain constraints and opportunities with the intent to boost production, value-added activities, and capacity all along the value chain.58 Kilombero Plantations Limited (KPL) was established in 2008 by Agrica when it purchased Mngeta farm with funding from the Capricorn Investment Group, African Agricultural Capital,
These partners include Illovo Sugar, the donor-funded Private Agricultural Sector Support program, CRDB Banks Microfinance Services Company, and the local government authorities. 58 George Carner, Kathryn Ritterspach Thulin, Jonathan M. White, and Mark Allegrini, Transformational Partnerships: Innovative Approaches to Addressing Food Security in Africa (Washington DC: GMF) April 2012
57
and NORFUND. This resulted in a $35 million investment in land purchase, leasing, and preparation, irrigation and drying equipment, agricultural machinery, and rice mill and warehouse facilities. With 5,429 hectares now under cultivation, rice production increased seven-fold between 2009 and 2011, benefiting 1,844 smallholder farmers. USAID and other donors are supporting the effort also.59 Contract farming can bring smallholder farmers into the formal economy, and, under the right conditions, has resulted in income security, higher returns, and a number of other benefits for them.60 For instance, poverty levels are quite high in south-eastern Tanzania, where cashew nuts are a cash crop. The cashew supply chain is inefficient and characterized by middlemen, monopolies, and low farm-gate prices, to the detriment of farmers. Kilimo Trust, an NGO based in nearby Uganda, collaborated with cashew farmer groups in the Masasi District to develop business plans, create a company, and improve profitability. The producer groups formed the Masasi High Quality Farmers Products Limited. The companys purpose is to source cheaper input, find markets for the farmers products, and help them increase their production and income.61 The farmers were able to secure a license to purchase inputs in bulk directly from manufacturers which reduced cost of sulfur significantly from US$1,000 per metric ton to US$150 per metric ton. Coupled with support from the Food and Agriculture Organization (FAO), the farmers, through their company, installed a cashew shelling factory. The farmer groups established an extension service run by the farmers themselves.
SAGCOT Investment Partnership Program Opportunities for Investors in the Rice Sector, February 8, 2013.
59
Contract farming can bring smallholder farmers into the formal economy and under the right conditions has resulted in income security, higher returns, and a number of other benefits for them.
Don Seville, Abbi Buxton, and Bill Vorley, Under what conditions are value chains effective tools for pro-poor development? International Institute for Environment and Development/ Sustainable Food Lab, 2011
60 61
http://masasi-farmers.webs.com/
25
If a country has weak country ownership where national macroeconomic policies run counter to sectorspecific agriculture plans, then New Alliance PPPs will have difficulty scaling up.
They have obtained organic certification and executed sales contracts with OLAM International, which in turn enabled farmers to secure their income and farm inputs on credit. These improvements resulted in higher farm-gate prices and a product that offered greater opportunities to access foreign markets. As shown in the work of the Transatlantic Experts Group on Food Security in Africa, a German Marshall Fund-led initiative, these partnerships share many of the characteristics of transformational partnerships, which have the potential to dramatically increase food security on the continent. They take a holistic approach adopting either a value chain or corridor framework. Through the value chain approach including the provision of varietal seeds, access to capital, farming/husbandry techniques, valueadded processing, transport, marketing, and trade partners can concentrate their efforts on the specific barriers to economic growth. They can collectively engage in practical problem-solving. Among the other characteristics Experts Group members agreed were necessary for transformation were the need to create positive synergies among partners, stakeholders, and beneficiaries and leverage complementary competencies and resources from all partners.62 Another key principle determined by the GMF Experts Group was Learning and Adaptation. Successful partnerships adopt a culture of learning to allow for adjustments to specific and evolving country and community contexts. This does not always occur. For instance, a group of NGOs and multinational companies formed a partnership to increase the capacity of farmers in Tanzania so they could engage in formal contracts and integrate into
62
an agricultural supply chain. However, production levels were lower than expected, machinery and input provisions were not timely, the quality of seeds provided to farmers was poor, and postharvest training was slow. The multinational companies had not sufficiently trained their field staff in agriculture, and there was a failure to fully understand the assets and skills of the farmers. Although the partnership ended, the smallholder farmers across six districts were organized, allowing them to collectively agree on and sign contracts. The farmers have since switched to an alternative crop to supply local markets. This example demonstrates the need to ensure that there is learning and a willingness to adjust on both sides farmers and companies in order for a partnership to succeed. Ownership Gaps Pose a Threat to PPPs The Malawi dairy, Ethiopia coffee, and SAGCOT partnerships represent deliberate efforts to harness the dynamic power of markets and leveraging public and private resources in consultation with civil society. They are helping push the frontier of enlightened capitalism and are potentially transformational. In effect, they demonstrate the viability of combining the two key elements of the New Alliance country ownership and PPPs. However, there are pitfalls that lie ahead for New Alliance PPPs. For instance, value chain-focused PPPs such as the Malawi dairy and Ethiopia coffee partnerships reflect the exercise of hostcountry leadership on the part of government officials, entrepreneurs, and farmers. But, value chain PPPs can sometimes lack or have limited coordination with higher levels of the government and policymaking (i.e. alignment with sector or national strategies).63
Transatlantic Experts Group meetings in Washington, DC, Brussels, and Dar es Salaam 2011-2012
63
26
By contrast, SAGCOT has high-level buy-in from the government and has galvanized donors and private sector investors internationally. SAGCOT PPPs have engaged with local farmers and officials, but the dialogue has been primarily at higher levels. It has broad ownership but not necessarily deep ownership. SAGCOT has been viewed as a somewhat top-down effort.64 Local outreach is only now beginning to occur in a systematic way. The energy and policy momentum gathered at the higher level needs to extend more deeply to include local public and private actors in the corridor. Ownership gaps in PPPs either at the national or local levels could lead to problems down the road if they are not addressed. Under the New Alliance, the success or failure of PPPs will arguably depend on country ownership capacity, as gauged in the previous section using the Paris Monitoring Survey. If a country has well-established strategic planning, policy, and budgeting processes at the national and sector levels and a leadership that is capable and willing to engage with a wide range of stakeholders, this creates an environment where private actors can better understand and have more confidence in the rules of the road, so to speak. If a country has weak country ownership where national macroeconomic policies run counter to sector-specific agriculture plans, then New Alliance PPPs will have difficulty scaling up. There is also the question of the ability of smallholder farmers and producers to participate in and benefit from value chains. There are a number of studies indicating that the integration into formal value chains can generate benefits for smallholder farmers and producers. Linking to exporters or supermarket chains can result in income security, higher returns and productivity, the adoption of
Beth Jenkins, Modernizing the Southern Agricultural Growth Corridor of Tanzania: A Case Study (Cambridge, MA: Harvard Kennedy School of Government) 2011
64
standards and certification, and improved quality.65 However, the extent to which farmers achieve these gains depends on their assets, such as productive capital, access to credit, irrigation, or storage facilities. Factors like participation in associations and cooperatives or other forms of social capital determined their ability to adopt new technologies and management practices. Infrastructure and roads are also critical factors.66 By definition, the poorest rural farmers in New Alliance countries will be the least prepared to integrate into value chains. Graduation from subsistence farming to either commercial farming or non-farming livelihoods cannot be achieved by PPPs alone. Other workable models will be required to extend opportunities through traditional safety net and other rural development programs, taking a differentiated approach. PPPs will not substitute for traditional safety net programs or efforts to build these capacities in rural areas, which will need to be maintained or strengthened. Building Trust Between Public and Private Sectors will be Critical Another pitfall for New Alliance PPPs is the lack of trust and understanding between the public and private sectors. Governments can have a positive outcome on agriculture by investing in transport, electricity, water, telecommunications, and physical storage, providing stable regulation and property rights (e.g. land), contributing to research and extension services, and facilitating trade through customs reforms and compliance with international standards. The government commitments under CAADP to raise agriculture productivity by 6 percent and allocate 10 percent of their national budgets to the sector are a major step in the right
Don Seville, Abbi Buxton, and Bill Vorley, Under what conditions are value chains effective tools for pro-poor development? (International Institute for Environment and Development/ Sustainable Food Lab) 2011
65 66
Given the level of specificity of the policy reforms and investments outlined in the frameworks, these transactionoriented discussions could potentially spark a number of leading PPPs in New Alliance countries.
Ibid.
27
Figure 6. Mutual Accountability under the New Alliance
direction. However, governments can be suspicious of the private sectors profit motive, while the private sector can sometimes view government as hostile or predatory.67 Based on one study, which included two New Alliance countries, the private sector in Africa
Transatlantic Experts Group meetings in Washington, DC, Brussels, and Dar es Salaam 2011-2012
67
believes that governments need to play a more constructive role in creating an enabling environment and be less involved in direct intervention in value chains.68 This study also concluded that government interventions in
Mima Nedelcovych and David Shiferaw, Private Sector Perspectives for Strengthening Agribusiness Value Chains in Africa: Case Studies from Ethiopia, Ghana, Kenya and Mali (Washington DC: Partnership to Cut Hunger in Africa) May 2012
68
28
crop value chains increased uncertainties at all levels, from production to marketing, for private investors in Africa. Government incentives for agriculture producers and processors have been established mostly in the export sectors in Africa. However, there is the perception that support for the domestic market has been limited and that the government often provides mixed signals to market participants.69 The rules and regulations for incorporating smallholder farmers into contract farming or out-grower schemes were viewed as problematic. While the overall business climate in Africa may be improving, in the case of agriculture, much work needs to be done if PPPs under the New Alliance are expected to produce results. The mutual accountability under the New Alliance seeks to ensure, among other things, that public-private dialogues advance in these countries (see Figure 6). This could help further build mutual trust between these sectors and in turn generate better policymaking. Progress on these dialogues and other objectives will be monitored under CAADP-donor Joint Sector Reviews and the G8 Leadership Council. Given the level of specificity of the policy reforms and investments outlined in the frameworks, these transaction-oriented discussions could potentially spark a number of leading PPPs in New Alliance countries. These PPPs in turn could create a virtuous cycle of policy reforms, investments, economic growth, and poverty reduction, resulting in ever-expanding agricultural transformation and development benefits. But, trust will be limited at first. This will require concentrating on key high-potential value chains, corridors, or zones where PPPs can thrive and corruption is limited. Corruption is a major source of distrust and will constrain the impact and scale of PPPs under the New Alliance. Here the adoption of a value chain or corridor approach aligned with
69
sector and national strategies can provide a useful framework for catalyzing PPPs. NGOs also can play a constructive role in accountability and building trust between the public and private sectors. The G8 Leadership Council is meeting at G8, World Economic Forum, and other major gatherings. Such meetings help generate high-level buy-in and support advocacy efforts. Leadership Council meetings will serve as opportunities for senior representatives from African governments, donors, business, and NGOs to share case studies and exchange lessons learned on partnerships. Difficult questions, such as how partners can balance commercial returns versus development needs under PPPs, are being addressed at these meetings. However, Council meetings are not a practical venue for addressing the more technical aspects of the New Alliance in a meaningful way. Real progress and trust-building will need to occur on the ground. The New Alliance Cooperation Frameworks will tackle this problem. Each partner country reaffirms its intention to provide the human and financial resources and the mechanisms for dialogue with the private sector, farmers, and other stakeholders, and across government ministries that are required for the achievement of tangible and sustainable outcomes, the acceleration of [the countrys] development, and the delivery of tangible benefits to smallholder farmers, including women.70 Here the New Alliance not only can help build trust to enable PPPs but also widen country ownership in the process. These will have to be meaningful exchanges that result in policy changes that build investor confidence and trigger agriculture investments that raise incomes for agribusiness but also rural communities. Local NGOs can play a critical role
New Alliance for Food Security and Nutrition Cooperation Frameworks
70
Ibid.
29
in trust-building and intermediating between the public and private sectors. New Alliance partners include firms but also associations representing business, such as the Tanzania Horticulture Association, INTERCOTON (a cotton association in Cte dIvoire), and Union Conannet des Etuveuses de Riz de Bagr (a group of 460 women
cultivating and processing of local parboiled rice in Burkina Faso). Engaging directly with local associations that may already serve as platforms for such dialogues as well as the relevant government officials responsible for investment promotion and policy formation will be critical to success.
30
5
T
Conclusion
here is now a global consensus on the need to concentrate development efforts on food security. It continues to remain high on G8, G20, United Nations, and African Union agendas. Food security is not only about producing more food. It means moving from low-input/low-output subsistence farming to increasingly diversified, market-oriented production and a virtuous cycle of increasing on- and off-farm incomes and greater access to nutritious food.71 This gets to the heart of the challenge of tackling poverty and sustainable economic growth in New Alliance countries. Country ownership and public-private partnerships are defining elements of the New Alliances approach. Yet each of these elements presents a number of challenges that will confront the New Alliance. There are concerns that as donors and African governments embrace PPPs, the voice of local communities and farmers will be marginalized and in effect undermine country ownership. There is heightened attention on land grabs in Africa resource-driven investments that are viewed as having limited or even a negative development impact.
However PPPs under the New Alliance are intentionally designed to support governance and better land management, include local communities and farmers, and enable country ownership. Importantly, many countries in Africa are definitely moving in a new direction and showing progress across a number of economic and social indicators. Africa will likely see further gains as the continents emerging middle class drives a new dynamism, which, if linked to New Alliance efforts, could magnify development outcomes. Public-private partnerships (PPPs) are considered an innovative form of enlightened capitalism where foreign aid agencies partner with businesses to catalyze markets to reach the poor.72 Aligning PPPs with African agriculture country plans is viewed as a way to combine the dynamic power of markets with aid effectiveness principles such as country ownership. As the New Alliance seeks to achieve this, it will test the limits of enlightened capitalism and could potentially advance the frontier of development efforts in Africa.
Africa will likely see further gains as the continents emerging middle class drives a new dynamism, which, if linked to New Alliance efforts, could magnify development outcomes.
71
Dr. Rajiv Shah, Embracing Enlightened Capitalism speech, USAID Public-Private Partnership Forum, Washington, DC, October 20, 2011
72
31
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Economic POlicy Paper Series 2013

The New Alliance for Food Security and Nutrition

The New Alliance for Food Security and Nutrition

Economic Policy Paper Series April 2013

The New Alliance for Food Security and Nutrition

The German Marshall Fund of the United States

The New Alliance for Food Security and Nutrition

The German Marshall Fund of the United States

The New Alliance for Food Security and Nutrition

The German Marshall Fund of the United States

Africa Moves Beyond Permanent Crisis

Africa Development Indicators, World Bank, 2011 UNCTAD

The New Alliance for Food Security and Nutrition

6 Oil Exporting (%) 5 Oil Importing (%)

Ernst & Young, Africa Attractiveness Survey 2012

The German Marshall Fund of the United States

The New Alliance for Food Security and Nutrition

The German Marshall Fund of the United States

The New Alliance and Country Ownership

Paris Declaration on Aid Effectiveness, 2005

The New Alliance for Food Security and Nutrition

USAID Forward Progress Report 2013

The German Marshall Fund of the United States

The New Alliance for Food Security and Nutrition

Burkina Faso C Cte dIvoire N/A Mozambique C

Survey on Monitoring the Paris Declaration, OECD, 2011

The German Marshall Fund of the United States

Survey on Monitoring the Paris Declaration, OECD, 2011 Ibid.

The New Alliance for Food Security and Nutrition

See New Alliance Cooperation Frameworks

The German Marshall Fund of the United States

The New Alliance for Food Security and Nutrition

The New Alliance and Public-Private Partnerships

The German Marshall Fund of the United States

Official Development Assistance

Foreign Direct Investment (FDI)

UNCTAD, World Bank, and OECD

The New Alliance for Food Security and Nutrition

Figure 4. New Alliance FDI inflows 2000-2011 (billions)1

Ghana Mozambique Tanzania Cte d'Ivoire Ethiopia

The German Marshall Fund of the United States

Figure 5. ODA and FDI to New Alliance Countries in 2010 (billions)1

OECD and UNCTAD

The New Alliance for Food Security and Nutrition

The German Marshall Fund of the United States

The New Alliance for Food Security and Nutrition

Paris Declaration on Aid Effectiveness, 2005

The German Marshall Fund of the United States

The New Alliance for Food Security and Nutrition

The German Marshall Fund of the United States

The New Alliance for Food Security and Nutrition

Figure 6. Mutual Accountability under the New Alliance

The German Marshall Fund of the United States

The New Alliance for Food Security and Nutrition

The German Marshall Fund of the United States

The New Alliance for Food Security and Nutrition

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