Kanayo F. Nwanze, president of the International Fund for Agricultural Development (IFAD), recently spoke with AllAfrica about the future of international assistance and the role of agriculture in Africa's development. IFAD aims to eradicate rural poverty in developing countries by increasing access to financial services, markets, technology, land and other natural resources.
Having grown up in Nigeria, do you have any specific memories of how you saw foreign aid being effective or ineffective? How might this experience have shaped the direction you took in the development field, or now at IFAD?

I was a beneficiary of development assistance from the Ford Foundation, which supported my post-graduate studies in the United States where I got my advanced degrees in agricultural biology.

I think coming from a background where I had uncles who were small farmers, I certainly saw my potential role in working with farmers, and agriculture was the line that I decided to take. So in a sense the Ford Foundation grant [made it] clear to me that well-targeted assistance to developing countries - human resource development, capacity building, helping the countries themselves to grow their own potential change agents - was certainly the way to go. That in a sense shaped my own career path in agricultural development.

Since starting operations in 1978, IFAD has invested more than U.S. $10 billion in at least 800 projects and programs, reaching more than 340 million rural poor. Taking this into account, what specific examples can you describe to illustrate that development assistance works?

We have many examples. I think the figures you have just given are very clear indications of how much IFAD has invested in supporting countries' development programs and strategies and priorities. And we have very good stories coming out of Africa in particular: the cassava program in West Africa where we've invested about 100 million dollars, [for example]. We have excellent stories coming out of Ghana. We have a food bank in Niger, which helps farmers to borrow food during difficult periods or in case of bad harvests.
It's not the volume of investment or the number of projects and the number of countries so much as the tangible impact of these investments on the lives and livelihoods of poor people. I think this is essentially the transformation that we expect, the outcome of our investment in improving lives, creating wealth and linking these farmers to markets.

This is what IFAD does, working with communities at the grassroots level, and it's certainly a very lofty mission that the institution has and we'll continue to work in this direction with our partner countries.

In the past, how do you think foreign aid has failed in Africa?

I'd rather talk about success stories. Africa has benefitted tremendously from development assistance. Until the current economic crisis some sub-Saharan African countries were experiencing tremendous growth of close to eight to 10 percent average. This has dropped significantly. I think the recent estimate is about 1.5 percent economic growth.

Barring the current financial crisis, development assistance to Africa has had considerable impact in helping countries grow their own economies and supporting infrastructure development.

It's very important that we recognize that it is the responsibility of African countries, of Africa's leadership, to set the tone for Africa's development. They have to demonstrate a commitment, they have to give political leadership to their countries. No plant, no tree is able to make use of the energy from the sun if it's not fully grounded in its own soil. So I think it's important that African countries establish the foundation from within for any development assistance to be of value to their countries.
I do not know any country, any nation, any people whose development, whose transformation has taken place solely on the basis of foreign assistance. Each country must be grounded in its own transformation.

This is where African leaders must demonstrate the goodwill and the political will to transform their own countries.

You have said that Africa is ready to shift from food aid to farm investment. How can this be achieved and how do you find the right balance between food aid and long-term agricultural investment?

As long as there are situations of crisis and there are famines and droughts and loss of crops due to extreme weather conditions and the increasing impact of climate change, people will need emergency food aid. But African governments will have to learn to stand on their feet, solidly grounded in their own soil to be able to maximize foreign assistance.

For Africa, long-term investment into agricultural development is key.

To ensure a sustainable transformation of agriculture in Africa we must talk about medium- to long-term investments and this is what IFAD does

Not just agriculture, but investing in smallholder agriculture. Why?

Eighty percent of the farmers in Africa are smallholder farmers. The majority of them are women. They produce 80 percent of the food that is consumed by Africans. Obviously, if these are the people that produce the food that we eat we must invest in smallholder agriculture.

We have proof that investment in smallholder agriculture is two to four times more profitable than investment in any other sector or sub-sector. It's very simple mathematics.
If you are talking about a majority of the population that produces the food that we eat then we must provide them with the right technologies.

We must link them to markets both for inputs and for outputs. We must be able to give them assistance for the whole value chain so they can add value to their produce, they can be able to sell their produce in markets and connect with the last mile of road to lead them to markets.

Africa has to go from food aid to sustainable, long-term production.

This is the time for us to do it because the food crisis and the current economic crisis have shown us that we cannot continue to be dependent on food aid or imported food.

Is that message being heard?

The message is being heard because we have been fortunate here in Rome to have been associated with the whole G8 process. For the first time the G8 agriculture ministers were meeting and the WFP (World Food Programme), FAO (Food and Agriculture Organization) and IFAD were present. We delivered our message. We participated in the development ministers' meeting in Rome and also in the finance ministers' meeting in Lecce. The finance ministers recognized the importance of food security for national and global security.

Twenty-five years ago Vietnam was a net importer of food. Today Vietnam is the second largest exporter of rice, produced by smallholder farmers - 70 percent of the rice farmers in Vietnam. If it can be done by China, by India, by Vietnam, I'm sure Africa should be able to do it.

What lessons can be learned from the past to assure that development assistance in Africa is done more efficiently and effectively?
Let's look at the history of support to agriculture. The figures that we have show that a percentage of ODA (overseas development assistance) to agriculture dropped in the 1980s from as high as 18 percent to 2006 where it was about 2.5 percent. It's now about three or four percent.

This was international assistance to agriculture. National investments in agriculture also dropped in Africa, in particular, from as high as 14 percent to as low as four percent.

We saw this food crisis of 2007, which resulted in riots in over 30 countries across the world, and in Haiti it resulted in the fall of a government. For these changes to occur we need to invest more in agriculture and, certainly in Africa, it's the basis for economic growth. It provides not only essential food and nutrition, but it also is the largest sector for employment.
One other impact that we must recognize is that with the financial crisis remittances are beginning to drop because migrant workers are returning to their home countries, to their villages, to their rural communities. So you have a drop in income. Investing in smallholder agriculture you are doing two things. You are able to stem the migration from the rural to the urban cities, and from the urban cities to the West.

So you are investing not only in food security, you are also investing in national security and international global security because you can stem the migration of people from the developing world to the developed world. We have to look at this as an investment in our common future.

IFAD works at the grassroots level - how important do you think this is to ensure that foreign aid is used properly?
Communities know best what is good for them and when you are engaged in supporting programs and projects that are community driven you essentially are building that ownership and leadership that the community needs.

We have, at IFAD, invested in over 60,000 communities where we have helped them build farmers' organizations, build their own institutions and link them with financial services through rural financing.

Grassroots, community-based development is the bedrock for solid societies. We have to look at this as investing in smallholder agriculture. Our experience has shown that when you invest in community development you basically invest in the future of a country.

Is there anything else that you would like to tell us?
It is important that we do not allow the economic crisis to impact on development assistance to Africa. While the impact is apparent in terms of loss of jobs in the developed world, in the African context it's going to be later. It's a ripple effect.

It's going to begin to impinge because of a drop in commodity prices, less income to governments and an inability to meet civil servants' salaries. So it's important that the commitments of the G7 that were made in Gleneagles, to double aid to Africa by 2010, are met. Today we are about $22 billion below the mark.

Having said that, my message to African leaders is what I've said earlier: put your house in order, get your act together and demonstrate commitment and responsibility and accountability. They have to demonstrate their willingness to make the necessary changes to transform their governments and their policies to be able to receive the full support of the development community.