Sahel Investment Proposal

 

 

Sahel Investment Plans and Opportunities
HiH Investment Forum 2024

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The Proposal

The Sahel is a region with significant environmental, political, and social challenges. It is also endowed with abundant natural and human resources, offering tremendous potential for sustainable growth. The Hand-in-Hand Initiative facilitates partnerships and investments to accelerate the transformation of agrifood systems in the region.
Based on lessons learned, three pillars for action have been identified:

1. Ensuring sustainable land and water management and governance
2. Transformation of agri-food production, postproduction systems and trade
3. Strengthening technical and institutional capacities for resilience building and transformational leadership. 

The UN's Integrated Strategy for the Sahel, with governance, resilience, and security as its pillars, is a key programmatic entry point for the Hand-in-Hand Initiative's engagement in the region. Additionally, the investment plans for Economic Community of West African States (ECOWAS) and the Common Market for Eastern and Southern Africa (COMESA), developed with FAO's support, facilitate the Hand-in-Hand Initiative's engagement in the Sahel. 
With the leadership of ECOWAS and CILLS (Committee for Drought Control in the Sahel), the core elements of the HIH Initiative in the Sahel is to complement and capitalize ongoing efforts of national governments, regional bodies, and development partners. It amplifies the existing efforts to direct resources on where they can have maximum impact through advanced geospatial mapping and socio-economic analysis. 

sahel irrigation square jpg

Total Investment 
142.9 Million USD
IRR Value
21.4%
NPV Value
102.1 Million USD
Direct  Beneficiaries
198,085
Indirect Beneficiaries
48,954
Total Beneficiaries
247,039
Per capita income increase
176 USD/year
ExACT TOOL
114,149 mt

 

sahel irrigation square jpg

Total Investment 
376.6 Million USD
IRR Value
18.0%
NPV Value
169.8 Million USD
Direct  Beneficiaries
542,154
Indirect Beneficiaries
135,519
Total Beneficiaries
677,673
Per capita income increase
477 USD/year
ExACT TOOL
371,860 mt

 

sahel irrigation square jpg

Total Investment 
17.4 Million USD
IRR Value
24.6%
NPV Value
10.2 Million USD
Direct  Beneficiaries
9,510
Indirect Beneficiaries
4,537
Total Beneficiaries
14,047
Per capita income increase
202 USD/year
ExACT TOOL
12,683 mt

 

sahel irrigation square jpg

Total Investment 
1.1 Billion USD
IRR Value
31%
NPV Value
419.0 Million USD
Direct  Beneficiaries
48.9
Indirect Beneficiaries
xxx
Total Beneficiaries
48.9
Per capita income increase
36 USD/year
ExACT TOOL
 

 

Sahel Typologies

Poverty

Potential

Efficiency

Efficiency
Click on individual maps to get detailed view on FAO GIS platform


Agro-informatics connects information technology with the management, analysis and application of agricultural data to design more accurate and targeted agricultural interventions. The use of new technologies and techniques in agriculture, such as satellite imagery, remote sensing, and geographic information systems, enable the transformation of data into actionable information.

 


Government of Sahel: Investment cases in the Sahel

 


Sahel Investment Cases and Interventions

 

 

Irrigation

536.9 Million USD

938,759 Beneficiaries

Community investment solar powered irrigation pumps 

Solar-based surface pump solutions contribute to the scale-up of shallow water use. With a high demand from communities, the planned operations of small reservoirs and solar pumps can be complementing leading to community investment with and high potential for food security increase and in reducing poverty.

Therefore, investments identified and prioritized are focused on rehabilitation or construction of small-scale water reservoirs, with a 20-year life cycle of solar panels and 4-year life cycle of pumps with a progressive adoption rate by small communities, with a high component of public investment with support of the private sector. 

13,500 thousand hectares across all Sahel countries can be used for the development of small reservoirs, dams or pans, benefiting more than 500 thousand farmers. Investment required is USD 142.9 million, of which 13.2 million are required from private investments, with an IRR of around 21.4 % over a 20-year period. 

 

Small Reservoirs

376.6 Million USD

677,673 Beneficiaries


Community investment small reservoirs

Even though the Sahel has abundant renewable water resources, they are not being used. As such, water supply is unevenly distributed and difficult to access and manage. There is lack of infrastructure. Accessibility is on the decline due to climate change. These obstacles translate into low agricultural productivity, highest yield gaps on the continent, and persistent food insecurity. Through the Hand-in-Hand Initiative, investment priorities on water management have been selected as a priority investment area.

The potential of new cost-effective public infrastructure can catalyze small-scale irrigation in the Sahel. These comprise small dams and pans which are typically less than 5 m in height.  They can be built as dams (barriers) in drainage lines or off-channel, on perennial or ephemeral rivers.

These kinds of small water storage structures can add to the water resource potential and trigger small scale irrigation by providing additional water resources for the irrigation of adjacent arable lands. Their potential, based on broad geographic characteristics (rainfall, runoff, slope, proximity of storage sites to land, etc.). 
Coordinated investment in irrigation infrastructure in 60,000 additional ha suitable to surface water irrigation in ten countries, for suitable food and cash crops with high demand in the region.

45 thousand hectares across all Sahel countries can be used for the development of small reservoirs, dams or pans, benefiting more than 500 thousand farmers. Investment required is USD 376.6 million, of which 34 million are required from private investments, with an IRR of around 18 % over a 20-year period. 

 

Solar Pumps

17.4 Million USD

14,047 Beneficiaries


Private sector investment solar powered irrigation pumps 

Groundwater has played an important role in small scale irrigation in the past decades, particularly where shallow aquifers allow access via shallow wells. Use of both groundwater and surface water sources can extend the crop production season, and offset the risks associated with surface water variability. Utilizing groundwater is undeniably essential for increasing shared prosperity in the Sahel – especially since surface water is so scarce. 

Farmers in the Sahel can tap into the shallow groundwater along rivers and in lowlands to develop irrigation, with limited overexploitation risks. There is huge potential to develop shallow groundwater for farmers to take the initiative in irrigation development, tapping into the shallow groundwater with pumping equipment fitted to serve less than one to several hectares, for individuals or a small group of producers.

Solar-based surface pump solutions need to be more accessible in the Sahel to ease irrigation operations for women and other vulnerable populations while reducing pumping costs, limiting greenhouse gas (GHG) emissions, and preventing groundwater overuse.

Solar-powered pumps are increasingly becoming available and affordable on the local market. Enabling the local production and distribution of proven surface solar pumps will contribute to the scale-up of groundwater-based irrigation. These pumps are also easier for women to handle and maintain, compared to diesel pumps.
1,500 hectares across all Sahel countries can be used for the development of solar powered pumps for small-scale agri-entrepreneurs, suitable for high value-added crops, benefiting more than 9,510 farmers. Investments required are USD 17.4 million with an IRR of 24.6% over a 20-year period. 

 

Market

1.1 Billion USD

48.9 Beneficiaries

Market integration and trade

Market integration and trade is an engine of growth, development, and food security, especially as improvements in regional trade has potential in stabilizing domestic food markets. 

Intra and inter regional trade in Sahel faces similar challenges such as high import and export tariffs, which are higher for agricultural products, non-tariff measures (NTM), specifically non-tariff barriers (NTB) which represent non-technical measures that difficult trade among the Sahel countries. In addition, transport and infrastructure represents a big barrier to trade between Sahel countries, where times for import and export at the border are high as well as transportation costs. 

Under the African Continental Free Trade Area (AfCFTA) framework, tariff barriers are in the process on being reduced, as countries ratify the agreement. Nevertheless, there still are significant political efforts needed to achieve free trade in the region.

 In addition, NTMs could diminish the effectiveness of trade agreements if the focus is only on tariff reduction, as NTMs can increase if tariffs are reduced. Efforts need to be directed to remove NTBs and overlap NTMs. Trade costs can significantly decrease if countries in the region: i) harmonize their NTMs by imposing the same set of SPS and TBT requirements, ii) agree mutual recognition, meaning countries accept each other’s conformity assessment procedures as sufficient to comply with the same standard, or iii) implement equivalence, where countries recognize other country’s standards as equivalent to their own standards. 

In addition, resources must be directed to support the current functioning reporting mechanism for private sector to raise problems and to detect NTBs. This tool was developed by UNCTAD and the African Union, with the objective to help make trade on the continent easier and less costly. In two years of operation, the tool has shown tangible results and private investments are being raised to improve and expand it. 

Improving infrastructure is key to reduce transportation costs which currently are high in the region and impose a barrier to trade. Building on the current initiative of the Trans-African Highway network routes, several corridors have been identified, which cover all 10 Sahel countries and are planned for roads to be improved and developed. Around 5,467 km in the 10 countries can be improved or built. 

Efforts to reduce tariffs and non-tariff measures, as well as forgone income from agricultural imports and exports, and improvements in infrastructure can be estimated to amount for a total USD 3 billion. These efforts can be divided into three phases, where the first phase would require investments of USD 1.1 billion. These measures can lead to an increase of 0.6% GDP per capita yearly meaning an average IRR for the region of 31% for 15 years, with more than 48 million beneficiaries. 

 


 

 

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Contact

For more information, please contact the Hand-in-Hand team.