The Proposal

Southern Africa can contribute significantly to the growing global demand for food and energy in the long term. The agriculture sector is important for the regional economy, contributing about 17% of the region’s GDP, and supporting over 60% of the population depending on agriculture for their livelihoods . Although agriculture already plays a significant role in the economies of the subregion, it has the potential for a greater contribution to economic growth, job creation, poverty reduction, food security, and regional integration. 

Agriculture has been prioritised as an engine for economic transformation, inclusive economic growth, employment creation, and ending malnutrition and hunger at the continental level, as highlighted in the Malabo Declaration. At the regional level, the Regional Agricultural Policy (RAP) and the Revised Regional Indicative Strategic Development Plan (RISDP) further position the agriculture sector as critical for achievement of food security, poverty reduction and sustainable economic development (Southern Africa Development Community 2015).

Agriculture in Southern Africa is labour intensive and inefficient, especially regarding the small size landholders. The sector is constrained by limited technical capacity, inadequate infrastructure, food insecurity, the predominance of subsistence farming, and the sector’s vulnerability to climate change. On the last one, climate change is expected to increase temperatures and drying conditions, as well as the intensity and frequency of extreme weather events.
Considering the need to improve water management, and better market access, the Hand-in-Hand Initiative seeks to complement ongoing efforts of national governments and capitalize on the work developed by SADC in order to maximize impact. 

Southern Africa and the Hand-in-Hand Initiative

Currently, the Initiative's task force team is working with seven countries in the region: Angola, Eswatini, Lesotho, Malawi, Mozambique, Zambia and Zimbabwe, and investment priorities have been identified for all countries. In each country, the Initiative targets regions with high rates of poverty and untapped potential for commercially oriented value chain development, as well as different commodities and value chains such as grains, poultry, fisheries, micro-irrigation, mechanization, among others. 

In addition to working along with SADC, the HiH initiative for Southern Africa aims at complementing efforts not only from the country programmes, but from regional multi partner programmes, capitalising on ongoing projects on the region from The International Aid Transparency Initiative (IATI). 

With a two-phase approach, HiH is aligning efforts in its first phase for two axes for action in the region: 

1. Climate Smart Agriculture and Water Management 

2. Market - Trade integration

Southern Africa Typologies

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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.

Initiative of Southern Africa: Investment cases in the Southern Africa

Southern Africa Investment Cases and Interventions

Climate smart investment and water management

Evidence indicates Southern Africa is facing warming conditions, which will increase at a higher rate of global averages due to the semi-arid and drier south-western areas. This will represent higher challenges associated with water insecurity, negatively affecting rainfed and irrigated agriculture production, as well as energy generation  .
In addition, as of 2015, the total irrigated area in the region stood at 9 million hectares, representing only 9% of all cultivated area of 107 million hectares, and consuming 70% of the available freshwater resources (International Water Management Institute, 2015). Currently, there is low water harvesting and storage capacity, with only 1% of runoff being dammed and siltation of existing reservoirs.

This scenario imposes the need to invest in water management in the region, especially focused on increasing irrigation with a sustainable and transboundary focus.  In consequence, investments respond to two main technologies for water management and irrigation: 

1. Implementation of small reservoirs irrigation

2. Irrigation equipment such as solar powered pumps to smallholders dependant on groundwater resources. 

Suitable areas have been identified using the multicriteria decision analysis (MCDA) using geographic information systems (GIS) to evaluate and rank alternative solutions based on multiple criteria, such as groundwater, run-off water bodies, among others.

For the first phase, 55 thousand hectares suitable for irrigation have been identified to develop reservoirs with public investments and focus on sustainable and inclusive water governance management practices. Investments are estimated to be USD 284 million with a NPV of USD141 million and an IRR of 17%, benefiting 174,113 individuals. 
On the other hand, around 26 thousand hectares have been identified to provide irrigation equipment (including solar pumps, fenced enclosure, drip irrigation kits) for small-scale agri-entrepreneurs, suitable for high value-added crops, with private irrigation systems. The investment required is USD 269 million with an NPV of USD 188 million and an IRR of 24%, benefiting 36,413 individuals.

Market Trade Integration 827 Million USD 36.6 Million Beneficiaries

Market trade integration

While there are current initiatives that promote integration such as the Southern African Customs Union (SACU), deeper integration across and within the region can raise potential growth and increase job creation. Regional integration can be particularly beneficial for the region considering 6 of the 10 countries are landlocked, meaning integration can bring access to larger markets, higher opportunities and trade flow. 

There are several challenges for integration in the region such as the limited diversification of primary commodities, high trade costs such as tariff, nontariff barriers, policy factors, custom inefficiency infrastructure, and slow integration and implementation of SADC objectives. Therefore, HiH has identified several areas to increase integration capitalizing on ongoing initiatives such as de African Continental Free Trade Area (AfCFTA). 

Trade costs are considered to be one of the main barriers to trade in the region, this can be divided in three categories: tariffs, nontariff measures (NTMs), and other costs. 

African countries still impose high duties on trade among themselves, particularly for agricultural products; for SADC these products face a 13% duty inside the continent. In addition, more than 2,400 NTMs have been identified in the agricultural sector for SADC, applied on 250 agricultural products at the HS 4 digit. That is an average of 10 NTMs per product . Nontariff barriers affecting intra–SADC trade include trade licensing, quotas and bans, price controls, competition policies, rules of origin, technical barriers to trade, and poor infrastructure. In addition, transport connectivity and trade procedures also are sources of trade costs, where customs inefficiency is generally high, leading to high border costs and time. 

Interventions that can promote regional integration include establishing a single common external tariff to become a customs union, which is in progress under the AfCFTA. Likewise, under the SADC and SADU framework, it is essential to eliminate unnecessary nontariff barriers, adoption of common rules of origin, harmonization of customs rules and procedures, attainment of internationally acceptable standards, and harmonization of sanitary and phyto-sanitary measures. Finally, strategies to reduce borders costs and time include OneStop Border Posts (OSBP), especially in the busiest border (Beitbridge), automated system for customs data (ASYCUDA), and standard nomenclature from World Customs Union. 

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