T2: Investment Finance in Agriculture
T1: Commitment to CAADP Process
April 10, 2023Technical Guidelines
April 11, 2023Theme: 2. Investment Finance in Agriculture
Performance Category: PC 2.1 (i) Public Expenditures to Agriculture
Objective of the PC: Allocate enough funds for agriculture in national budgets.
Performance Target: Increase Government expenditures to agriculture as part of national expenditures to at least 10% from the year 2015 to 2025.
Reference in the Malabo Declaration: Malabo Decl. 2(a)
Indicator: Government agriculture expenditure as % of total government expenditure (ţGAE).
Definition / Explanation: As adopted in Maputo in 2003 and Malabo in 2014, AU Heads of State and Government committed to allocate at least 10% of annual public expenditures to agriculture. The AU/NEPAD Guidance Note validated in 2015 on the “Enhanced Measurement and Tracking of Government Expenditure for Agriculture and its Quality in Africa Countries” provides background on the composition of the agriculture sector and constitution of agriculture expenditure, thereby making clearer country progress toward compliance of the 10% agriculture expenditure target, and the rationale for appropriate levels of spending; and (2) the improvements in the quality of spending.
Indicator Computing: For a given year(t), government agriculture expenditure as % of total government expenditure is: ţGAE = GAE * 100 / TGE
Theme: 2. Investment Finance in Agriculture
Performance Category: PC 2.1 (ii) Public Expenditures to Agriculture
Objective of the PC: Allocate enough funds for agriculture in national budgets.
Performance Target: Ensure adequate intensity of agricultural spending by keeping annual Government agriculture expenditure as % of agriculture value added to no less than (or at a minimum of) 19% from the year 2015 to the year 2025.
Reference in the Malabo Declaration: Malabo Decl. 2(a)…. Average of top 10 ratios of GAEAgVA
Indicator: Government Agriculture Expenditure as % of agriculture value added (GAEAgVA).
Definition / Explanation: It is a measure of agricultural spending intensity ratio, which is a more relevant measure of a country’s agricultural expenditure commitment and of placing it within a continent-wide or an international context.
Indicator Computing: For a given year, the Government Agriculture Expenditure as % of agriculture value added, GAEAgVA = GAE * 100 / AgVA
Theme: 2. Investment Finance in Agriculture
Performance Category: PC 2.1 (iii) Public Expenditures to Agriculture
Objective of the PC: Allocate enough funds for agriculture in national budgets. It is also intended to ensure donors are delivering on their pledges and commitment to support national plans
Performance Target: Ensure that Official Development Assistance (ODA) committed to implement the NAIPs is fully disbursed to countries. The target is to have 100% ODA disbursement annually from 2015 to 2025.
Reference in the Malabo Declaration: Malabo Decl. 2(a)
Indicator: Official development assistance for agriculture, disbursement as % of commitment (agODA).
Definition / Explanation: This Indicator measures donor commitments/pledges to ensure that what is committed/pledged is actually disbursed to countries to implement NAIPs. It also measures what is actually disbursed and spent in-country on the investment plans as opposed to what is pledged and spent at donor headquarters or what is spent in country but not aligned with investment plans.
Indicator Computing: For a given year, official development assistance for agriculture, disbursement as % of commitment is: agODA = agODAD * 100 / agODAC.
Theme: 2. Investment Finance in Agriculture
Performance Category: PC 2.2 Domestic Private Sector Investment in Agriculture.
Objective of the PC: Put in place or strengthen mechanisms to attract domestic private investment in agriculture.
Performance Target: Ensure that domestic private sector investment in agriculture as % of agriculture value added is no less than xx% from 2105 to 2025.
Reference in the Malabo Declaration: Malabo Decl. 2(b)…. Average of top 10 ratios of ţDPrPb
Indicator: Domestic private sector investment in agriculture as % of agriculture value added (ţDPrPb).
Definition / Explanation: Private sector Investment is defined as any use of private sector resources intended to increase future production output or income, to improve the sustainable use of agriculture-related natural resources (soil, water, etc.), to improve water or land management, etc. Increased investment is the predominate source of economic growth in the agricultural and other economic sectors. Private sector investment is critical because it indicates that the investment is perceived by private agents to provide a positive financial return and therefore is likely to lead to sustainable increases in agricultural production. It shows the relative domestic private investments in agriculture (DPrIA) to the size of the agricultural sector.
Indicator Computing: For a given year, ratio of domestic private sector investment in agriculture as % of agriculture value added is: ţDPrPb = DPrIA *100 / AgVA
Theme: 2. Investment Finance in Agriculture
Performance Category: PC 2.3 Foreign Private Sector Direct Investment in Agriculture. Put in place or strengthen mechanisms to attract foreign private direct investment in agriculture.
Objective of the PC: Ensure that foreign private direct investment in agriculture as % of agriculture value added is no less than xx% from 2105 to 2025.
Performance Target: Malabo Decl. 2(b)…. Average of top 10 ratios of ţFPrPb
Reference in the Malabo Declaration: Foreign private direct investment in agriculture as % of agriculture value added (ţFPrPb).
Indicator: Private sector Investment is defined as any use of private sector resources intended to increase future production output or income, to improve the sustainable use of agriculture-related natural resources (soil, water, etc.), to improve water or land management, etc. Increased investment is the predominate source of economic growth in the agricultural and other economic sectors. Private sector investment is critical because it indicates that the investment is perceived by private agents to provide a positive financial return and therefore is likely to lead to sustainable increases in agricultural production.
Definition / Explanation: It shows the relative foreign private investments in agriculture (FPrIA) to the size of the agricultural sector.
Indicator Computing: For a given year, the ratio of foreign private direct investment in agriculture as % of agriculture value added is: ţFPrPb = FPrIA * 100 / AgVA
Theme: 2. Investment Finance in Agriculture
Performance Category: PC 2.4 Access to Finance
Objective of the PC: Increase access of smallholder farmers/rural households to and use of financial services for the purposes of transacting agricultural business (purchasing inputs, machinery, storage technologies, etc.)
Performance Target: Ensure that 100% of men and women engaged in agriculture have access to financial services to be able to transact agriculture business by 2025
Reference in the Malabo Declaration: Malabo Decl. 2(c) and SDG goal1, 1.4
Indicator: Proportion of men and women engaged in agriculture with access to financial services, % (ţAgFs)
Definition / Explanation: Use of financial services is considered critical for increasing smallholder agricultural productivity. Financial services include savings accounts, credit, digital payments, microfinance, and insurance. The evidence is clear that women are less likely than men to use any of these services. Continued dependence on cash perpetuates the marginalization of the poor and inhibits their ability to take advantage of economic opportunities within and outside of agriculture as well as to absorb shocks without falling deeper into poverty. Men and women considered in this profile are any household member of 15 years and older.
Indicator Computing: For a given year(t), the Proportion of men and women engaged in agriculture with access to financial services, % is: ţAgFst = NfsAg *100/ NtAg