With issues highlighted by El Niño such as food and water security, poor infrastructure and lack of diversification in economies fresh in everyone’s minds, opportunities exist to highlight the importance of these issues and attempt to address them. Governments in collaboration with the DFIs and the private sector can start to prepare themselves for El Niño’s return.

Opportunities for DFIs and public-private partnerships

It is quite clear that a multi-pronged strategy to respond to the El Niño-exacerbated humanitarian challenges and economic difficulties cannot be funded by African governments alone. Governments have been seeking and receiving financial and technical assistance to overcome these obstacles, with many of the most vulnerable mainly reliant on international agencies. This presents a number of opportunities for developmental finance institutions to plug the investment gap where infrastructure projects are needed. Projects may include increasing dam and lake capacities, or providing alternatives to hydroelectric power (e.g. in Zambia and Zimbabwe).

Infrastructure needs also extend to the maintenance and extension of storage and distribution networks, as seen in Ethiopia. Public-private partnerships will play a more important role in strengthening the physical infrastructure scaffolding, representing an opportunity for the private sector to become involved.

Commercial opportunities

Opportunities, from a technical support perspective, also exist for specialist companies to approach governments and provide assistance in improving the viability of commercial farming. For instance, where farming is highly fragmented, consolidation adds efficiencies of scale and scope, increasing productivity and diversifying revenue streams. More sophisticated methods of farming and coordinated efforts to diversify would result in an agricultural sector better able to withstand prolonged adverse weather conditions. These diversification efforts are often presented in previously unexplored areas. Aquaculture is one such example: R 338 million (USD 23 million) in private sector investment has been committed to supplementing the R106 million (USD 7 million) in government investments in nine aquaculture farms, which produce cob, trout, abalone and oysters.

Innovative solutions in the micro-financing sphere, given the limited access to formal funding mechanisms for many rural farmers and poor households, are likely to pay dividends, especially over the longer run.

While many African governments have historically had an aversion to genetically modified seeds (which are drought and pest resistant), the current food security crisis may well see them soften their stance. The South African government has already relaxed some of its tough rules on genetically modified crops, as it seeks to encourage the US to produce for the South African market. Seed-producing companies, which are able to provide cheaper alternatives to the patent-controlled seeds that are currently marketed, would find themselves leapfrogging the incumbent competitors.