Corridors of power or plenty

Food Security11 Mar 2013Bruce Byiers

Corridors and their use of PPPs do seem to offer a range of opportunities – the challenge is to put in place policies that ensure the benefits are spread more widely.

One approach to combating food security has been to promote not only Public Private Partnerships, as mentioned in a previous post, but also to link agricultural production concerns with infrastructure and regional trade. One example of this is the Southern Agricultural Growth Corridor of Tanzania (SAGCOT). In a recent ECDPM-paper we study the degree to which such “corridor approaches” involving PPPs can achieve the ambitious objective of value-chain integration at both the national and regional level.

The study compares the Maputo Development Corridor (MDC), a transport corridor linked with economic development objectives linking Gauteng province in South Africa (RSA), to Maputo, Mozambique, with the SAGCOT initiative. SAGCOT is an ambitious corridor project linking port and transport investment plans with a detailed blueprint to encourage national and international investors. The aim is to promote complementary investments in production through “pilot” farms working with outgrowers, in agricultural inputs such as fertilizers, as well as investments in storage and aggregation facilities, and improved border crossings and transport to get the produce out using a mix of donor, government and private sector finance.

SAGCOT is part of a growing interest in using corridors to address multiple development challenges in Africa through one coherent approach. Often building on colonial era transit and migration corridors, the corridors approach is gaining prominence in Sub-Saharan Africa and elsewhere with the Common Market for Eastern and Southern Africa (COMESA) North-South corridor as a particular example of a priority regional corridor project, while the Southern African Development Community (SADC) also highlights corridors as a key strategic tool for regional integration.

The MDC and SAGCOT represent two different generations of corridor approach. The “old” approach focuses primarily on the following:

  • Improving infrastructures, roads, ports, rail;
  • Improving soft infrastructures, border posts, paperwork, rules and regulations etc along corridors;
  • Some local economic development

The “new” approach then includes additional objectives:

  • Overcoming coordination failures for investment – especially in agriculture;
  • Working with international investors;
  • Aimed at bringing smallholders to international markets;
  • Strengthening regional market integration;

So while the MDC was a “spatial development initiative” (SDI), linking post-apartheid South AFrica to post-war Mozambique, the SAGCOT is a newer approach, at base about linking international fertilizer companies and other international investors to smallholders.

The main lessons drawn from examining the two corridors were as follows:

  • Basic trade flows have improved at the relevant border posts – easing trade flows along both corridors and thereby signifying some degree of success.
  • Both initiatives relied on presidential support, leading perhaps to their success, but also to a sense of “limited beneficiaries” and criticisms of lack of benefit for the poor.
  • For the MDC, RSA transit seems to benefit more through Maputo port use than integration from Mozambican goods to RSA. While not unexpected, this highlights the need for complementary policies to ensure the corridor approach spreads benefits more widely.
  • SAGCOT is predominantly private sector driven. While offering opportunities in terms of momentum and the potential sustainability of the project, this also involves certain risks, given the strong commercial interest in accessing fertilizer and other markets that may override development concerns.
  • Domestic private sector operators are broadly sceptical of this kind of planned approach, particularly SAGCOT and government-designed (CAADP) Investment Plans, referring more to the need for facilitation in their investment.
  • It is extremely complex to work with the vast range of different actors involved in a corridors approach, requiring time, patience and flexibility
  • Value chain integration between countries still appears to depend to a high degree on behind the border, domestic policy issues.
  • Remaining challenges relate to how to get investors to actually invest rather than simply signing up to an initiative on paper?

Overall then, there is a risk that corridors like SAGCOT and the MDC serve only as corridors of power, for political and economic elites, rather than corridors of plenty that really have an impact on food security.

Given the new-found push for agricultural corridors and engaging with international investors in the context of the Comprehensive African Agricultural Development Programme (CAADP), the above observations raise complementary issues that might be addressed through CAADP to ensure greater developmental impact:

  • Given the relatively narrow section of farmers likely to benefit from the corridors approach, additional policies could focus on small-holder benefits and integration measures.
  • A policy focus on formal aspects of regional integratrion neglects the enormous amount of informal regional trade. While informal traders might indirectly benefit from the corridors approach, there may be a more explicit role for CAADO in working with informal traders and smallholders regionally to spread benefits more widely
  • Making the corridor approach more “inclusive” by prioritizing those in the region already and engaging in participatory discussions at the sub-national level and beyond the presidential-MNCs circles.

Corridors and their use of PPPs do seem to offer a range of opportunities – the challenge is to put in place policies that ensure the benefits are spread more widely.