African governments are currently implementing the Comprehensive Africa Agriculture Development Programme (CAADP), a pan-African policy framework aimed to improve and grow the continent’s agricultural sector. Among other positive actions, this framework requires for African countries to allocate at least 10% of their public expenditures to the development of the agricultural sector.
To that end, African governments have instigated a series of agricultural subsidies programs, to facilitate the implementation of proven beneficial agricultural technologies, such as drip irrigation. These agricultural subsidies provide a wealth of opportunity for businesses and entrepreneurs of all sizes, that seek to start a viable business in a field with tremendous potential, such as the production, supply and maintenance of drip irrigation products.
How agricultural subsidies can help
Currently, the available agricultural subsidies have twofold benefits for businesses, since they provide financial incentives regarding both production and consumption of drip irrigation products. From the business’s standpoint, they provide the manufacturer with financial incentives for purchasing equipment, setting up and lowering the operational costs of a drip irrigation production facility. For the farmers, they provide financial incentives to purchase drip irrigation equipment, effectively creating a large market potential for drip irrigation products.
Top agricultural subsidies
The agricultural subsidies opportunities differ between each country, since each country implements subsidies programmes based on its own specific needs. Some notable, non comprehensive examples of countries providing subsidies opportunities are mentioned below.
Ethiopia
While the majority of Ethiopia’s population engages with the agricultural industry, only 3.7% of its arable land is irrigated, and the majority of farmers depend on rains from the period of July to August for watering their crops, resulting in a single annual harvest. This has led to the creation of government programs that provide financial aid regarding drip irrigation systems, including tax exemption and eliminating production equipment import duties.
Cameroon
The combination of rainwater irrigation based agriculture and recent erratic climate, make Cameroon a prospect market for drip irrigation products while having access to an overall total of $106 million agricultural subsidies programs.
Malawi
Agriculture accounts for the larger part of Malawi’s economy, while almost entirely depending on rain-fed irrigation. These conditions have led Malawi’s Ministry of Agriculture, Irrigation and Water Development to issue a National Irrigation Policy, which among others includes a multitude of financial incentives for both manufacturers as well as end consumers of drip irrigation products.
Nigeria
Even though Nigeria is the most populous African country and among the top 30 largest economies in the world, its agriculture is mostly irrigated by rainfall. This is why the Nigerian government has now approved hundreds of millions for financing the growth of its agricultural sector.
Ghana
Roughly one fourth of Ghana’s gross domestic product depends on agriculture. With a stable rate of GDP increase and poverty decrease, Ghana’s growth trajectory and access to major subsidies, financing programs and incentives, make it an excellent prospect market for drip irrigation products.
Benefit from available subsidies & opportunities
Apart from government issued agricultural subsidies, there are also grants, as well as private organizations and investment groups, some even looking to specifically finance the drip irrigation industry at emerging markets.
For comprehensive and detailed information on financing opportunities and agricultural subsidies in your area, download the recently issued DRTS Guide to Opportunities and Subsidies for Drip Irrigation in Africa.
