Large scale irrigation investments in sub-Saharan Africa: Is big beautiful?

Interesting that you don't mention climate change as a driver for irrigation. FCDO (DFID) largely stopped financing irrigation in the 1980s, but has recently restarted under the name of ‘adaptation’, and many others have started reinvesting. It is easy to see why – temperature and rainfall patterns are changing and agriculture is suffering, and hence irrigation is widely promoted. Although there are many other stronger influences which lead to underperforming agriculture, these are glossed over – particularly as there are a new group of stakeholders promoting irrigation who are unfamiliar with the past problems and are eager to promote what seems to be an obvious solution. Politicians and irrigation agencies are only too willing to take advantage of this change of heart. It is sometimes disheartening to hear conversations which could easily have taken place in the 1980s and for the same mistakes to be made, but new ideas are emerging. Whether this is sufficient to make large-scale irrigation viable is debateable, but I am sure many governments will keep trying.

This is a novel and interesting way to re-evaluate viability--take a project that has actually succeeded and re-evaluate using today's costs and benefits, knowing that the outcome is probably at the top of the range actually achievable more widely.

A couple of points: the author does not mention the dissent rate used. If it's the "usual" 12% that the World Bank used to use, that is probably well above today's cost of capital.

Second, the piece suggests that small scale and "farmer led irrigation" may be a better option. Most of the promotion of FLI that I have seen is rather like calling the clearing of the Amazon rainforest "farmer led agriculture".

Does the author have a view on FLI?

I couldn't agree more, Doug. These large-scale build-neglect-rebuild infrastructure projects burden next generations with debts and dependencies, on top of climate change impacts. They are corruption-prone by design (inflated proposals and spending pressure once approved). Obviously, investments in agriculture are key in a continent where most people are food producers, that still needs to import food. There are so many better ways for governments and financing institutions to invest, also large sums as in transport and roads. And, yes, the 'smaller' long-term investments in high-tech but low-cost water technologies, energy sources (like solar), technical capacity development of both women and men, bottom-up, transparent and accountable institutions, market development including protection against food dumping, etc.

Great piece, indeed. There are lessons for those countries which have not yet started large scale agricultural projects.

In this region, rainfall is highly variable, drought is common, low food production, and most people live below the international poverty line made the author raising this brilliant motto: Large scale irrigation investments in sub-Saharan Africa, where the irrigation and agricultural development, proposals to expand irrigation to increase productivity and reduce poverty must be developed for the sake of the continuity of life in this part of the world. However, Large-scale schemes are not the solution. Large-scale schemes is not lucrative but location-bound. Because of their cost and complexity, large dams are no longer built for one purpose alone. Any dam suitable for storing the large quantities of water required for large-scale irrigation will have to double as a hydroelectric power plant. Thus, the reservoirs considered here for irrigation use
are those identified by a companion AICD study on power sector investment needs as being economically viable for power system development within the next decade. Because these schemes are already deemed viable for hydropower generation alone, the irrigation component need not contribute to the capital cost of dam construction. Therefore, the investment costs of large-scale irrigation development may reflect only irrigation-specific infrastructure, such as distribution canals and on-farm systems. The irrigation potential of areas downstream from hydroelectric dams could be evaluated according to a wide range of agro-ecological considerations and involved in next studies. Besides, I hoped if the author has linked the large-scale land acquisition with corporate social responsibility (CSR) and introduced a clear methodology to avert the impact of climate change on irrigated area and investment return.

First, thank you to everyone who has commented so far. Here I will respond briefly and selectively to some points made in the comments.

Simon Howarth, note that this blog is narrowly focused on whether investing in new large-scale irrigation makes economic sense. A broader analysis is still needed. My hypothesis would be that including an analysis of climate change impacts on rainfall and temperatures, social and environmental impacts, and the often-observed need to rebuild schemes long before their “economic life” is included would strengthen the argument that these are not the best use of scarce capital.

Chris (which Chris?), I am not an economist, my co-authors are, but my understanding is we used 8% which is the current Bank assumption. We actually tested several IRR scenarios. See the paper. One of my co-authors may also respond on this point. And I do have a position on “farmer-led irrigation”: overall, providing policy and institutional support to enable farmers to make their own investments make a lot of sense. And I believe an analysis of actual cases will show that in most cases, farmers invest to increase the productivity of existing cultivated land, not to turn forests into farmland. So, it is not “clearing the Amazon” in most cases.

Barbara van Koppen and I are long-time colleagues and friends, and in this case, we agree 100%. Thank you, Barbara and also Salam Abdulrahman.

Loai Aljerf, thank you for raising the issue of large dams. However, the scheme we analysed, Mwea in Kenya, has no dam associated: it is a run-of-the-river scheme. Therefore, your point that large dams justified by other uses can support large scale irrigation does not work: even with no dam costs, Mwea is barely viable economically.
Finally, I should note that in addition to being published by JICA, a revised version of the paper was recently published by the Journal of Development Studies. We are waiting for the editors to correct an error they introduced into Table 2, but here is the link for those interested: https://doi.org/10.1080/00220388.2020.1826443.

I'm afraid that this note (and subsequent comments) fail to consider the different elements that comprise an 'irrigation scheme' and their functions. To be simplistic, one key element is a storage component to ensure that there is a reliable flow of water available. Another element is the off-take and transport of the water from that source to the field edge (for convenience sake).

Given SSA's often extreme climate variability, there is substantial benefit from building a dam to store water to enable reliable flows (and let's not go into the use of World Bank discount rates which will immediately render such a scheme financially unviable even if the storage functions for a century because 12% renders any benefit beyond the 1st decade almost completely valueless).

Once that reliable flow is available, it is quite possible - indeed common - for smaller scale schemes to be organised or self-organise to use that flow. So the notion that there has to be a single scheme which covers all activities is not particularly helpful.

Consider the impact of the Aswan High Dam, completed in Egypt in 1970. It was not part of a large irrigation project. But it has enabled small local initiatives to achieve huge increase in production and livelihoods without which Egypt would have collapsed socially and economically. How do we value that contribution? By simply looking at the increased cotton, rice and sugar production? By the more recent transformation of the Egyptian horticultural sector?

Let's at least distinguish between the water resource investment required to enable irrigation development and the subsequent water distribution investment and take a wider development perspective to our project appraisal.

This is not a competition between engineers and rural sociologists. It is about viable strategies to address the broader SSA challenge of reducing farmers' risks by ensuring a reasonably reliable water source. That will sometimes require large infrastructure investments to achieve. And of course if there are situations where small schemes don't require such investment, they should proceed. Indeed, in many parts of the continent they do, through local initiative - which reinforces the point that the large infrastructure is an enabling investment that can transform a rural economy and should be considered and funded as such.

1.Why large-scale irrigation development is back?
Global Food Crisis: In 2007-8 when the global food crisis occurred and international food prices were soaring, food importing countries were the most affected by malnutrition and poverty. Subsequently, local food production in these countries has become a national security issue. In addition to feeding the growing population, these countries needed to produce enough food to protect their citizens specially the poor against food price increase in the international market.
Climate Change: The economies of most African countries is dependent on climate-sensitive sectors like agriculture. Climate change poses a serious challenge to sociio-economic development of countries particularly for SSA. Increased precipitation intensity and variability are projected to increase the risks of drought and flooding in many areas particularly in Africa. This is expected to lead to decreased food security and increased vulnerability of poor rural farmers. Irrigation development is one of key adaptation measure to mitigate the negative impacts of climate change.
Definition: For the purpose of common understanding, I suggest defining large-scale irrigation is beneficial. In India, probably 10,000 ha is considered as small or medium scale, in Ethiopia from 3000 ha it is considered as large scale, and other countries may have their own definition. In this paper which one are we referring to?

2. Cost of irrigation development
IWMI’s 2007 research findings show that overall unit costs of irrigation development investment in SSA are significantly higher than other regions. I tend to agree with the research finding because often of the times irrigation development sites in SSA are found in remote areas where there are no physical, economic and social infrastructures. The cost of building these services are lumped together with the cost of irrigation development which inflates the unit cost of irrigation development. Later, irrigation development also brings unforeseen benefits like trade, education, creation of towns, etc. triggering growth.

3. Success stories:
I acknowledge that there are significant failures of large-scale irrigation development around the world however, we must not forget that there are also some success stories. To mention some, the Wonji Sugar Estate (7050ha) which started in 1954 in Ethiopia still contributes to the economy of the country. Subsequent large-scale irrigation developments in Ethiopia such Metehare (9920ha), Fincha (6800ha) Sugar Estates producing 261,000 tons of sugar is substituting import. Tendaho cotton plantation (33,000ha) supplying 8,370.4 MT of seed cotton to the local textile industry, offering employment, since 1960. Similar success stories of Illovo sugar estates in Malawi is another evidence creating employment and supporting the local economy. The common factor in all these schemes is that they produce cash crops have processing plants.

Conclusion: I understand the viewpoint of the author to come up with the conclusion that SSA governments and their financial partners must abandon projects to construct new large-scale irrigation schemes however my point of view is that;

large scale irrigation could continue to contribute to the socio-economic development of countries if appropriate management model is put in place and private sector is facilitated in marketing and value chain approach is followed as demonstrated above.

In conclusion, in my opinion instead of abandoning large irrigation development in its entirety, it is advisable to find the right development model including fighting below-the-radar opportunities that will undermine the development objective of irrigation development. In this regard, the role of research and development is of paramount importance to come up with a right model.

In sub-Saharan Africa, the land holding size is commonly very small, and most agricultural producers are subsistence farmers with small holdings, often broken into several plots. The land is either a highland with rugged terrain or a flat land stretched for long distances. Usually availability of water is restricting irrigation unless in some places where there are perennial rivers or impounded water. Groundwater potential in many places is low and it is very difficult to use it used for commercial farming.

Small patches of irrigated commercial farms could be possible in some places while localized small sized farms need to be continued in some other places. It is very useful to expand small scale irrigation rather to improve productivity of por households so that they can grow more than once than they are doing usually confined to the rainy season.

In low-land areas with the construction of irrigation water supply systems there could be a possibility for commercial farms, but the development of commercial farms could have a negative effect on the livelihood of people where their lifestyle is still under development. Commercial farms could affect people’s life (unless they are established in lands that are not occupied so far. Mind you that open land may not be available in sub Saharan Africa as it may be occupied once in a year (pastoralists move during the year from one place to the other for search of pasture and water for their cattle). Commercial lands could displace communities from their ancestral lands while they don’t have coping mechanism to adapt themselves to the new situation nor they don’t have skill to be part of the new life style if at all they are able to secure jobs in the commercial farms or associated Agro-industries.

Therefore, I contend that “Big is not beautiful in Sub-Saharan Africa” in most cases and introduce/ expand commercial farms. Instead small-scale irrigation (that could also be commercial) could be more useful.

just to clarify my earlier comment - I don't personally think that climate change justifies the renewed interest in large-scale irrigation, but I do think it is an important part of the reason that many funding agencies which had shunned irrigation in the recent past are moving back into the sector. And because the new stakeholders are not so familiar with the past problems, some of the same mistakes are being made again (albeit my recent knowledge is purely of South Asia, not SSA).

I am responding to the four most recent comments on the blog; I thank all the commenters for taking the time to share their views.

Starting with Mike Muller: He argues in favour of public investments in water infrastructure to make water available which would enable creating smaller scale schemes. I think this is a very interesting idea; but it is a far cry from the typical large public irrigation scheme built and managed by government agencies to provide irrigation services to thousands of small-scale farmers. It is the latter which are so problematic. His suggestion is well worth exploring – I am not aware of any examples in Africa outside of South Africa (which he refers to). But the idea reminds me of what the huge canal systems in the Indus and Gangetic plains have become: while they were originally constructed to provide water to millions of small farmers, they also contributed to developing groundwater supplies, enabling the pump revolution: their main function today is often simply refilling the aquifer.

I am grateful to Mekonnen Lulsegad for his comment. He used to work for the Ethiopian ministry in charge of large-scale irrigation and currently works for the African Development Bank. He argues in favor of continued investment in large-scale irrigation schemes but emphasizes the importance of getting the model right. His examples are all large commercial estates (sugar and cotton). While I believe he is correct that these are often successful, one must ask at what cost: did they displace people who used to use the land? If they are providing water to many smallholder farmers, are these farmers prospering and improving their lives, or simply making a marginal living? Would the same funds invested in small-scale schemes have had a better return? Anyway, these are also very different from public schemes delivering water to thousands of smallholders.

Getachew Hailemichael reviews some of the constraints to developing large scale irrigation in SSA and concludes small schemes make more sense.

Simon Howarth re-emphasizes that responding to climate change is a major rationale for recent irrigation developments but wonders if newer people in charge are aware of the lessons of the past. I agree that climate change is used as a justification for investing in irrigation but would argue that other, deeper, vested interests are often the real drivers. I do not see evidence that the lessons from the past, especially the importance of getting the policies and institutional frameworks right, have been learned. International finance institutions have been investing for decades in projects justified by claiming they will strengthen public irrigation management institutions, make them more effective and service-oriented, etc. with little to show (in Asia as well as Africa). In 1981, while working for USAID, I wrote a scathing critique of a USD 500 million irrigation project in Pakistan that claimed it would reform the provincial irrigation departments etc. etc. Well, all my predictions that the money would be spent but no reforms implemented were confirmed 5 years later by an evaluation. And little has changed in the decades since.

I do agree that climate change is a very important driver of the renewed interest in large-scale irrigation investments. The way in which international investment institutions are designed definitely favors large-scale irrigation infrastructure, besides that it offers a relatively straightforward way for national governments to gain both funds and votes. However, these aspects have not changed in recent decades, so the renewed interest is definitely triggered by the effects of climate change (next to the global food crisis, as rightly mentioned by Mekonnen Loulseged). As a sidenote, I would guess this renewed interest will be accelerated by the focus on local food production induced by the current pandemic.

It is therefore the more concerning to see that the lessons of past failures seem to get forgotten again. Large-scale irrigation infrastructure investments are not necessarily wrong or right, but indeed depend on the right model. In some areas large-scale infrastructure is essential to make year-round production possible, and can prove to be economically viable in combination with other uses (e.g. hydropower). Besides this, investments in agriculture should be aimed at facilitating the FLID processes (by strengthening the supply side, market development, providing finance solutions, etc.).

The challenge is to proof that investments in this enabling environment also make economically more sense than building large irrigation schemes, and to convince policymakers to make those investments. These can also be ‘big and visible’, for example roads or cold storage facilities, so reframing all that is needed to accelerate FLID can be part of the process to change the focus of investments.

I think one of the reasons a significant amount of financial resources is spent on large scale irrigation is that there are areas (sites, locations) where it is technically possible to do large scale irrigation and where it is not possible to do small scale irrigation. There are such places and it is often as simple as that. Often, once these places are identified, grossly characterized and that someone (usually an engineer) has calculated how much grain more it would generate, it doesn’t take much more to generate enthusiasm in many people, and lasting enthusiasm can lead to decision and action... It isn't so much like this anymore because decision makers rely more on holistic approaches to irrigation development, encouraged by development partners (not all). It is a bit like dam projects as described in “development projects observed” by Albert Hirshman who quite convincedly writes that the possibility of a dam is its justification. On disbursement, I know of several cases / programs in West Africa where disbursements are quicker for small scale irrigation (inland valley bottom, water spreading weirs, village irrigation schemes of a less than 50 ha) because: (a) there aren’t significant safeguards issues, (b) it is equitable – a large programme with many schemes (as you refer in your blog) allows to prevent rivalry between communities, (c) they are rather simple and (d) from trial and errors in the past, implementation modalities are well streamlined, which allows faster action on the ground. It is not to say that everything works but I am convinced that quality in implementation and mechanisms to verify it materializes in the field is (one of) the way(s) to go. This calls for a lot of capacity building and institutionalization. This is what the Sahel Irrigation Initiative Project is trying to do. FLID is indeed a buzz word but the fact that it has become fashionable and is being advertised, notably by FLID diagnostics financed by the World Bank helps sensitize the officials in countries and opens them to different ways of financing irrigation than large scale irrigation. And this is what we are trying to do.

Global needs for food and the related recent increase in food prices made large irrigation investments in Sub-Saharan Africa profitable. Comments and arguments for or against this kind of projects are very interesting in this discussion.
However, I doubt that fair water-pricing, both in surface and groundwater is taken into consideration during the cost-benefit evaluation of such projects. Large irrigation investments require huge volumes of surface and mainly groundwater that leads to ecological water flow reduction and aquifer depletion. On top of water quantity problems, diffuse pollution of groundwater from fertilizers and pesticides is at the origin of aquifer deterioration and problems in public health from groundwater supply. According to EU WFD in this case the resource cost and environmental costs should be taken into consideration by use of the cost recover calculation. Even if the agricultural water pricing is correct, social reasons and weak water governance make water conservation and environmental protection extremely difficult.
Climate change leading to rainfall reduction and extensive droughts in African regions creates further problems for water security and ecosystem preservation. During the recent IWRA’s first International online conference, results from GRACE 2012-2018 satellite observations groundwater depletion in Southern Africa and reduction of water availability in many regions around the world. See the presentation of GRACE results by Prof. Jay Famiglietti at the opening session.
Also the Μiddle-East aquifer depletion as the origine of the Syrian crisis can be shown by BRACE(see pp. 59-60 in Ch. 3 of the book on Transboundary Hydro-governance:
In conclusion, large or small irrigation projects should be based on a resilient use of water and groundwater without violating the natural law of the hydrological water cycle. Water insecurity will certainly lead to food reduction and environmental degradation.

1) https://iwraonlineconference.org/?fbclid=IwAR3c3GhUhiNEyxxoEo3MY73NYV3C9XZCXhv6p6XXomRJv31g0x7f7giugOQ
2) https://link.springer.com/book/10.1007/978-3-319-78625-4

First, thank you Thijs de Klein, Pierrick Fraval and Jacques Ganoulis for your comments.

De Klein suggests responding to climate change may be the key driver of investments in large scale irrigation, and in some contexts large schemes may be the only option. I am sure responding to climate change is indeed a major concern; whether constructing large publicly funded and managed irrigation schemes is the most appropriate response in the long term is an entirely different question. I would argue that the same large amount of funds could probably be used for other investments that would benefit more people and be equally or more effective adaptations to the impacts of climate change. I agree there are areas where smaller scale or individualized irrigation are not feasible; but does that man therefore we must construct large schemes there? The land is likely being used by people and we need to question what would be the best option for those people over the long term.

Fraval, who is a former colleague of mine at IWMI and now works at the World Bank on irrigation, suggests the main driver is the availability of technically feasible sites for large scale irrigation, which creates a momentum or “enthusiasm” that leads to making such investments. That is an interesting idea, somewhat similar to de Klein’s that some sites cannot be exploited with smaller scale irrigation. But Fraval’s intervention, if I have understood it correctly, is more nuanced: he does not necessarily say that this enthusiasm for large investments is the optimum option, because he shifts gears and notes that investments to support farmer led irrigation development (“FLID”) are growing. De Klein also comments favorably on FLID.

I interpret Ganoulis’ comment to be from the perspective of preservation of the environment. He seems to be suggesting that cost benefit analysis (“water pricing”) ignores the environmental impacts of mobilizing large amounts of water for irrigation, which will cause pollution and deplete aquifers. Climate change leading to reduced rainfall is exacerbating the depletion of aquifers. I believe this is an important but somewhat separate issue, as in most cases large-scale irrigation is mobilizing surface water from rivers (though this does have impacts on connected aquifers). Balancing food security and water security is a huge challenge that he refers to: it is indeed a central challenge for sub-Saharan Africa over the next few decades.

I suggest that policy makers and their investment partners need to focus clearly on identifying the best options for achieving food and nutrition security, reduction of poverty, and equitable but reasonably rapid economic growth while also preserving healthy and productive natural resources. Possible solutions will vary among and within countries. Irrigation development is but one of many options, albeit in many areas critically important. Given the scarcity of both financial and human/ institutional resources, large-scale investments in publicly constructed and managed irrigation schemes may not be the optimum solution, as the blog argues. But investing in the infrastructure needed to encourage farmers to invest, including in some places publicly funded water infrastructure as Mike Mueller suggested in an earlier comment, should be high on the list of options.

This is a novel and interesting way to re-evaluate viability--take a project that has actually succeeded and re-evaluate using today's costs and benefits, knowing that the outcome is probably at the top of the range actually achievable more widely.

A couple of points: the author does not mention the dissent rate used. If it's the "usual" 12% that the World Bank used to use, that is probably well above today's cost of capital.

Second, the piece suggests that small scale and "farmer led irrigation" may be a better option. Most of the promotion of FLI that I have seen is rather like calling the clearing of the Amazon rainforest "farmer led agriculture".

Does the author have a view on FLI?

If any one wants to discuss further, can reach me through marketing agency I am always glad to discuss on such topics.

I thought the discussion is closed. Anyway, first, please read the paper at Journal of Development Studies. We used a much lower interest rate to re-do the calculations and found it did not change the result. As to FLI, I think you have a wrong impression: in most cases, farmers invest in irrigation for land they already cultivate, thus intensifying production on the same land, rather than bringing new land into cultivation.