Further expansion of Africa’s irrigated areas would be profitable because of the important boost it would give to agricultural productivity.
A further 1.4 million hectares of irrigation could be developed based on current or planned dams associated with hydropower development, if investments of $0.3 billion a year in distribution of agricultural water could be sustained over the coming decade (see figure). An additional 5.4 million hectares would be viable for small-scale irrigation, involving a further investment of $1.8 billion a year over the next decade.
IIn general, economic returns on small-scale schemes are substantially higher (at around 25 percent) than those on large-scale schemes (which average 16 percent). These results are highly sensitive to the assumed costs of irrigation development: $3,000 per hectare for water distribution from existing large-scale dams and $2,000 per hectare for on-farm investment under small-scale schemes. With higher costs, the number of viable hectares declines sharply. In most cases, irrigation is found to be viable only when high-revenue-yielding crops are cultivated that generate revenues of at least $2,000 per hectare per year. These include traditional cash crops (such as coffee) and higher value food crops (such as horticulture). In few areas can irrigation investments be justified to grow staple food crops.
Investment potential for dam-based and small-scale irrigation