Harare — THE African Union and the United Nations have castigated international donors for focusing on social issues without giving due attention to the productive sector, particularly agriculture.

According to an Economic Report on Africa launched last Thursday in Addis Ababa, Ethiopia, jointly published by the UN Economic Commission for Africa and the AU Commission, productive sector aid declined to 8 percent between 2002 and 2006 while social sector aid rose to 70 percent over the same period.

"This is indeed worrisome, given the importance of productive capacity development for the achievement of the Millennium Development Goals.

"In this regard, donors should ensure that increased aid is allocated to productive sectors and other activities with greater impact on employment creation and poverty reduction," reads part of the report.

The report called for special attention to agriculture since Africa is heavily dependent on this sector for providing employment, generating economic growth, foreign exchange earnings and tax revenue.

"Modernising agriculture is crucial to development and industrialisation in Africa, to food security, sustained poverty reduction and integration of Africa in the global economy.

"Given the recurrent food shortages and slow progress in poverty reduction, the continent needs sustained investment for agricultural transformation in agricultural production systems, agricultural research and extension services," the report noted.

African countries were urged to use yield-enhancing practices and technologies, increase investment in soil and water conservation, and improve marketing and rural infrastructure.

The report, which was launched at the UN, was compiled under the theme "Developing African Agriculture through Regional Value Chains".

"The impact of the global financial crisis and economic recession has already resulted in lower demand for Africa's exports and a sharp decline in commodity prices.

"At the same time, a projected decline in capital inflows to Africa, including aid, foreign direct investment and remittances, will accentuate the impact of the global credit crunch," the report said.

However, to mitigate the impact of the evolving crisis, African countries needed sound domestic policies as well as continued aid flows and targeted financing facilities from international financial institutions targeted at the productive sector for the continent to achieve its MDGs.

The report said economic growth in Africa declined to 5,1 percent in 2008 and was projected to fall sharply in 2009.

"Despite high commodity demand and prices in the first half of 2008, continued sound macro-economic management and commitment to economic reforms, increased domestic investment and productivity, recent debt write-offs, private capital flows, increased non-fuel exports and consolidation of peace in some parts of the continent, the global financial crisis and recession are adversely influencing medium-term growth prospects in Africa."

The report comes at a time when Government has been investing heavily in agriculture through schemes like the Farm Mechanisation Programme -- an area that most non-governmental organisations in the country tend to ignore.