Agribusiness in Africa: a growing concern
Africa is home to some 60 percent of the world's arable land. Yet, it must import much of its food. In fact, Africa been the most import-dependent continent for several decades, while about one third of its population suffers from hunger and malnutrition. Recently, Nigeria's Minister of Agriculture, Akinwumi Adesina, described the situation as "senseless." And it's expensive. According to the Director-General of the Food and Agriculture Organization of the United Nations (FAO), José Graziano da Silva, the cost of food imports in Africa exceeds $US50 billion per year. It has not helped that the population has been growing more rapidly than has food production since 1993.
Agriculture is critical to Africa. Two thirds of its people depend upon it to survive. The sector is responsible for more than one quarter of GDP in most countries, agricultural products account for about 20 percent of international trade and they are one of the main sources of raw materials for industry. Why then is Africa unable to feed herself and must even rely on international food aid?
There are several reasons for this state of affairs. First of all, agriculture has long been neglected on the continent. Today, despite the best of intentions, many countries fall far short of spending 10 percent of their budget on the agricultural sector (as has been advocated by the African Union for several years). We also know that many countries have swapped oil for soil. Nigeria is a prime example, even though it is seeking to reverse the trend. Other known causes: poor access to technology, countless untapped land and water resources, small farms, lack of access to affordable seeds, fertilizers and pesticides, poor erosion controls and lack of access to credit. The consequence: a very inefficient "system" with the lowest yields in the world. For example, grain yields in Africa are about 1 ton per hectare, while the world average is 3 tons. According to the UN Economic Commission for Africa (UNECA), agricultural productivity in China has increased 133 percent since 1990. In Africa, it has increased by 38 percent over the same period.
What is to be done to remedy this situation? Productivity must be increased exponentially and that means more mechanization. The current situation is untenable. In Sub-Saharan Africa, agriculture is powered as follows: 65 percent by human muscle, 25 percent by animal muscle and 10 percent by internal combustion. At one time, the African farmer fed an average of two people. Today, he must meet the needs of four or five people. Beyond investments required for better farming methods, the World Bank (WB) recommends that barriers to regional trade in food commodities be reduced, or removed. This would allow food to flow more freely between producing countries and those where there are shortages. Barriers include export and import bans, variable import quotas and tariffs, restrictive rules of origin and price controls.
The solutions to help Africa achieve self-sufficiency and to take full advantage of the enormous global market for food are waiting to be triggered. The WB says agribusiness on the continent could be worth more than 1 trillion dollars by 2030. Nigeria's Adesina says a change of perception is required: "We must first understand that this is not a development activity or a social sector, but a business." This revolution in attitudes is critical because it will allow agriculture to regain its importance. Only then will the sector realize its full potential as a vector for increased revenues, job creation and more aggressive competitiveness on world markets.
- Sunday, 01 February 2015
- Written by Malam Gerba