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Africa Can Feed Itself, Earn Billions, and Avoid Food Crises by Unblocking Regional Food Trade

Posted by Business in Ghana on October 25, 2012

WASHINGTON, October 24, 2012 A new World Bank report says that Africas farmers can potentially grow enough food to feed the continent and avert future food crises if countries remove cross-border restrictions on the food trade within the region. According to the Bank, the continent would also generate an extra US $20 billion in yearly earnings if African leaders can agree to dismantle trade barriers that blunt more regional dynamism.  The report was released on the eve of an African Union (AU) ministerial summit in Addis Ababa on agriculture and trade.

With as many as 19 million people living with the threat of hunger and malnutrition in West Africas Sahel region, the Bank report urges African leaders to improve trade so that food can move more freely between countries and from fertile areas to those where communities are suffering food shortages. The World Bank expects demand for food in Africa to double by the year 2020 as people increasingly leave the countryside and move to the continents cities.

According to the new reportAfrica Can Help Feed Africa: Removing barriers to regional trade in food staples rapid urbanization will challenge the ability of farmers to ship their cereals and other foods to consumers when the nearest trade market is just across a national border. Countries south of the Sahara, for example, could significantly boost their food trade over the next several years to manage the deadly impact of worsening drought, rising food prices, rapid population growth, and volatile weather patterns.

With many African farmers effectively cut off from the high-yield seeds, and the affordable fertilizers and pesticides needed to expand their crop production, the continent has turned to foreign imports to meet its growing needs in staple foods.

Africa has the ability to grow and deliver good quality food to put on the dinner tables of the continents families, said Makhtar Diop, World Bank Vice President for Africa. However, this potential is not being realized because farmers face more trade barriers in getting their food to market than anywhere else in the world. Too often borders get in the way of getting food to homes and communities which are struggling with too little to eat.

The new report suggests that if the continents leaders can embrace more dynamic inter-regional trade, Africas farmers, the majority of whom are women, could potentially meet the continents rising demand and benefit from a major growth opportunity. It would also create more jobs in services such as distribution, while reducing poverty and cutting back on expensive food imports. Africas production of staple foods is worth at least US$50 billion a year.

Moreover, the new report notes that only five percent of all cereals imported by African countries come from other African countries while huge tracts of fertile land, around 400 million hectares, remain uncultivated and yields remain a fraction of those obtained by farmers elsewhere in the world.

Poor roads and high transport costs blunt progress

Transport cartels are still common across Africa, and the incentives to invest in modern trucks and logistics are weak. The World Bank report suggests that countries in West Africa in particular could halve their transport costs within 10 years if they adopted policy reforms that spurred more competition within the region.

Unpredictable trade policies a liability

Other obstacles to greater African trade in food staples include export and import bans, variable import tariffs and quotas, restrictive rules of origin, and price controls. Often devised with little public scrutiny, these policies are then poorly communicated to traders and officials. This process in turn promotes confusion at border crossings, limits greater regional trade, creates uncertain market conditions, and contributes to food price volatility.

Establishing a competitive market will enhance food distribution networks

A competitive food market will help poor people most, the report notes.  For example, poor people in the slums of Nairobi pay more for their maize, rice, and other staple food than wealthy people pay for the same products in local supermarkets. The report underlines the importance of food distribution networks which in many countries fail to benefit poor farmers and poor consumers.

 The key challenge for the continent is how to create a competitive environment in which governments embrace credible and stable policies that encourage private investors and businesses to boost food production across the region, so that farmers get the capital, the seeds, and the machinery they need to become more efficient, and families get enough good food at the right price. said Paul Brenton, World Banks Lead Economist for Africa and principal author of the report.

 World Bank Group support for trade and agriculture in sub-Saharan Africa

The World Bank is recognized as a key source of knowledge on trade policy issues, analysis and investments for trade-related infrastructure at the country level.The institutionsagriculturesupport for Africa has grown significantly over the past decade. Concessional lending totaled US$1.07 billion in Fiscal year 12 (July 11-June 12): a fourfold increase from FY03.  The share of trade-related lending in total Bank lending has also grown from an average of two percent in FY03 to five percent in FY12. New trade-related commitments in FY13 are expected to increase to US$3 billion, 70 percent of which will go to Africa.

Since 2008, World Bank Group lending for agriculture and related sectors in sub-Saharan Africa total approximately US$5.4 billion.

 To see the English version of Africa Can Help Feed Africa report in full, visit: http://siteresources.worldbank.org/INTAFRICA/Resources/Africa-Can-Feed-Africa-Report.pdf

To learn more about the World Banks trade work in Sub-Saharan Africa visit:www.worldbank.org/afr/trade

 

Contacts

In Washington:

Phil Hay +1 (202) 473-1796 and cell +1 (202) 409-2909, phay@worldbank.org

Stevan Jackson+1 (202) 458-5054 office and cell +1 (202) 437-6295; sjackson@worldbank.org

To see more on the World Bank Groups work in Africa, please visit: www.worldbank.org/africa

 

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One Response to “Africa Can Feed Itself, Earn Billions, and Avoid Food Crises by Unblocking Regional Food Trade”

  1. Dear Sir/Madam,
    It interests me to come your way at this time. I a Albert Mcbell, a recent college graduate who majored in Business Adminstration. During my college days, i joined the Releaf Group, an international Non-Governmental Organization which is focused on transforming African economies through entrepreneurship. The Releaf Group comes with amazing opportunities for businesses in Africa. Please i m therefore imploring you to help us publish this article on your bulletin to enable businesses or volunteers apply to join the Releaf Group. Please find below the article. Thank you.
    Sincerely,
    Ninepence Albert.
    How Agriculture will contribute to alleviating poverty and ameliorate the lives of all Nigerians (including those in Non-Agricultural sectors)
    Our national economic live revolves around activities that promotes quality life for all people. These activities encompasses various sectors of the economy such as Mining, Fishing, Agriculture, Construction, Industry among many others. In this contemporary epoch, the African economic milieu is buffeted by numerous relentless problems regressing the economic lives of many. In the past, agriculture which Africa had comparative advantage assisted in making the African continent self -sufficient as well as improved balance of payments. In this era, agriculture which in the past was the bedrock of African countries is now not fully explored with most countries depending on new found resources like gold, diamond, oil, bauxite and many more.
    In Nigeria, agriculture is a pertinent sector of the economy contributing about 30% employment for the population as at 2010. Agriculture in Nigeria is carried out with simple tools and dispelled across the country and is scarce to find large scale agriculture. As at 2001, agriculture contributed to 32% of Nigeria’s GDP. Agriculture is categorized into two firms in Nigeria: food crop faring and export crop farming. The food crop farming is the most widespread occupation in Nigeria that employs majority of the labour force. Its products are the food crops in the market e.g kolanut, cocoa beans, groundnut, millet, palm kernel, palm oil, rice, plantain, garden eggs, cassava, yams, cashew nuts and many more. Export crop farming is usually a large scale faming activity concerned with the production of crops for exports. Most of them are industrial crops e.g rubber, coconut, coffee among others. Also, animal rearing which include cattle, sheep, pigs, fowls, ducks and turkeys are conspicuous in Nigeria. Every village in Nigeria has a considerable quantity of livestock but the most important centre is Northern Nigeria.
    In the 1960s prior to Nigeria focusing on oil, the country’s agricultural sector was luminous on the world stage. Between 1962 and 1968, export crops were the country’s main foreign exchange earner. The Nigeria economy was the number one globally in the palm oil-exports, outweighing production of such crops in Malaysia and Indonesia and moreover exported 47% of all groundnuts, putting it ahead of the US and Argentina. The economy of Nigeria subscribed tremendously to oil production after it discovered such a resource. The Nigeria’s oil has caused a contraction of the agricultural sector which has precipitated entrenched destitution. The Oil sector contributed to growth but declined to impact the lives of many people due to the debacle in connection to agriculture. According to the National Bureau of Statistics in Nigeria, 60.9% of Nigerians in 2010 were living in absolute poverty(less than $ 1.25 a day) upsurging from 54.7% in 2004. In recent times, the Nigeria’s economy has experienced incredulous backwardness. The country that prior to its civil war was self-sufficient in food, has now declined from being self-sufficient in food to being a net importer spending $11billion dollars on imports in rice, fish and sugar. How can this be? Below is the graph of Agricultural output (% of GDP) and Nigeria’s population. This indicates that more people will languish in absolute destitution.

    The Nigerian population is growing incessantly and the agricultural output is dwindling in recent times (from 2010-2014). It is in this regard that that the Nigerian economy is now exigently seeking to contribute 20 metric tonnes of domestic food supply by 2015 to help create 35 million jobs through agriculture. Can this be accomplished solely by the Nigerian Government? The people of Nigeria are lamenting in their poverty and who will hear their quandary and morass? A savior has been born from nowhere to help pull the people of Nigeria from poverty. This savior is a young pioneer team of visionary leaders known as the Releaf Group. The Releaf Group was set up with the vision of transforming the African continent (with the first move to transform Nigerian businesses). The Releaf Group identified that Nigeria’s economy is growing at a breakneck speed but failure to compete with the key market of agriculture and entrepreneurship due to disunity and brain drain. The Releaf Group serves as brain gain to transform Nigeria’s businesses efficiently by employing felicitous approaches like project Ikeora ( an initiative to create a new central website for the Releaf brand, providing the avenue for interested parties to engage in value chain consulting through online platforms).
    The Releaf Group has identified the setbacks of the Nigerian agricultural sector. These problems are (i)Lack of storage facilities
    (ii) Acquisition of land for farming is expensive
    (iii) The traditional farming system of bush fallowing contributes to desertification
    (iv)Lack of adequate transport to convey food items to the market
    (v)Food items are too expensive
    (vi)Lack of capital to purchase agricultural inputs e.g fertilizer, seedlings
    (vii)Lack of scientific knowledge in modern agricultural e.g use of fertilizer, crop rotation, mechanization, use of insecticides.
    The Releaf Group through deliberations and cooperation’s designed strategies to serve as panacea to the future of agriculture. They identified
    (i) Agricultural mechanization-use of machines e.g tractors in farming
    (ii) Crop rotation
    (iii) Irrigation farming
    (iv) There must be legislation to streamline the acquisition of land for farming
    (v) Storage facilities e.g refrigerators,
    (vi) Farmers must be provided with insecticides to kill pests
    (vii) Farmers must be given loans with low interest to enable them expand their farms
    Now the sensational element how will agriculture mitigate poverty in Nigeria?
    Agriculture contributes revenue to the government

    Now the sensational element, how will agriculture mitigate poverty in Nigeria?
    Agriculture provides revenue for government. Through production of agricultural products, it provides food for the population as a whole. Farmers who engage in exportation of their products pay export duties on their goods to the government. The government in this way can generate much revenue to meet its expenditure.
    Also, the size of the market expands with agriculture. Through agricultural production, more goods are produced to meet demand. Also, through international trade, countries that can import agricultural products from Nigeria which they cannot produce. Moreover, agriculture in Nigeria provides employment opportunities. Agriculture helps to attenuate unemployment menace by providing jobs for majority of people. Agriculture provides jobs for farmers, drivers who cart food staffs to the markets, from labourers and shepherds. Employment opportunities are also offered for forwarding and clearing agents, distribution agents and insurance companies.
    Promotion of understanding and world peace among countries. Through agriculture production, goods are exported to other countries. Foreign trade brings together nations to exchange ideas and information on various issues to drive economic buoyancy. The interactions among nations which leads to understanding and peace among countries.
    Also, more efficient use of resources is enhanced through agriculture. The Nigerian economy has comparative advantage in production of agricultural products. By concentrating on the goods and services which can be produced at a lower opportunity cost, the agricultural industry can compete with others on the global forefront. This direction of agriculture makes efficient use of resources.
    In addition to this, agriculture earns foreign exchange for Nigeria. Through sales of agricultural goods and services to other countries, foreign exchange is realized which can be used to pay for imports and defray the cost the costs of other international financial expenses.
    Today, countries have defined their own destiny. The time has come for Nigeria to make hay while the sun shines by investing into activities that will engender economic freedom for all its people. Join the Releaf Group as they embark on a transformational trajectory to accomplish change in Nigeria and Africa. As Mother Theresa reiterated “I alone cannot change the world, but I can cast a stone that can cause many ripples” so is the Releaf Group. Join the Releaf Group now! http://www.releafgroup.org

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