FOR all the talk of Africa as the last frontier for global food production, its share of exports in one of its key potential growth areas — agriculture — has fallen, despite strong economic growth in many countries. According to a report released by the World Bank last week, many emerging markets elsewhere export more farm products than the whole of sub-Saharan Africa. For example, about 30 years ago, the biggest suppliers of pineapples to the European Union were in West Africa. Now they are Thailand, the Philippines and Costa Rica.
Africa has more than half of the world’s viable farmland and sizeable but almost unused water resources — only about 7% of farms are irrigated, compared with 40% in Asia. Importantly, farming provides the most employment in Africa and is a significant contributor to gross domestic product (GDP). The report maintains it could become a trillion-dollar industry by 2030, but says this will require a radical overhaul of thinking by governments and the private sector on policies and support for farmers.
There has been progress. Agricultural GDP growth in sub-Saharan Africa has been about 4% a year but crop yields remain among the lowest in the world and food security is a problem. Africa’s food market, presently valued at $313bn a year, could triple if farmers modernised their practices and had better access to credit, new technology, irrigation and fertilisers. There is a dizzying array of new developments in African agriculture. More than 30 agribusiness investment funds with target capitalisation ranging from $8m to $2.7bn are focusing on Africa. Banks are starting to step up and many other initiatives are giving technical and other support.
Despite this multifaceted focus on agriculture, much of it from outside the continent, there are still many obstacles to the “green revolution” Africa so badly needs. There is insufficient state spending on agriculture. Most countries have not stuck to the African Union’s threshold of public investment in agriculture of 10% of annual budgets and raising agricultural productivity by at least 6%. Many have reduced agriculture spending.
Trade barriers continue to frustrate progress and shortages of storage, warehousing and other basic infrastructure still dog the livelihoods of rural farmers. And there are more insidious problems of bureaucracy. Take the seed industry. The failure by states to harmonise registration requirements across national borders for new seed varieties has slowed down food production at source.
It takes 10 years to develop a seed variety and another two to three years testing it before it is registered. But to take the seed registered in one African country to another, the entire testing and registration process has to begin from scratch, even if the countries are close together and share ecological conditions. The same applies to agricultural chemicals. Rwanda, for example, demands that new trials are held for a chemical already registered in SA to treat the same pests. There is no business case for this in such a small market. But Zambia, for example, accepts registration in SA and farmers have quick access to top products.
Other important issues include infrastructure deficits, land title and poor institutions.
High growth rates mask the shaky foundations of African economies, not just health and education, but, crucially, agriculture, the continent’s biggest natural asset. The private sector seems to have woken up to the opportunity. Now a sea change in government thinking and commitment to the sector is required. That may be a bridge too far.
• Games is CEO of Africa @ Work, an African business consultancy.