Why Africa’s food supply needs a regional approach

By disrupting international supply chains, the COVID-19 pandemic has triggered much debate about the need for deglobalisation. This presents an ideal opportunity for Africa to explore the regionalisation of agribusiness on the continent, writes Louis van Ravesteyn, head of Agri Business Pan Africa within the Personal and Business Banking division at Standard Bank Group.

Why Africa’s food supply needs a regional approach
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As supply chains around the world are disrupted and the demand for certain types of food decreases in the wake of the COVID-19 outbreak, questions have begun to emerge about Africa’s capacity to ensure food security for its citizens.

While parts of the continent have faced recent food production challenges due to droughts, floods and locust swarms, Africa continues to have enough staple food to feed the majority of its citizens, thanks to local farmers and imports from other parts of the world.

The outbreak of COVID-19, however, has highlighted the need for the continent to concentrate its efforts on becoming self-sufficient in the production of certain food, such as wheat, maize, rice and proteins, as well as value-addition and the processing of raw materials.

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From global to regional
More formalised or efficient value chains in other parts of the world mean that countries in Africa will continue to import certain food, but thanks to the current global outlook, there is an opportunity for Africa to refocus and benefit from the competitive advantages that exist on the continent, such as arable land, affordable labour, and, in some regions, good rainfall.

Agriculture remains the sector with the most potential to drive growth in Africa, especially sub-Saharan Africa. The sector employs 70% of the continent’s population and contributes about 23% to GDP.

Many would agree that Africa has not realised its full potential in agriculture and that the advent of COVID-19 has emphasised the need to explore ways to become self-sufficient in this area.

One of the ways of doing this is to embrace intra-African agribusiness trade. The COVID- 19 pandemic has ignited conversations about deglobalisation as trade routes were temporarily cut off due to lockdowns and supply bottlenecks around the world.

Agriculture and food production are essential services, but have not escaped the consequences of shutting down economies and disruptions to global supply chains. Yet these disruptions, when approached differently, present an opportunity to start discussions about the regionalisation of agribusiness in Africa.

Towards self-reliance
The current reality is that many countries in Africa are over-reliant on imports from the East or West to meet their food needs; in fact, two-thirds of African countries are net importers of food. Intra-African trade can reduce this reliance and offer more employment opportunities.

If we could move crops efficiently between countries, build partnerships, and broker effective trade deals, Africa would take a significant step on the road to self-reliance.

Imagine being able to move crops seamlessly between Nigeria, the largest producer of yams and cassavas, and Kenya, or between South Africa and Uganda, one of the biggest tea and coffee producers in the world.

This type of approach, coupled with moves to develop infrastructure that facilitates cross-border trade under the African Continental Free Trade Agreement, could create exponential growth in intra-African trade over the next few years.

It is important to remember, however, that global trade in the form of exports remains critical. Exports provide African countries with foreign exchange to invest in the infrastructure needed to become self-sufficient. Infrastructure will also help countries convert raw crops into final food products for local consumption as well as the export market.

The role of digital technology
The growing role of technology in Africa’s agriculture sector cannot be ignored. According to the African Development Bank, more than 350 agritech companies currently operate on the continent, and the COVID-19 pandemic has accelerated digital adoption in farming.

In Africa, a large proportion of food is produced by smallholders, the majority of whom are subsistence farmers. Nearly every one of these farmers owns a mobile phone and can potentially contribute to the agribusiness value chain by becoming an outgrower (essentially a contract grower) who sells to the milling and processing companies, as well as to exporters.

The next step is the introduction of a sector-wide digital platform. By using the power of a network, a platform has the potential to bring the entire food value chain together to ensure the easy flow of inputs and produce, while seamlessly enabling payments and collections. It can also democratise data, and allow people to gain access to knowledge.

Sub-Saharan Africa is the ideal region for this technology due to the complexities of smallholder production and the lack of infrastructure and markets. Standard Bank’s One-Farm proof-of-concept platform is an example of an intitiative to bring together a network of digitised solutions for all players in the agricultural value chain.

For agribusiness to grow, all role players in the value chain must embrace technologies that improve crop yields, lower costs, create efficiencies and bring them closer to the end consumer.

The time is now
Governments and regulators are taking stock of global shifts brought about by COVID-19, and in respect of food security, are seeing a shift from pure reliance on globalisation towards deglobalisation.

COVID-19 has also cast a harsh light on many countries’ over-reliance on food imports and the challenges during the pandemic.

All of these factors point to Africa’s need to reimagine agribusiness and the opportunities it presents. As we continue to navigate the pandemic, the continent has been presented with an opportunity to strengthen regional relations in agribusiness and finally start down the road to self-sufficiency in food supply.

The views expressed in our weekly opinion piece do not necessarily reflect those of Farmer’s Weekly.

Email Louis van Ravesteyn at [email protected].