Overcoming the ‘chocolate lament’ through agribusiness

One of the key findings of the agriculture status report launched at this year’s African Green Revolution Forum in Kigali is that our governments understand what should be done to trigger economic transformation through farming.

This was to be expected, especially given the Comprehensive Africa Agriculture Development Programme (CAADP) committed to by the African governments in Maputo, Mozambique, in 2003 and renewed in 2014 in Malabo, Equatorial Guinea.

However, it appears a bit more complicated. As with most development issues, notes former UK Prime Minister Tony Blair in the foreword to the Africa Agriculture Status Report 2018, it is not a question of what needs to be done, it is how.

He relates what many African leaders have already admitted to: “They understand the concept of inclusive growth, but the difficulty is on delivering it.”

Mr Blair’s observation somewhat sums up the report’s impetus under its theme for this year, “Catalysing Government Capacity to Drive Agricultural Transformation”.

The report reminds us that “agricultural transformation is the shift of agriculture from largely subsistence, and often underutilization of land and labour on the larger farms, to commercial agriculture with the dominant small-scale commercial farms producing a large and growing proportion of their crops for sale.”

It speaks of two forces that drive agricultural transformation. First, how rising labour productivity increases production beyond subsistence.

Second, improved infrastructure, especially roads, which increase the availability and decreases the cost of a wide range of attractive manufactured consumer goods as well as increasing profitability of new technology.

Speaking of manufactured consumer goods, note this year’s theme for the Kigali meet: “Lead. Measure. Grow: Enabling New Pathways to Turn Smallholders into Sustainable Agribusinesses”.

The forum was severally reminded of the folly of many of our countries’ export of raw agricultural products only to import them back a disproportionate premium after value addition from the West.

We may enlist Dr Akinwumi Adesina, President of the African Development Bank, who has been quoted calling for our own value addition by dismissing the evocative and oft-repeated chocolate lament.

“Producing chocolate instead of simply exporting cocoa beans does not require rocket science,” he is quoted to have said in another forum.

For those in doubt as to why the mood-lifting treat should be is evocatively symbolic, a depressing statistic is revisited how “Africa receives only 2 per cent of the $100 billion annual revenues from chocolates globally.”

It beats logic that Africa should allow such blatant exploitation when something can be done about it to our advantage.

Turning things around is possible latching onto the potential within our grasp, including towards job creation such as the value addition is capable in the industrially revamped sector. AGRA’s previous Africa Agriculture Status Report launched in 2016 in Nairobi unpacks the trends, noting that farming remains a key source of income for 60 to 65 per cent of the labour force in sub-Saharan Africa and will continue to be a major source of employment for most countries for a decade or more.

Among its key findings is that broad-based agricultural growth is going to generate long-term employment and wealth, but that the industry must grow beyond what happens in the fields.

Building on achievements thus far, and borrowing from examples in East Asia, leveraging on agriculture to stimulate growth in manufacturing jobs is not an option. It’s a must.

The report notes that manufacturing accounts for only about 10 per cent in Africa’s total employment, which is “lower than anywhere else in the world save the Arab States.”

Another, perhaps more positive of its findings, is that urban and rural Africa are increasingly connected by agriculture. 

Urban consumers, the report finds, are driving a lucrative market for food products that could be worth US$1 trillion by 2030.

This is generating significant income and employment opportunities for African farmers and food companies, “though that demand is now being met with a hefty serving of food imports.”

City dwellers also are increasingly pursuing farming as a business. The report cites evidence from the region in Rwanda, Tanzania and Kenya, as well as in Ghana, Malawi and Zambia, where urban households control 15 to 35 per cent of Africa’s farmlands.

This, it says, is injecting more capital and technology into African agriculture, but it’s also increasing competition for land.

But more injection of capital and technology should also imply local agribusiness adding value to our cash crops – our teas and coffees and the like – for better earnings and trading within ourselves and elsewhere as envisaged under the Africa Continental Free Trade Area (AfCTA).

This possibility is given credence by the African Agricultural Trade Status Monitor Report launched at the forum in Kigali. The report tracks the progress made in achieving trade targets set in the Malabo declaration.

It finds that, though much remains to be done, “there have been strong improvements in Africa’s trade performance since the 1990s both in the global and regional markets.”

Ultimately, however, as explained by AGRA President Dr Agnes Kalibata in the 2018 agriculture status report, the emphasis should be on mutual accountability, recognizing that holding all stakeholders including governments accountable to the progress of implementation and delivery is central to agriculture sector performance.

Twitter: @gituram

The views expressed in this article are of the author.

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