Abu Dhabi, UAETuesday 2 June 2020

Food security concerns highlight opportunity for African agriculture

As countries such as Vietnam and India ban rice exports during the pandemic, many nations on the continent are revisiting ways of feeding their people from sources closer to home

Workers remove weeds as they tend to fields at a farm in Eikenhof, South Africa.  Reuters
Workers remove weeds as they tend to fields at a farm in Eikenhof, South Africa.  Reuters

Hunger stalks Africa again, and at a time when the world’s capacity to help is greatly diminished. For the continent’s long-neglected agriculture sector, this may be a blessing in disguise.

Africa has about 60 per cent of the world’s available but unused farmland, according to World Bank figures. It also has around 80 million people that need emergency food aid right now.

While food poverty has long been an issue, many governments have neglected their farming potential, instead investing their energy in high value mineral or oil and gas production.

Food is mostly produced by subsistence farmers while imports of staples such as rice, wheat and maize bolster supply. Any shortfall because of drought or conflict is usually met the global community.

With the world’s logistic supply chain locked down amid the global pandemic, and many food producers such as India and Vietnam banning rice exports, this is no longer the case.

“Across sub-Saharan Africa, we see a trend for governments to want to move away from food imports,” says Liz Whitehouse, managing director of research company Africa House in Johannesburg.

“Countries are beginning to introduce incentives to improve agriculture, agro-processing and food, and to encourage beverage manufacturing locally.”

Cameroon and Nigeria are among those who have an expanding list of import restricted foods, while others such as Uganda continue to explore free trade zones for agriculture that provide tax-free access for outside agro-investors.

Angola, meanwhile, recently said that the UAE is investing $200 million (Dh734.6m) in agriculture technology centres across the country.

Even Zimbabwe, where more than seven million people need food assistance, wants to rebuild a modern agriculture economy.

The country’s experiment with land reforms, centred around the eviction of white commercial farmers, has been a disaster, leading to the destruction of the once productive industry.

Ever since the ousting of former president Robert Mugabe in late 2017, the incumbent administration under Emmerson Mnangagwa has tried to lure back skilled farmers, technicians and even financiers.

“The president personally asked me if I’d take the job, so I said yes,” says Marc Holtzman, a US banker appointed chairman of the country’s largest private lending institution, the Commercial Bank of Zimbabwe, late last year.

Mr Mnangagwa has been recruiting skilled technocrats to help restore the country to nutritional independence and eventually once again become a net exporter of food.

CBZ has assets of around $1 billion, and will partner with the government to provide finance for machinery, fertiliser and other essential inputs.

For instance, the bank is backing the return of US tractor manufacturer John Deere to Zimbabwe, after a 20-year absence. A $50m loan facility will pay for 1,800 tractors to be imported and assigned to emerging farmers.

“After being economically shackled for 40 years, the economy is now ready to finally achieve its full potential,” Mr Holtzman says.

Nigeria, Africa’s most populated country and its largest economy, has begun enforcing restrictions on food imports and the use of precious foreign exchange to pay for it.

It is on track to be the world’s second-largest consumer of rice behind China. In spite of a large sector of subsistence farmers growing rice, the country still depends on imports to meet demand.

“Why doesn’t Nigeria mill rice at an industrial scale? Because it's cheaper to import,” says Kalu Aja, chief executive of AfriSwiss Capital Assets in Abuja. “This is because power supply is weak, infrastructure non-existent and the local currency is still too strong.”

Right now, supermarkets in the Kenyan capital of Nairobi stock butter from Belgium and chicken eggs from France can be found in Accra, Ghana. Canned tomatoes from China and Italy are commonplace across the continent.

Growing these products would be entirely possible in Africa’s fertile soil but agriculture is every bit as dependent on roads, ports and electricity supply as mining, oil and gas – Africa’s primary source of foreign exchange.

Without a reliable way to store and move fresh produce, commercial farming for export becomes impossible.

Likewise, the vague laws many African countries have around land title also make long-term investment difficult.

Until recently, African governments have been reluctant to address these issues, which require money, and the political will to subvert traditional tribal land ownership laws.

Yet, the dependence on global raw material and energy markets now makes reform imperative.

As the global pandemic shuts down demand for minerals and energy, African countries might now be compelled to develop agriculture to lessen their dependence on raw material sales.

Updated: May 16, 2020 03:34 PM

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