This Monday, African heads of state will meet again in Addis in the surroundings of their new and impressive headquarters, which were inaugurated in January 2012.
It is hoped that the commitments they will agree on this time to improve trade between their countries are equally impressive. The 19th African Union Summit continues with the theme of “Boosting Intra-African Trade,” that is, trade among African countries themselves. And the theme is timely as data shows that all regions of Africa have never before been so dependent on food imports from outside the continent. Africa is not feeding itself and poor people who can least afford high global commodity prices are feeling the impact most. Only 5 per cent of grain eaten on the continent is produced here.
New thinking and greater political will are needed to spur cross-border trade. New thinking will mean that African governments focus less on market access to the West and less also on formal trade agreements at home. While there has been considerable success in removing tariffs on goods traded across borders in Africa, as tariffs have come down it has become increasingly apparent that a tangled web of rules, fees and high-cost services is strangling regional trade in food in Africa, with the result that today Africa still trades little with itself. A country doesn’t have to be a member of a trading bloc to facilitate the more efficient movement of food across its borders.
The market value of Africa’s food staple production is at least $50 billion a year — equivalent to three-quarters of all current agricultural output. New thinking will mean greater focus on ensuring that this production is stimulated and products traded between countries. The huge potential for regional trade in food staples, which is needed to feed people, feed them more cheaply, and contribute to greater food security, is not being exploited.
Food staples are the key food products that people need to live and be healthy and besides cereals, include fresh products such as potatoes, onions and tomatoes. Trade in these fresh products is not as constrained by old and unreformed institutions, which continue to exert control over a few primary commodities such as maize and tea.
Greater political will is needed to remove regulatory barriers to trade and open up competition along the whole value chain. Fertiliser use is around 10 per cent of world average, for example, due to long and complicated tendering processes that can add as much as 50 per cent to the cost of the final product, and many countries still insist on their own different standards, which prevents regional markets in the product.
Meanwhile, lack of competition in the trucking sector, especially in West and Central Africa, keeps transport prices extortionately high, and elsewhere traders’ margins can be as much as 50 per cent of the value of the product. And often, standards designed to ensure the quality of final products have become restrictive. If Kenyan food producers can send their products to Japan, Malaysia and Europe, meeting strict entry requirements, then why do some African countries with food deficits continue to insist on such rigorous testing so as to prevent Kenyan imports? One African country insists on all food products being tested for radiation regardless of where they come from.
Greater political will also mean the trade environment becomes less opaque and unpredictable. Export and import bans along with price controls create uncertainty, aggravate regional food shortages and undermine trade and investment. In Zambia, a 30 per cent boost in maize production can lead to a 50 per cent fall in prices if borders are closed and farmers are unable to benefit from selling their surplus in neighbouring countries. Most of the influence effecting food trade policy emerges from inside rather than from outside governments.
Demand for food staples is expected to double by 2020, with consumption largely driven by growing cities. And global warming will demand better linkages from food producing to food consuming areas, which are often not in the same country. Growing and more youthful populations need to be fed and they need jobs. Stimulation of food production and the easy trade of products between countries is urgently required if demand is to be met and the continent is to be saved from perpetual reliance on imports. As many of the small scale cross-border traders will continue to be women, it is important that their rights are protected. They should as a minimum be able to cross borders free from and threats and sexual harassment, fines, confiscation of goods and bribes.
Across Africa, there are positive signs that agricultural production in food staples is taking off, driven to a large extent by a new breed of domestic farming entrepreneurs, investing millions of dollars. African heads of state now have the opportunity to stimulate this production further by removing non-tariff barriers and allowing free markets to flourish. And they should set for themselves monitorable objectives by which leaders can be held to account in following years. The domestic private sector will do the rest. African can feed Africa. And it must.