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By Bernard Wainaina
CEO,Profarms Consultants®

Africa can feed Africa.

It is well endowed and has the markets.

But it needs more than good technology policies.

Agribusiness holds the key to meeting urban
consumers’ demand for food, particularly
processed food.

Scaling up productivity means tapping water resources for irrigation, providing stable prices while doing away with artificial subsidies, using seeds with better yields, providing basic transport infrastructure, providing incentives for financial institutions to invest in agriculture as much as in commercial farming, and
developing a profitable and competitive
agribusiness sector.

By drawing on lessons from other regions such as Asia, Argentina and Brazil, Africa can turn its fortunes around gradually.

Second, Africa’s population growth has to be
turned into an asset.

By 2050, Africa’s youths alone will constitute over a quarter of the world’s labour force.

Its middle class is rising.

Urbanisation, at 3.7%, is taking place at more
than twice the global rate.

Combined, and given their sheer magnitude and pace, these phenomenal trends present a rare and historical opportunity for rapid
industrialisation.

Emerging countries will also increase demand for Africa’s farm commodities.

There is vast potential for establishing production and trade links, as well as synergies between different actors along the entire agribusiness value chain (producers, processors and exporters),through the provision of incentives that bolster private sector investments and encourage the competitiveness necessary to meet consumer requirements for price, quality and standards.

The shift from primary production to modern integrated agribusiness will provide lucrative opportunities to many smallholder farmers, the majority of whom are women, as well as generating modern jobs for the continent’s youths.

Third, growing opportunities from investment
in infrastructure will help overcome the
current challenges associated with poor
access between farm-level production and
downstream activities, such as processing and
marketing.

This opens the door to increasing the production of higher agricultural value-
added products while continuing to produce
popular commodities such as coffee, tea,
cocoa, cotton, livestock products, fresh
vegetables and fruits.

While regional integration is expected to help countries reach economies of scale, it should also help minimise high transaction costs associated with fragmented markets and price controls.

As long as governments implement regional
free trade policies such as abandoning export
and import bans and removing non-tariff
barriers, production for domestic markets will
become increasingly attractive.

This in turn should counter the effects of those existing tariff regimes that favour raw over processed goods.

Fourth, sustaining the continent’s growth and
overcoming current energy challenges is
possible.

African energy use per capita (which incorporates hydro power, fossil fuels and
biomass) is currently only one quarter of the
global average.

Yet Africa’s renewable energy potential is substantially larger than the current and projected power consumption of
the continent.

With abundant low-carbon renewable resources, a growing energy demand and falling technology costs, Africa has the opportunity to deliver economically competitive energy solutions for both remote rural and growing urban locales.

And bringing power to rural communities will not only improve the quality of individual lives, but also help scale up agribusiness.

Fifth, rapidly changing demands and
technologies mean that Africa can power its way through the technological revolution.

For example, Information and Communication
Technology applications such as mobile
banking solutions are playing an important
role in connecting smallholder producers to
buyers.

Latecomer advantage can help leverage existing global knowledge towards strengthening the continent’s own technological efforts, its know-how and its
innovation capabilities.

This would make the continent’s agribusiness systems competitive.

Robust and enabling policies

A robust and enabling policy framework is
urgently needed.

It will help remove existing constraints on agro-industrialisation and encourage investments.

It should also include, but not be limited to, the following key components:

a) ensuring that the right combination of agricultural, industrial and trade policies is in place to encourage sufficient production of raw material as well as the efficient distribution of produced products;

b) ensuring that rights to land and natural resources are recognised and enforced to secure the transfer of rights to encourage productive use of land and boost investor confidence;

c) pursuing new and alternative sources of funding such as sovereign funds and domestic resources, creating incentives for the private sector to make investments;

d) using public-private partnerships to finance agribusiness or facilitate capacity building through technical and entrepreneurial skills training.

Kenya’s fresh vegetables firms have moved
into high-value-added exports as a result of
effective collaboration between the public and
private sectors, and the strengthening of links
between businesses and educational
institutes.

If Kenya did it, other African countries can do it as well.

Lessons can also be drawn from China, which created scores of research and design institutes and universities focusing on agricultural innovation.

As the African Union’s Year of Agriculture and
Food Security, 2014 could bolster the political
commitment and impetus to make agribusiness Africa’s next frontier.

“The African Story as told by Africans”.©African News Digest®

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