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Regional markets matter
– by Sheila Mysorekar
© Dagmar Wolf
Small traders in Tanzania
Given the sheer size of the continent and lots of fertile regions with abundant water, it may seem surprising that food scarcity is a permanent challenge in Africa. There are many reasons – from droughts to poor infrastructure, from civil wars to uncultivated fields still contaminated by landmines.
In a recently published report, the World Bank’s Poverty Reduction and Economic Management Department claims that the most important single step towards solving Africa’s food problems is the removal of cross-border trade barriers within the continent. Sub-Saharan countries’ demand for food is expected to double by the year 2020. The authors of the study claim that, in order to prevent major food crises, it is necessary to support small farmers to produce more, but they state it is even more urgent to abolish trade restrictions between African countries.
In view of rapid urbanisation, many sub-Saharan countries are increasing their food imports. But this cannot go on forever, the World Bank experts warn, since the costs are enormous and already amount to more than $ 20 billion per year. The figure, moreover, is said to be rising constantly in step with growing food demand. Obviously, new agricultural policies are necessary.
For several reasons, many African farmers are moving to the cities. Natural disasters are relevant in this context, but so are lack of access to capital, seeds and fertiliser, the study points out. The result is less staple food production with the consequence of more and increasingly expensive imports. In the eyes of the World Bank, African farmers should benefit from the trend, but currently, only five percent of African cereal imports are from Africa.
According to the World Bank report, this situation can be remedied by removing trade barriers within the continent. The authors claim that, in the past, countries with more open trade policies were better off in terms of food security. Most food staples are transported by land on trucks. Poor logistics, bad roads and roadblocks make the transit long, expensive and often dangerous. Crossing the borders is even more difficult, because the rules of exports and imports vary greatly even in neighbouring countries, and the standards of enforcement diverge too. According to the World Bank, tedious delays at borders as well as bribery are common.
The problem of logistics goes further, though: The report focuses on another problem of regional trade – sexual harassment. Lots of food staples produced by small farmers are carried to regional markets by women, small traders who support their families. The World Bank study gives an example from the Great Lakes region, where women conduct a daily cross-border trade, but are often harassed by the male border guards. Most cases go unreported, but, according to the Bank, male attitudes hinder the food trade.
Making business safe for women is crucial for ensuring food supply in many areas, the report states, since smallholder farmers’ products are of central importance to alleviating the food crisis: “Poor people in the slums of Nairobi pay more pro rata for food staples than the wealthy pay at supermarkets.” This is said to reflect the importance of the distribution sector as well as that “in many countries the sector is not effectively linking poor farmers and poor consumers”.
More than 70 % of Africans live in the countryside and their livelihoods depend directly on agriculture. The report points out the importance of giving small farmers access to new agricultural technologies like hybrid seeds and new fertilisers. Citing an example from Malawi, the authors write that such progress goes hand in hand with trade liberalisation however. The reason is that fertilisers and other inputs are imported.
Investing in institutions
Opening trade barriers is a political issue. National governments as well as regional and international trade organisations are in charge of the matter. However, the World Bank study stresses that private sector involvement is necessary for securing food safety. According to the authors, private sector companies are needed to build food reserves and improve logistics, so more competition among them is considered helpful.
The authors recommend implementing a set of measures that would remove barriers to regional food trade along the value chain. Furthermore, they call for a programme of enhanced dialogue on regional food trade with the aim of drafting and enforcing sensible rules.
According to Benjamin Luig, a food expert with MISEREOR, the Catholic non-governmental organisation based in Germany, the World Bank authors have a point. They are right in calling it “shocking” that 95 % of the basic staples in Africa are not regionally produced, but imported. Megacities like Abidjan, Accra or Nairobi even depend on food imports from overseas.
While he admits that the World Bank paper correctly names problems like the transport cartels, expensive fertilisers or weak logistics, Luig adds that it fails to acknowledge all relevant reasons. In his view, the dire situation is caused by the unilateral orientation of the African agrarian sectors towards the world market. Regional markets, he says, were largely neglected in favour of cultivating cash crops for overseas trade. Contrary to the advice in the World Bank report, the MISEREOR expert therefore predicts that the liberalisation of trade in Africa in line with the rules of the WTO (World Trade Organisation) will further undermine African food production.
According to MISEREOR, it will not do to reform rules and institutions. Luig says that public investment in storage and rural extension services is necessary. He is also in favour of support for informal markets, which are crucial for poor herders as well as poor consumers.
Unlike many reports, the World Bank study does not stop at analysing the present situation. The authors have included an “Indicative Action Matrix”, suggesting clear steps to remove the trade barriers, which – according to them – would remedy the food scarcity in many African countries. Their call to action goes out to high level authorities, officials working at borders, the international community as well as to farmers and cross border traders.