The lion economies are on the prowl. McKinsey
Global Institute, a business think tank, shows that sub-Saharan Africa’s real
GDP growth rate jumped to an annual average of 5.7%, up from only 2.4% over the
previous two decades.
However,
impressive GDP growth rates in Africa have had no impact on Africa’s chronic
hunger and malnutrition. According to the first Africa Human Development Report
by UNDP, over 200 million Africans are undernourished and one third of Africa’s
children are stunted. Africa’s chronic hunger and malnutrition impairs
livelihoods, undermines human development and creates intergenerational poverty
traps.
The
US, the world’s largest exporter of maize and wheat, is facing the most severe
drought in 50 years. Similarly, severe weather has also visited havoc in other
major grain exporting countries like Australia, Brazil, Russia and India. Consequently,
global food prices hade jumped 6%, with price of maize going up 23%.
Rising
food prices is bad for Africa’s poor households who spend over 50% of their
earnings on food. Similarly, rising food prices have severe impacts on Africa’s
trade balance because only 5% of food imports come from within Africa.
Moreover, Africa’s food imports are projected to double by 2020 hence the
macroeconomic impacts of food importation will only get worse.
Africa’s chronic
hunger, the rise in global food prices and the ever-growing food import bill
has turned global attention to Africa’s agriculture and food policies. In a
recent report, “Africa Can Help Africa”, the World Bank argues that
increased regional trade has the potential to: expand the regional market for
food staples; boost agricultural production in surplus zones; and, ameliorate
price volatility, improve national and regional food security.
Agricultural potential is not equitably allocated within and
among countries. Africa has traditional areas of food deficit and food surplus.
Drought prone areas, such as the Horn of Africa and the Sahel often experience
crop failure. Highly productive agricultural zones such as Eastern Uganda,
Northern Zambia, Southern Mali, and Southern Tanzania are food surplus areas.
Given the differences in weather patterns across countries,
regional food production tends to be less variable than production at the
country level. Moreover, seasonal variability in rainfall and production, which
will increase with climate change, is not limited to national borders. The
World Bank argues, rightly, that an Africa food security model based on
national self-sufficiency goals alone cannot work.
The report, Africa
Can Help Africa, offers four messages worthy of careful reflection:
1.
Removing regional trade barriers offers benefits to farmers,
consumers and the economy. Farmers gain incentives to increase production to supply
expanded markets. Consumers benefit from reduced price volatility and improved
access to food. Local and regional economies benefit from jobs created by the
value chains created through labor markets, input supply markets, storage and
distribution, including transportation and financial services;
2.
Remove regulatory barriers to
trade and competition along the farm to fork value chain. Trade barriers deny
African farmers access to higher yielding seeds and better fertilizers
available elsewhere in the world. What is needed is a consistent and stable
policy regime to regulate trade in agricultural inputs as well as enabling the
creation of public-private partnership that reduce the transaction
costs of coordination failures and information asymmetry across the value chain;
3.
Build and reform institutions that guarantee market stability
and efficiency. The primary objective is
to support informational and distribution functions of food markets. In this
regard, commodity exchange and warehouse receipts are essential. Weather-indexed insurance can lessen the impacts of climatic
shocks on farmers. The idea is that if rainfall or critical climate parameter
falls below a certain threshold, a farmer would receive compensation for
production losses;
4.
Political economy issues that
constrain open regional trade must be addressed. Commitments to opening up
regional trade in food, implementation has generally been weak. Opening up agricultural and food staples to
regional trade will inevitably create winners and losers. Where reform reduces
the gap between producer and consumer prices, farmers and poor consumers will
gain; middlemen and political rent seekers will lose. Hence, governments must
explain the benefits of a regional approach to food security and build
political and social consensus for integrated agricultural markets.
It is not uncharacteristic of the World Bank to propose a
classical neoliberal market approach to dealing with Africa’s chronic food
insecurity. In our quest to solve problems we often get trapped in a linear
construct, which leads inevitably to non-integrated and limited solutions. Cross
border trade must be part of an ecosystem of solution options, including attracting
Africa’s youth to agriculture, adaptation to climate change and careful
stewardship and monitoring of natural capital (e.g., soil, water, pollinators)
critical to sustainable agriculture. Complex problems abhor simplistic
approaches.
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