Home to more than half of the world’s unused fertile land, Africa has the potential to be the breadbasket of the world. The continent’s market for food has an estimated value of $313 billion today according to The World Bank. By 2030, that figure could surge to more than $1,000 billion. The agriculture industry moreover, is an important of part of the economy in many countries, providing jobs and food to millions of Africans. According to the United Nations, the agricultural population in Africa is 530 million people, and is projected to reach 580 million in 2020. While 48% of the African population relies on agriculture, almost 70% of the population in East Africa relies on the industry.
In order to properly exploit this opportunity to feed the continent and the world, efficient framework and trade policies need to be established. Indeed Dr Mukhisa Kituyi, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD) said in a speech earlier this month that: “[Kenyans] have the opportunity to expand the geographical scale of [their] ambition.”
Current trade policies such as AGOA have done well to push African exports into the United States. However, Karen Kandie of The Star Newspaper notes that while AGOA has granted Africa duty free access to 6,000 products into the American market, most African nations aren’t producing fabric and are importing it from China and India, despite the availability of resources. Ethiopia for example, has 3.2 million hectares of land that is suitable for cotton cultivation. Only 7% is being used today. With a robust manufacturing industry, the ability to export goods to new and old markets is enhanced.
Permitting large countries such as the United States who are able to flout international trade laws through buyouts is something that needs addressing, particularly because of the detrimental effects it has on the agricultural industries of poorer African nations such as Benin, Burkina Faso, Chad, and Mali. The World Trade Organisation exists to stem such practices, and with the 10th WTO Ministerial Conference coming to Africa for the first time this December, there is an opportunity to share some of these grievances.
It is well known that Intra-Africa trade is low, and there has been a notable decline in trade with East Africa Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA) partners. Many therefore see the Tripartite Free Trade Area (TFTA) which involves 26 African countries as a positive step towards boosting agricultural trade within the continent.
But there also needs to be development within the continent. Dr Kituyi argued that infrastructure development that supports trade is essential. He pointed out that connecting the Indian Ocean via Lamu to an Atlantic port, which could then push exports to the Americas should be at the top of the agenda. Kenyan traders ought to look beyond their neighbours. Indeed it is essential to widen the scope of the traditional agriculture trading partners to include more countries. In 2012, it was reported that 40% of Africa’s agricultural exports were imported to the European Union. With important food security levels that need to be met and viable markets within the continent and around the world, there a chance to increase the number of trade partners.
Tapping into Africa’s potential must start with transforming agricultural trade policies and cultivating an environment that is able to fully benefit from both international and intra-Africa trade. Indeed, according to The World Bank the “production of food staples in West Africa such as rice could double and maize could nearly triple if governments rethink their policies and support to agriculture and agribusiness by opening up trade within the region.”