‘Boost local sourcing to ensure African food security’
Food production companies will have to boost the local and regional sourcing of their ingredients to 80% within the next decade if the African continent is to enjoy food security.
This is according to IDH (Sustainable Trade Initiative) global director Kebba Colley, who spoke to Business Times last week.
Conflicts such as Russia’s war with Ukraine have disrupted global food supply chains, making African economies vulnerable to food security threats.
“We needed to develop a programme to support African food-processing companies, small and medium-sized enterprises (SMEs), smallholder farmers, food-processing companies and others to develop local supply chains, rather than importing most of what we eat in staple food.”
IDH was established in 2008 by the Dutch government’s ministry of foreign affairs to work with Dutch and other global companies, such as Unilever, as well as local private companies that do business in developing countries in Africa.
The partnership aims to help emerging and small businesses increase local sourcing, so that by 2033 80% of products are sourced from African countries, regions or the continent.
Colley said Africa imported between $45bn (about R839bn) and $60bn annually in staple foods, with more than 90% of wheat consumed in Nigeria imported.
This was not sustainable, and IDH hoped to support small, medium and micro enterprises (SMMEs) to become prominent foodproducing and -processing companies.
“IDH was created to ensure that strategic partnerships can be formed to create shared value at the local level. It is not to buy and leave, but to help the region develop their value chains.”
It provides agricultural support to companies, investors and entrepreneurs; assists them in developing the market; and helps producers of all sizes to find markets.
IDH also supports small producers through a seed capital facility of between $50,000 and $1m.
“This is a big game-changer because [for] SMEs and emerging farmers in Africa, one of the challenges they face is access to affordable commercial finance.
“Commercial banks prefer to take a client that is interested in taking a loan of $5m or $18m, and they shy away from these SMMEs because of the risk associated with them.”
He said IDH sought to develop SMMEs and food-processing companies to become large food processors that could produce most of what is consumed on the continent.
It has, since 2016, implemented programmes across 15 African countries with a team of more than 100 staff members.
“With the war in Ukraine, the food prices hiked because most of the grains we consume in Africa comes from Eastern European countries like Ukraine.
“If we can transform supply chains in Africa and export some of it, we will be able to have firm foreign reserves increased and become part of the global trade.”
Siobhan O’Sullivan, spokesperson for Premier FMCG — producers of Blue Ribbon bread, Snowflake flour and Iwisa maize meal — said the company already produced nearly 100% of its food products (including, maize, wheat, bread and pasta) in SA.
“Premier sources pasta from our operations in Mozambique, but all other food products are locally produced.
“The grains used for our products include maize that is locally grown and wheat, of which 50% is locally grown and the balance is imported, owing to insufficient local supply.
“All milling takes place in South Africa.” Tiger Brands said it would grow black suppliers within the value and supply chain of the company to create jobs and drive inclusive growth.
The company — which makes family favourites including Tastic rice, All Gold tomato sauce, Koo canned foods and Jungle Oats — said all its food production across 41 manufacturing units was done in South Africa.
“Tiger Brands aims to increase its procurement spend with black agriculture and non-agricultural enterprises, as well as secure agricultural food supply within South Africa through localised sourcing and developing the production and financial capacity of black-owned enterprises through the provision of market access and financial and technical support.”
RCL Foods — makers of Rainbow Chicken products, Sunbake bread and 5 Star maize meal — said 60% of its commodities including wheat and maize, were procured from within SA while the remaining 40% were imported, owing to insufficient production locally.
The food maker said it was committed to improving localisation of food production by working with local enterprises to help expand ownership of the value chain.
“Over the last 17 years our sugar supply chain has steadily transformed to increase local community participation and ownership, with 70% of our Nkomazi cane supply coming from black-owned land in 2023.
“We provide extensive support to our local sugar cane farmers who in total delivered 958,370t of cane to our sugar mills in the last season, 610,000t of which was delivered by small-scale growers.”