Regional markets can benefit from transforming basic crops to higher-value products, says UNCTAD
BASIC crops grown in Africa can be made into higher-value products, whether it is by bag ging tea or turning potatoes into frozen French fries, creating jobs, and fuelling growth in the continent, a recent UNCTAD assessment of the continent’s food trade has shown.
According to the United Nations Conference on Trade and Development (UNCTAD), the potential of basic crops to form such agricultural “value chains” remains untapped in several sectors.
While Africa is home to almost 60 per cent of the world’s arable land, it imports some $35 million in food each year, as excessive dependency on imports to feed a continent will present clear risks for the future given the volatile nature of food markets, the report says. Theguardian had reported that the exchange rate policy of the Central Bank of Nigeria ( CBN) may have saved the country about $45 million or N14.1 billion at N314 to $1 yearly capital flight used for importing French fries. However, operators put the figure at $200million or N62.8billion.
The forex policy has made it difficult for fast foods operators and super markets to continue with the importation of French fries, which Nigerians consume with relish.
French fries are finger chips made from potatoes, a crop that is widely grown in many parts of the country. At present food production on the continent is in general characterized by low productivity and high unit costs. This is why, for example, frozen poultry from Brazil out competes fresh poultry from Mozambique in regional markets as well as in the West African markets.
The UNCTAD assessment, part of the report From Regional Economic Communities to a Continental Free Trade Area, also looked at highly-traded commodities in Africa such as avocados, cashews, onions, pineapples, beef and poultry.
The findings provide useful insight for trade negotiators ironing out agricultural policies for Africa’s Continental Free Trade Area (CFTA) ahead of a March 2018 summit of African leaders in Kigali, Rwanda, where the deal is due to be signed.
Many leaders see the continent-wide free trade agreement as necessary to boost intra-african trade, which for manufactured goods dropped from 18 per cent in 2005 to about 15 per cent in 2010-2015, according to the African Development Bank.
If fully implemented, the agreement would free up the movement of people and goods across the continent, currently grouped into trading blocs such as the East African Community, the Economic Community of West African States and the Southern African Development Community, to name a few.