CURRENT projections indicate that half of Africa’s population will live in cities by 2030, and though disposable incomes are expected to increase by 5.6% per year, raising total purchasing power from $420billion to $1trillion, low productivity on African farms, and numerous barriers to trade means that African farmers won’t be the ones feeding these bustling cities, says a report by the Africa Progress Panel.
Urbanisation has been touted as a key component of development, as it provides a dense, easily accessible market for trade, but the trajectory Africa is on locks out its own farmers from profiting from these shifting demographic trends.
In countries such as Bangladesh, India and Vietnam, a boom in agricultural production found a ready market in local urban centres, creating a virtuous supply-demand cycle that made both the cities and rural areas prosperous.
But instead of creating markets for African farmers, African cities spend vast amounts on food imports. In 2000, Africa was a net exporter of food, but today, the continent imports far more than it produces.
West Africa, for example, accounts for one-fifth of global rice imports; Nigeria’s rice importation bill stands at more than $2billion per year. The reason: average annual rice production in Nigeria has stagnated at 28kg per capita since 1990, while per capita consumption has increased from 18kg to 34kg. As a result, rice imports have been growing at rate of 11% a year to fill the gap. Furthermore, in 2011, African nations spent $35 billion on food imports, with intra-African trade making up just 5% of that.
In some areas, it’s simply difficult to get anything out of the ground. First, Africa’s soils are among the oldest in the world, because the continent has been stable geologically for a much longer period of time than the rest of the world with a few exceptions in the east and central African Rift Valley system.
African soils have therefore been subjected to weathering and erosion for longer, even without factoring in human activity. The Nile in Egypt is a good example of the negatives effects of such erosion.
Egypt gets more than just River Nile water
Where the eroded soil ends up, however, confirms that African soils are not necessarily less fertile than others. For millennia, the Egyptian civilization was completely dependent on the flooding of the Nile, but ancient and contemporary Egyptians weren’t just waiting for the water, they were keen on the rich soil that the river’s flow would deposit on the banks of the Nile, soil stripped from the Ethiopian highlands by torrential rainfall and carried by the Blue Nile (Abbay).
Today, so much fertile soil flows into Lake Victoria from the surrounding highlands in Kenya, Uganda, Rwanda and Tanzania that the bottom of the lakebed could possibly be Africa’s richest source of fertiliser.
But until there is a way to mine Africa’s lake deposits, farmers have to grapple with the loss of valuable topsoil on the land. In much of the continent, land degradation is a serious problem, both because of natural processes and poor farming techniques, one estimate indicates that much as 65% of arable land, 30% of grazing land and 20% of forests are already damaged.
In sub-Saharan Africa the economic loss of land degradation is estimated at $68 billion per year, affecting an estimated 180 million people; in some areas of Africa, agricultural productivity declined by half between 1981 and 2003 as a result of soil erosion and desertification processes.
In Ethiopia, the annual losses from land degradation reach an estimated 4% of GDP; in Malawi the costs could be as high as 11% of GDP.
But it’s not just the soil that is a headache, it’s getting produce to reach intended markets. Africa’s bad rural roads mean that the “first mile”, from the farm to the nearest village market, is the most expensive per kilometre.
“Exceptionally” high profit margins
And although generally, the costs for Africa’s trucking operators where the roads are passable are not much higher than costs in the rest of the world, profit margins are “exceptionally high” says the Africa Progress Panel, particularly in Central and West Africa where trucking cartels help maintain profits at 60% – 160%.
But it pays to bring down these road mafias when Rwanda reformed its trucking rules in the mid-1990s, prices fell by 75% in real terms, the report states.
Although many African governments like to talk integration, in practical terms, they are more involved in protectionist policies and erecting robust barriers to trade. According to the report, evidence from some regions suggest that non-tariff barriers (NTBs), such as quotas and complex licensing procedures, are increasing even as tariffs diminish.
One study of fertiliser markets in West Africa found that individual countries were stipulating their own blends of inputs, and restricting market entry for fertiliser products with different blends. Between 2000 and 2010, the total number of NTBs applied in Zambia, Malawi and Mozambique increased from 400 to over 1,400.
Traders travelling from Ghana to Nigeria are reported as having to pay 40 different fees. On one estimate, eliminating NTBs in maize trade between Kenya, Tanzania and Uganda would generate benefits of $5 billion.
Why hunger is stubborn in Africa
The troubles facing the agricultural sector partly explains why Africa’s recent economic boom has done little to reduce hunger in the continent. More than a third of African children are stunted by the time they reach their fifth birthday. Overall malnutrition levels are just 5 percentage points lower in 2013 than in 1990, and in absolute terms, the number of Africans who don’t get enough to eat has actually grown from 173 million to 233 million.
Still, a prosperous agricultural sector remains Africa’s best hope for getting out of poverty. The International Food Policy Research Institute has found that on average, agricultural growth reduces poverty roughly twice as much as growth in other sectors.
An income of less than US$1.25 a day is the widely accepted definition of extreme poverty. Half of the extreme poor in India and China live on US$1 to US$1.25. They stand close to the exit door leading out of extreme poverty. By contrast, only one in five of Africa’s poor are in this position. The average poor person in Africa lives on only 70 cents.
Over the past decade, per capita incomes in Africa have grown at around 3% a year. If Africans living on 70 cents a day were to see an increase in consumption at this level over the next 15 years, their incomes would reach US$1.26 in 2030 – a desperately narrow escape from poverty.
On average, 1 percentage point of growth in Africa reduces poverty by 0.69%, or around one-third of the global rate. In other words, Africa has to grow three times as fast to achieve the same poverty reduction impact.