THE buzzword in relation to Africa is that the continent is rising and one of the key pillars championed to keep it rising is agriculture.
Take the 2003 Maputo Declaration target for example, African governments pledged to allocate 10% of their national budgets to the sector, but the continent could be missing out on a potential cash crop that could transform the lives of smallholder farmers and economies dramatically: marijuana.
Currently illegal in all African countries, marijuana has the potential for very high returns if traded with willing and liberal buyers. If it were to be sold at an average price of $7.6 per gram in Europe, this potential cash crop could generate the continent $79.8billion per year.
This is because, according to 2005 figures by the United Nations Office on Drugs and Crime (UNODC) - the highest levels of cannabis production in the world take place on the African continent.
10,500 metric tons, or roughly 25% of 42,000 metric ton global production, of cannabis herb is estimated to have taken place in Africa in 2005 alone.
Cannabis could be a reliable crop to invest in. It is the world’s most widely used illicit substance with between 119 million and 224 million cannabis users worldwide, and consumption is stable - making it particularly attractive.
This is in part being driven by the increasing legalisation of marijuana for medical use - IBISWorld’s market research report on medical marijuana projects sales to increase to $13.4billion in 2020 from $3.6billion in 2015, largely due to demand from an ageing population with conditions from arthritis to Alzheimer’s disease.
Also, despite it’s illegal status, there is a very strong domestic market for the herb which would protect it from potential trading barriers overseas and shocks.
In fact, much of African cannabis produced is consumed on the continent with an estimated 38,200,000 African adults (or 7.7% of the adult population at the time) taking the drug each year – far higher than the 3.8% of cannabis users among the world population aged 15 to 64.
These markets would be beneficial in particular to Africa’s smallholder farmers who often find themselves at the mercy of controlled markets, bringing them greater returns. Considering the strong policy rhetoric to support Africa’s smallholder farmers, as a way of alleviating poverty and encouraging economic growth, this is a hugely positive factor and already this demographic have been moving in this direction.
For example in Lesotho, the majority of the population engages in farming, though almost a quarter of them are dependent on food aid and 70% live below the poverty line. This even though the small southern African nation is responsible for 70% of the cannabis entering South Africa, making it the third largest source of income in the country. Legalisation could bring potentially huge returns to these farmers who would benefit from a well regulated and protected cash crop, eliminating the fear of arrest and the use of wholesalers and other middle men brought in because of its illicit status.
High returns, costly to combat
Not to mention the potential revenue that taxation on marijuana could bring the state. For example in January 2014 Colorado in the US became the first state to implement retail sales of marijuana for recreational use to adults aged 21 years or older. Almost one year later, 502 licensed medical marijuana dispensaries and 322 retail marijuana stores were operating throughout the state and monthly tax revenues from the retail and medical marijuana markets ended at nearly triple the revenue earned in January, bringing in over $8.5 million in the month of December alone.
Furthermore, the costs of anti-marijuana law enforcement are incredibly high and taxing on African states which already struggle with law enforcement and funds. For example in South Africa, the cost to the state for arresting, prosecuting and applying correctional sanctions in respect of each marijuana offender stands at about some R240,000 - approximately $19,000. Not to mention long-term state projects to curb cultivation like the identification and destroy “Operation Burn the Weeds” project in Nigeria which has been running since 1994.
The case for the legalisation of marijuana develops further because its status has a big impact on that of its close relative: hemp. This is an environmentally friendly, extremely versatile, profitable plant which also has the potential to boost agricultural production in other crops, but it has faced similar blacklisting to marijuana because it is visually and taxonomically identical.
Both are classified as Cannabis sativa, and the only difference between them is the concentration of THC, the psychoactive substance in pot. While marijuana contains at least 3% THC by weight while hemp falls below that. This association however makes the production of hemp problematic even though it is so versatile.
Hemp can be grown for either seed or fibre, and is said to make over 25,000 consumer products including rope, paper and biofuel. The demand for hemp products worldwide has also increased by 233% over the past two years.
The list of it’s benefits is extensive. Hemp has a deep rooting system which is key to preventing soil erosion, it has been shown to pull toxins from soil and, due to its vigorous growth, shading capacity and disease resistance, hemp can be grown without the use of herbicides, pesticides or fungicides - making it particularly useful in crop rotation since hemp stabilises and enriches the soil farmers grow crops on and provides them with weed-free fields without the cost of herbicides.
It can also be easier on the environment to produce than other products. For example when looking at it in comparison to cotton, while cotton requires less energy to grow and process than its competitors, it needs approximately twice as much land as hemp per ton of finished textile. Also, cotton plants need about 50% more water per season than hemp, which can grow with little irrigation.
So while societies across the globe evaluate and make decisions on the legal status of marijuana and the war on drugs, African nations should also make up their own minds. Weighing up the pros and cons within their own context and fully consider the potential economic and social gains or losses from legalising it.