AfCFTA: What plagues a self-sustaining Made in Africa Agricultural value chain?

Kenya’s President William Ruto, on November 9, 2022, announced a deal with South Africa’s Cyril Ramaphosa, where Kenyans would be allowed visa-free entry into South Africa for visits of up to 90 days a year starting January 2023. The previous month of October similarly saw the realization of major moves towards the African Continental Free Trade Area (AfCFTA) agreement when President Ruto flagged off Kenyan tea destined for Ghana.

Before this, another Kenya-Ghana consignment was released in the form of batteries worth $77,000. Rwanda also exported coffee to Ghana for the first time as part of the AfCFTA-guided trade initiative. These moves set the continent for a promising free trade trajectory ahead of 2023. However, an efficient ‘Made in Africa’ value chain in the agricultural sector would demand stakeholders adopt more modern tech systems and empower the farmer. Africa’s agricultural sector still grapples with obsolete business models due to a lack of farmers’ empowerment.

Africa basks in the glory of lush land and abundant harvest. The continent is the world’s largest food basket yet imports its foods. In a report by the African Development Bank (AfDB), all African countries spend about US$35 billion per year importing food. Yet, Africa hosts 60% of the world’s uncultivated arable land. While playing a crucial role in contributing most raw materials in global value chains, Africa is yet to reap its deserved benefits from the process.

Agriculture is increasingly becoming science-led. Modern markets present significant challenges for smallholder farmers. Most farmers are often illiterate and would not understand the technology and financial knowledge for an effective ‘Made in Africa’ modern value chain. According to a report by the Food and Agriculture Organization (FAO), investment in rural education would attract high returns. The report contains a survey revealing the level of education for farm heads in Ethiopia and Tanzania.

In Ethiopia, the head of the average smallholding farm attained two years of schooling, and in Tanzania, 4.6 years. When it comes to using the expertise of international trade, this presents a challenge. Greater literacy would improve nutrient management and technology adoption. Introducing a niche curriculum to educate the farmer on globally competitive produce. At the same time, educated, uptown graduates who can easily understand the global agricultural market need to look towards jobs in the agricultural sector by defying ancient beliefs. For instance, Kenya ran a campaign dubbed ‘Ukulima sio ushamba’- which is Swahili for ‘Farming is not old-school’. This campaign would showcase stories like Caleb Karuga’s, who left journalism for a career in agribusiness.

Similarly, there is lax incorporation of agriculture in Export Processing Zones (EPZs). Most EPZs on the continent work in the clothing, cotton, and textile industries. Capitalizing on EPZs that deal with agriculture would require formalizing the agricultural sector. Each country would specialize in commodities that its farmers produce and process through the EPZs. Employees working for the agricultural EPZs could also be incentivized through programs like medical insurance. Like employees in the manufacturing sector, farmers and other employees in the agricultural value chain face health risks such as those emerging from handling pesticides. Employee morale in the agricultural sector can be formalized through work incentives like medical insurance and comprehensive labor policies.

Some of Africa’s undeveloped terrain is inaccessible due to a lack of infrastructure. Less wasteland would result from improved road and telecommunications infrastructure. By developing intra-African networks through infrastructure like road networks and internet connectivity, the continent can reap significant profits from the AfCFTA-guided trade initiative.

At the launch of the Kenyan tea shipment to Ghana, AfCFTA Secretary-General Wamkele Mene intimated that the continent records losses by failing to process its raw materials. He cited that in 2019, the continent imported $6 billion worth of pharmaceutical products whose components were made in Africa. Such is the case with most products retailed in Africa- a cleaned-up, well-packaged version of home-grown products, “Made in China”, for example. It would take stakeholders’ concerted efforts to support agri-tech innovators with ideas for advancing the sector within the African trading bloc. More significantly, we need to promote discussions challenging the notion that African produce only has value when western nations recognize it.

Linda Ngari is a writing fellow at the African Liberty