In recent decades, Africa’s food chain has faced perennial issues, undermining its potential and creating a huge gap. The myriad challenges include the food supply chain, environmental issues and external factors impacting people’s lives, families, health, and livelihoods.
According to the Nordic Africa Institute (2022), Africa imports over 80% of food consumed domestically. Despite the existing pressures, the Covid-19 pandemic and Russian-Ukraine crises worsened the situation. The Russian invasion of Ukraine coincided with a period when food supply chains (FSCs) in Africa were still struggling to recover from the Covid-19 pandemic, which disrupted FSC activities over the last two years right along the chain. The pandemic has added up to 40 million undernourished people in Africa and has increased the proportion of Africans who are food stressed by 30% and are in food crisis by 35% (The Nordic Africa Institute, 2022). Today, about a fifth of the continent’s population suffers from hunger – a higher proportion than any other region (WorldDivision, 2022).
Secondly, the Russian/Ukraine conflict continuously pressures Africa’s food chain. Russia and Ukraine are leading players in the global food market, jointly accounting for 12% of globally traded agricultural products (World Integrated Trade Solution database, 2020). The two countries also jointly account for nearly two-thirds of traded sunflower oil, almost a quarter of global wheat exports, a third of maise and a fifth of barley.
ISSUES AROUND THE FOOD SYSTEM VALUE CHAIN IN AFRICA
1. Conflict and Insecurity
Conflict in Africa stems from a constellation of factors, including ethnic rivalries, environmental scarcities, and intergroup crises over resources such as land, water, and development aid. Conflicts disrupt markets and affect development policies that are put in place to assist the neediest of the population. In several instances, farmers cannot farm or move their produce to the markets due to the worsening state of insecurity in several African countries.
For instance, the Democratic Republic of Congo (DRC) and Somalia have experienced one of the worst humanitarian crises in the world, leading to conflict, population displacement, and disruptions in food production and transportation (Norwegian Refugee Council, 2022). Similarly, Burundi, Mozambique, Ethiopia and Northeastern Nigeria have also experienced conflicts leading to mass displacement, further exacerbating food insecurity.
2. Economic Shocks
Africa, with a rising number of undernourished, was estimated to have reached more than 250 million people as the Covid-19 pandemic compounded the effects of climate shocks and conflicts already causing hunger in many parts of the region. From an economic standpoint, import dependency, currency devaluation in several African countries, declining commodity prices and low per capita income are straining the region’s food security.
For instance, Africa is a major food importer, as the food import bill has more than tripled, reaching about US$35 billion yearly over the past decades. Staple food prices in sub-Saharan Africa surged by an average of 23.9 per cent in 2020-22—the most since the 2008 global financial crisis. This is commensurate with an 8.5 per cent rise in the cost of a typical food consumption basket (beyond generalised price increases). The stability of a country’s currency is one of the key drivers of food prices as it affects the costs of imported food items.
3. Weather Extremes
Changes in rainfall, soil quality, weather patterns, and precipitations in many regions of Africa have become the drivers for the food challenges and insecurity in most regions of the continent. Droughts and floods in the Sahel, Lake Chad Basin, or East African region have led people to abandon their homes, moving to neighbouring communities with no adequate resources to cope with their new surroundings.. For instance, in 2020, 1.2 million Africans were displaced by floods and tropical storms.
4. Inadequate Food Supply
The cumulative effects of import dependency have meant that Africa is now the most food-import-dependent region in the world, dedicating more than 13% of its import expenditure to buying food and agricultural commodities (World Development Indicator, 2022). However, this average masks enormous variation, with food representing more than 40% of imports in Benin and Comoros, compared to less than 10% in Congo DRC, South Africa, Tanzania, and Zambia (World Development Indicator, 2022). In addition, fourteen African countries depend on Russia and Ukraine for more than half of their wheat imports, while almost half the continent depends on imports for more than a third of their wheat. Apart from the looming supply constraints, the Russian crisis has already pushed food grain prices up by more than 25%, thus bracing import-dependent African countries for supply shortfalls.
5. Financing Gap
Drought conditions affect large areas of the African region, and crop conditions have deteriorated in many ways, underscoring the need for huge financing in the sector. The combined impact of weather extremes, conflict-related displacement and rising food prices are the drivers of high-level acute food insecurity in the region. For instance, it is estimated that Agricultural small and medium enterprises (agri-SMEs) in sub-Saharan Africa currently face a funding gap estimated to be $74.5 billion. In addition, the financing gap for climate adaptation is at risk of widening due to the fiscal drain on revenue on the back of the COVID-19 pandemic.
6. Low Crop Yields
Food production in Africa remains very low compared to yields in many other parts of the world. For example, with a global average yield of 3.8-4tons/hectare, African farms only produce about 1.2–1.5tons/ha of rice on average (Ada, 2020). One major reason for this is the inadequate supply of fertiliser. Fertilisers are essential in providing nutrients that crops need to grow at their optimum. In Africa, fertiliser use is between 13–20kg/ha, only a fraction of the global average of 150kg/ha (Ada, 2020). Also, the reason is the cost — subsistence farmers cannot afford the quantities of fertiliser they need.
Critical Steps to Transform the Food Sector in Africa
Addressing food security in Africa will require prioritising security as an economic agenda. In addition, improving value add in Africa’s soft agro commodity value chain, developing coordinated agrarian policies to address the demand and supply gaps, bridging the credit gap through digital finance and leveraging innovation and technology to develop the value chain. We have identified the following solutions:
1. Prioritising Security as an Economic Agenda
African governments need to prioritise security as a key agenda by broadening support for the African Peace and Security Architecture, which outlines a comprehensive strategy for conflict prevention and management. In addition, reforms should address internal drivers of conflict and enhance conflict prevention. Similarly, addressing flood issues by adopting and implementing structural measures, such as demolishing buildings along flood plains and enforcing standards and codes. This can be achieved by creating a flood risk map to guide building standards and encourage responsible use of space.
2. Improving Value Add In Africa’s Soft Agro Commodity Value Chain
In Africa, agribusiness’s most unresolved challenge is the lack of value addition. The failure to add value to crops being produced in the region is one of the drivers of the importation of agro products in Africa. For instance, West Africa is the world’s largest producer of cocoa and cotton. Still, around 75% of the commodities are exported in their raw state to Europe and Asia, with only a quarter staying in the region for basic processing. To reduce import dependency, Africa must move from basic processing industries to semi-finished and finished products to reduce its availability to the global market.
3. Develop Coordinated Agrarian Policies to Address the Demand and Supply Gaps
Governments and public-sector institutions must take many policy steps simultaneously to revitalise Africa’s food chain system. Policymakers must prioritise steering policies to develop the food processing industries and improve government spending to address demand and supply issues. More predominantly, Africa’s food and agriculture policies have focused on the supply-side problems of farmers and rural communities.
Meanwhile, in today’s industrial-digital world, forging links with food manufacturing and distribution and with people’s consumption patterns and health will drive significant growth in the sector. For instance, boosting local demand for cash crops, both within countries and regionally. While improving the value-add in the agro value chain is pivotal, there must also be corresponding demand to incentivise investors. The existence of multiple uses, consumers and markets for a crop gives market power to industries.
Until that happens for an extended period, rural roads, irrigation and storage facilities will remain unbuilt, leading to limited private investment in agriculture, low productivity, and high food waste.
4. Bridging the Credit Gap Through Digital Finance
Inadequate financial access makes most farmers underproduce. Access to financial products and services through digital channels can help strengthen the food system ecosystem. For most smallholder farmers that are financially excluded, digital finance is one of the ways to facilitate inclusion. Thus, encouraging farmers as part of the entire financial package. There may be a need to sensitise accessing financial digital products and services. In addition, since smallholder farmers are usually in rural villages with high financial exclusion rates, digital financial services involving agent networks are critical to their adoption.
5. Leveraging Innovation and Technology to Develop the Value Chain
Africa’s Agriculture sector is gradually experiencing a transformative phase with the rise of agri-tech companies. On the one hand, some agro-industry ecosystem players are pushing to solve the age-old problems associated with productivity & farmers’ income. On the other, new-age agri-techs are also enabling Africa’s agricultural practices to match the global standards on critical aspects like challenges to food security, climate change, and adopting sustainable agriculture practices.
Implementing technology-led solutions primarily in the post-harvest stages of agriculture will be sustainable and instrumental in reimagining Africa’s agricultural ecosystem, helping farmers lower production costs, grade better quality and avoid distress sales.
Research & Intelligence Lead