Governments in Africa should consider more favourable agriculture policies to create an enabling environment for agriculture and agribusiness to be globally competitive, delegates at the sixth African Economic Forum in Cape Town heard this week.

Agricultural Business Chamber CEO Dr John Purchase said Africa, which spends over $50-billion a year on food imports, required input from both the public and private sectors to increase the continent’s agricultural output.

Products being imported into Africa included cereals, maize, wheat, rice, dairy products and vegetable oils. “With all due respect, [these are] really commodities that we should and could be producing in Africa,” he commented, adding that the real opportunity was in substituting imports.

Agriculture was already the continent’s largest employer, employing 90% of the rural labour force and over 60% of the total labour force. It also accounted for 75% of African domestic trade.

However, the potential to grow the industry was significant with large amounts of underutilised land. Purchase pointed out that in sub-Saharan Africa alone, only 20% to 30% of potentially arable land was being used for agriculture.

He stated that the reasons for the underdeveloped agrofood system in Africa were multiple, but included the forms of the various African governments and their policies, lack of disposable income which limited local markets, a distorted international trade environment, a poorly developed agroprocessing industry, poor productivity and lack of investment.

“We see the net annual investment going into agriculture is far short of the $21-billion needed if Africa is to meet its food security concerns.
“Despite Africa’s huge reliance on agriculture for its gross domestic product, nearly 35% on average, only a handful of countries invest 10% of their annual budgets in agricultural development. Despite the Maputo declaration signed by all heads of state in Africa committing to this target, we just don’t see the commitment that is necessary,” lamented Purchase.

He said African countries needed to harmonise trade agreements and regulatory legislation on a regional basis to boost the agricultural sector. While acknowledging that there was some movement being seen in this area in the form of the Tripartite Free Trade Agreement, he said the progress was “much too slow”.

Also required for industry growth would be the creation of partnerships throughout the value chain, investment in infrastructure to promote movement between markets, greater access to energy, increased research and development, and greater value addition to agricultural products, among many other possible interventions.

Some positive developments were being seen in the sector, such as the African Union Comprehensive African Agriculture Development Programme, which Purchase believed was a “move in the right direction”.

Private sector companies were also showing commitment and large companies, such as Standard Bank, Illovo, Tiger Brands and SABMiller, were moving strongly into African agriculture and agribusiness sectors with significant success.