Agriculture

How Can Four Strategic Pillars Transform Trade and Economic Growth in Africa?

Last week, I was hon­ored to par­tic­i­pate in the Nairo­bi Inter­na­tion­al Trade Fair, which con­cludes today. This year’s theme was com­pelling – Pro­mot­ing Cli­mate Smart Agri­cul­ture and Trade Ini­tia­tives for Sus­tain­able Eco­nom­ic Growth. This theme cap­tures the one word that will dri­ve Africa rapid­ly toward devel­oped-world sta­tus — trade.

If Africa is to keep pace with and even­tu­al­ly rival devel­oped world economies like the USA, Chi­na, and Japan, it must trade sub­stan­tial­ly more than it does today. As report­ed, there is a chron­ic trade imbal­ance between Africa and devel­oped world coun­tries. Even more trou­bling is that intra-African trade is quite low, with less than 18% of African exports stay­ing with­in the con­ti­nent, com­pared to 59% in Asia and 68% in Europe. To bridge these gaps, we must focus on boost­ing intra-African trade and lev­el­ing out the trade imbal­ance with the devel­oped world by doing the fol­low­ing four things.

First­ly, we must increase the qual­i­ty of our prod­ucts. When he opened the Nairo­bi Trade Fair, Deputy Pres­i­dent Rigathi Gach­agua pur­chased two cham­pi­on bulls worth Sh1.6 mil­lion. You would have to sell as many as twen­ty reg­u­lar bulls to make such mon­ey. The cham­pi­on bulls are sub­stan­tial­ly more expen­sive because they are spe­cial breed Boran bulls, known for their supe­ri­or genet­ics and pro­duc­tiv­i­ty. Qual­i­ty is key. The glob­al mar­ket val­ues prod­ucts that meet high stan­dards, and Africa must invest in qual­i­ty con­trol, cer­ti­fi­ca­tion, and stan­dards to com­pete effec­tive­ly. By improv­ing the qual­i­ty of agri­cul­tur­al and man­u­fac­tured goods, we can demand high­er prices and expand mar­ket access.

Sec­ond­ly, we must add val­ue to our agri­cul­tur­al prod­ucts through pro­cess­ing. Did you know that wines can be made from water­mel­on and cac­tus, in addi­tion to the more com­mon grapes and berries? At the Nairo­bi Inter­na­tion­al Trade Fair, Jomo Keny­at­ta Uni­ver­si­ty of Agri­cul­ture and Tech­nol­o­gy (Jku­at) show­cased its fruit wines, includ­ing water­mel­on wine, which they began pro­duc­ing in 2006 to curb post-har­vest loss­es. Com­mer­cial­ized in 2007 after approval by the Kenya Bureau of Stan­dards, a 750 ml bot­tle of the wine con­tains 12% alco­hol and sells for Sh1,000. With fur­ther research into cac­tus wine under­way, Jku­at also pro­duces wine from bananas and pineap­ples. I sug­gest that the Min­istry of Trade enacts poli­cies that will boost the mar­ket share of such local­ly pro­duced prod­ucts across Africa and the world.

Third­ly, we must strength­en region­al inte­gra­tion and infra­struc­ture. A sig­nif­i­cant obsta­cle to intra-African trade is the lack of suf­fi­cient infra­struc­ture. Poor road net­works, inad­e­quate rail sys­tems, and under­de­vel­oped ports have ham­pered the move­ment of goods between African coun­tries. Accord­ing to the African Devel­op­ment Bank (AfDB), Africa needs approx­i­mate­ly $130–170 bil­lion per year to close its infra­struc­ture gap. With­out mod­ern infra­struc­ture, trad­ing across bor­ders remains inef­fi­cient and cost­ly. Strength­en­ing region­al inte­gra­tion through ini­tia­tives like the African Con­ti­nen­tal Free Trade Area (AfCF­TA) can address some of these issues. AfCF­TA, which cov­ers 54 of Africa’s 55 coun­tries, aims to cre­ate a sin­gle mar­ket of over 1.3 bil­lion peo­ple with a com­bined GDP of $3.4 tril­lion. To make this a real­i­ty, Africa needs to stop cor­rup­tion that bleeds our wealth and invest in cross-bor­der infrastructure—roads, rail­ways, and ports—to low­er trans­porta­tion costs, stream­line cus­toms pro­ce­dures, and ensure smoother trade flows.

Fourth­ly, we need to boost dig­i­tal trade and e‑commerce. Dig­i­tal trade is a game-chang­er that Africa must lever­age. The COVID-19 pan­dem­ic accel­er­at­ed the adop­tion of e‑commerce glob­al­ly, and Africa saw a 21% growth in online shop­ping. Despite this progress, dig­i­tal trade remains under­uti­lized, with bar­ri­ers such as inad­e­quate inter­net pen­e­tra­tion, lim­it­ed dig­i­tal lit­er­a­cy, and lack of robust pay­ment sys­tems. Africa can boost trade by embrac­ing dig­i­tal solu­tions. Addi­tion­al­ly, increas­ing invest­ments in inter­net infra­struc­ture and dig­i­tal lit­er­a­cy pro­grams can help busi­ness­es, par­tic­u­lar­ly MSMEs, reach glob­al mar­kets. Accord­ing to the Inter­na­tion­al Trade Cen­tre, dig­i­tal­iza­tion could increase African exports by over $4 bil­lion annu­al­ly. There­in lies the answer.

Now, do you agree that these four strate­gies could be game chang­ers? What sim­ple action will you take to make a dif­fer­ence, even as pol­i­cy­mak­ers play their part? Think green, act green!

About Dr. Kalua Green

He is the Chief Stew­ard of Green Africa Group, a con­glom­er­ate that was envi­sioned in 1991 to con­nect, pro­duce and impact var­i­ous aspi­ra­tions of human­i­ty through Sus­tain­able Mobil­i­ty & Safe­ty Solu­tions, Eco­pre­neur­ship & Agribusi­ness, Ship­ping & Logis­tics, Envi­ron­men­tal Pro­tec­tion Ini­tia­tives, as well as Hos­pi­tal­i­ty & fur­nish­ings sectors

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