The African Development Bank organised a seminar on “Enhancing Knowledge on the Challenges and Opportunities of Developing and Implementing Staple Crop Processing Zones in Africa”, from 12-14 February 2018 in Tunis.

Building on the analyses and findings of a Bank-led study on a sample of 10 African countries, the seminar aims at drawing lessons and good practices from various African experiences in designing and operating staple crop processing zones (SCPZ). More broadly, it will explore how SCPZs can contribute to achieving socio-economic development goals in Africa.

The analyses, conclusions and recommendations of the study will guide discussions among public sector decision makers on actions to remove barriers and promote agribusiness development on the continent.

Agriculture in Africa provides employment to 61% of the population but only accounts for 25% of its GDP. This gap is mainly due to lack of modernization of the sector, which results in low productivity and reduce the avoidable impoverishment of millions of people. For example, although the continent is home to over 65% of the world’s arable land, it spends nearly US$35 billion annually on food imports.

In addition, Sub-Saharan countries suffer from huge post-harvest losses of up to 35-50% of total production for perishable agricultural products such as fruits and vegetables. The lack of processing of agricultural products is a heavy burden on Africa. This is the case in Côte d’Ivoire, the world’s largest producer of cocoa (40% of world production), which produces little chocolate. Similarly, Tunisia produces 180,000 tons of olive oil annually, but less than 10% of the production is packaged in the country, with the rest being exported in bulk.

Developing agro-industry, one of the priorities of the African Development Bank’s “Feed Africa” strategy, can provide answers to many development challenges facing the continent, particularly in terms of job creation, nutrition, rural development, market access and competitiveness.

The seminar will bring together about 100 representatives from Agriculture and Industry Ministries, particularly from Burkina Faso, Cameroon, Côte d’Ivoire, Guinea, Mali, Mozambique, Tanzania and Togo.

A visit to the Bizerte Technopole is scheduled on the second day of the conference.

Background

With the approval of its pdf Feed Africa Strategy (7.93 MB) , the Bank has saddled itself with the onerous task of transforming the African agriculture. The transformation of the African agriculture sector is long overdue and it is the only way to unlock Africa’s enormous potential. The agricultural sector in Africa perfectly illustrates the importance of public policies in macroeconomic modelling and sustainable development. It unquestionably represents the sector that employs the most Africans, what Arthur Lewis referred to “disguised unemployment”.

Agriculture in Africa provides 61% of jobs but accounts for only 25% of GDP, a gap explained mainly by lack of modernization of the sector (little or no mechanization of the sector, poor utilization of inputs, lack of value addition etc.) which culminates into low productivity, consequently leading to impoverishment of the people that is avoidable. For example, despite the fact that over 65% of the world’s arable land is found in Africa, the continent annually spends nearly USD 35 billion in food imports to counter food insecurity.

This situation illustrates a context of a planned failure when one considers that the low level of efforts made for the development of the sector constitutes a missed opportunity for meeting the various development challenges targeted in the UN’s Sustainable Development Goals (SDGs) and the Bank’s High-5s, to name just a few. With the youngest population in the world and an unemployment rate exceeding 10%, Africa has no choice but to undertake the necessary transformation of its agricultural base, to reverse the current economic trends of the continent. This means that the agricultural sector must become the first investment area in the continent, hence the need for clear policies to attract investment from both the public and private sectors, including foreign investors.

The Bank’s Sector Strategy – Feeding Africa – has largely demonstrated the added value of investing on all fronts in agriculture. It estimates the need for funding at nearly US$400 billion for the next 10 years, and expects that a sustained investment of US$32 billion to US$40 billion per year would generate an estimated US$85 billion in revenue from 2025, an estimate that would continue to grow if one considers the incremental effect of knowledge gains. In practice, investment rates fall well below these estimates (about US$7 billion per year instead of 25 to 33), making resource mobilization crucial for successful transformation.

One of the key areas targeted by the Bank’s strategy is the development of agribusiness, which revitalization would provide answers to the many development challenges the continent is facing, among which are issues of job creation, nutrition, rural development, market access and competitiveness, etc. Unfortunately, agribusiness is still at an embryonic stage in Africa, particularly in sub-Saharan countries, which consequently suffer huge postharvest losses of up to an average of 35 to 50% of the total achievable production for perishable agricultural commodities such as fruits and vegetables, and between 15 and 25% for cereals.

The economic cost Africa pays due to the missing links in agricultural value chains such as the processing of agricultural products is challenging, as illustrated by Côte d’Ivoire, the world’s leading cocoa producer (accounting for 40% of world cocoa bean production), hardly produces chocolate. At the same time, the French giant Cémoi set up a plant in 2015 to produce between 2,000 and 3,000 tons of chocolate per year. In fact, only 33% of Côte d’Ivoire’s cocoa production undergoes a first transformation (crushing of beans) in the country.

In the same vein, Tunisia produces 180,000 tons of olive oil annually, of which less than 10% is packaged in Tunisia, the rest being exported in bulk. Cameroon produces about 2,000,000 tons of plantain, which is almost totally sold unprocessed or lost after harvest (40%). The Bank’s agricultural transformation goals target these important margins in the agricultural value chains, as well as the multiple job creation opportunities resulting from a dynamic agribusiness sector.

Among the agribusiness development initiatives, the Bank is promoting the development and implementation of SCPZs as a promising approach to inclusive and participatory financing, including marketing of agricultural products in the RMCs. SCPZs are Feed Africa Flagship initiatives which are “agro-based spatial development initiatives, designed to concentrate agro-processing activities within areas of high agricultural potential to boost productivity and integrate production, processing and marketing of selected commodities consisting of geographical areas with a high concentration of companies involved in the range of activities of production, processing and marketing of agricultural products”.

Experienced for decades elsewhere in the world including Africa (more particularly North Africa where some countries such as Tunisia and Morocco are well advanced), this approach is now generating renewed interest in the context of the implementation of the Feed Africa strategy where the need for financing is enormous. The seminar is planned in this context to be an opportunity for knowledge dissemination as well as a platform for exchange with and between RMCs on the challenges and necessary conditions for successful transformation proceeding from agribusiness revitalization.