Africa’s population growth is one of the fastest in the world. In 2020, the population was estimated to be 1.3 billion and is projected to reach 2.5 billion by 2050. This surge in population is putting a severe strain on the continent’s struggling food supply which is currently heavily dependent on imports and record amounts of wastage.
According to the African Development Bank, Africa’s food imports will reach $90 billion by 2030 unless a drastic change occurs. The United Nations Environment Programme also reports that up to 50 percent of food produced in Africa is lost or wasted, exacerbating the existing challenges.
In addition to man-made factors, climate change continues to be a significant threat to food security in Africa, particularly with the continent experiencing more frequent and severe weather events such as droughts and floods.
According to the World Bank, the number of people in Sub-Saharan Africa facing food insecurity due to climate shocks is projected to increase from 43 million in 2018 to 50 million by 2030.
Particularly, drought trends in the Horn of Africa, including Kenya and Uganda, have worsened, surpassing the 2011 famine that caused hundreds of thousands of deaths.
Sustainable agriculture practices and innovative food production methods are urgently needed in Africa to address these pressing issues. Infrastructure development, capital accessibility, and market expansion in East Africa’s commodities industry require urgent attention to enhance food security in the region and throughout the continent.
Facilitating cross-border trade and strengthening regional trade volumes should also be prioritised to improve food availability.
In East Africa, Kenya serves as a gateway to the other regional countries. Providing necessary support to the Kenyan commodities market would translate to some successes for other parts of the region if regional trading is supported.
The International Food Policy Research Institute (IFPRI) points out that one of the best ways Africa can feed itself and achieve food security is by facilitating regional trade.
In 2018, intra-Africa trade in food and agricultural products was worth $13.6 billion, while imports from outside the continent were valued at $49.4 billion - more than triple the value of regional trade.
In the same year, the agreement establishing the African Continental Free Trade Area (AfCFTA) was signed. However, it was not operationalised until 2021.
AfCFTA is designed to deepen integration, foster trade and investment, enhance the mobility of capital and labour, support industrialisation, and the development of a dynamic services sector.
Two years post-AfCFTA, a 2023 report by UNCTAD indicates that intra-Africa trade now accounts for 14.4 percent of total Africa export, but forecasts show the AfCFTA could boost this by about 33 percent and cut the continent’s trade deficit by 51 percent.
To fully realise the potential of cross-border trade in East Africa and achieve food security and sustainability goals, it is crucial for private stakeholders to collaborate closely with governments.
The private sector brings valuable expertise, innovation, and investment to the table, while governments provide regulatory frameworks and infrastructure that facilitate trade and enable businesses to thrive.
Moreover, a standardised model for deploying infrastructure, accessing capital, and expanding markets regionally can streamline cross-border trade, increasing efficiency, reducing costs, and boosting productivity in the commodities sector.
This approach would create a more conducive business environment and make it easier for small and medium-sized enterprises (SMEs) to participate in cross-border trade, which is vital for creating more jobs and income opportunities and uplifting local economies.
For instance, improving transportation networks, developing regional value chains, and harmonising trade policies and regulations can lower the costs of transporting goods across borders, facilitate cross-border trade, and create opportunities for SMEs to expand their markets.
Additionally, providing access to finance and markets through initiatives like agricultural credit guarantees and commodity exchanges can help farmers and SMEs to secure financing and access larger markets.
By partnering with private stakeholders, governments in East Africa can help develop a conducive business environment that supports sustainable cross-border trade and ensures food security for their populations. This partnership will be a critical driver for boosting the agricultural sector, enhancing economic growth, and reducing the risk of food shortages.
Ultimately, this will promote regional integration and contribute to achieving the African Union’s Agenda 2063 vision of a prosperous, integrated, and peaceful Africa.
In less than a year of expanding into the East Africa market from Nigeria, AFEX has invested up to $10 million and worked with 22,000 farmers in Kenya and Uganda, resulting in over 12,000 metric tonnes of increased trade volumes.
AFEX has done this while combating unique obstacles that hinder agricultural productivity and trade. For example, in Uganda, small farm sizes and exceptionally high humidity levels pose significant challenges to crop yields. In response, AFEX introduced drying facilities to combat the adverse effects of humidity on agricultural commodities.
For Kenya, price volatility in the market has been a major obstacle, making it difficult for stakeholders in the agricultural value chain to plan effectively. AFEX alleviates this by buying directly from farmers, ensuring better price stability and providing proper storage and collateral management procedures to maintain quality control and consistency.
Farmers in Kenya have also benefited from AFEX’s tailored input programme, which provides them with inputs for improved productivity.
Intra-Africa trade faces additional hurdles due to varying grading standards for commodities across different markets, and this discrepancy prevents certain commodities from crossing borders. Moreover, the requirements for cross-border permits differ from country to country, adding further complexity to trade processes.
AFEX aims to facilitate smoother trade flows and expand market opportunities for farmers by defining and ensuring grading standards and enabling price discovery and efficient clearing and settlement on its technology-enabled trading platform. However, AFEX cannot solve Africa’s food security challenge alone.
Cross-border trade plays a pivotal role in addressing food security challenges in Africa, and several African countries possess significant agricultural potential and interconnected markets.
By harnessing their strengths, they can emerge as key players in their region while bolstering regional food security. It is clear that facilitating access to capital for farmers and agribusinesses is crucial for their growth and that of their local economies.
Governments and financial institutions can work together to provide financial resources, credit facilities, and investment incentives, empowering agricultural stakeholders to adopt modern farming techniques, invest in technology, and scale up their operations.
Collaboration and investments in infrastructure development and cross-border trade initiatives will not only address immediate food security concerns but will also lay the foundation for long-term economic growth and sustainability.
By working together, African nations can meet the demands of their growing populations and ensure that food security becomes a reality for all.
- Tabitha Njuguna is the Managing Director of AFEX Fair Trade in Kenya and has over 10 years of experience in grants management, inclusive finance, economic development, agribusiness, energy, and financial inclusion funds, spearheading projects from inception to close out in East and West Africa, and the United Kingdom.