W3 Agriculture Policy Brief

THE AfCFTA AND TRANSFORMATIVE INDUSTRIALISATION WEBINAR SERIES

AGRICULTURE – FOOD PROCESSING VALUE CHAINS, RETAIL AND FOOD SECURITY POLICY BRIEF 2021, Cape Town

Linkoping House 27 Burg Road Rondebosch 7700 Cape Town T +27 (0) 21 650 1420 F +27 (0) 21 650 5709 E mandelaschool@uct.ac.za www.mandelaschool.uct.ac.za

Design: Mandy Darling, Magenta Media

Contents Introductory Note........................................................................................................................................... 2 Speaker Bios..................................................................................................................................................... 3 Introduction...................................................................................................................................................... 6 Agriculture as a driver of Africa’s structural transformation................................................................. 7 How will AfCFTA incentives contribute to turning around the huge food import bill of the continent? ........................................................................................................................ 8 The impact of the Covid-19 pandemic on agriculture in Africa: Disruptions and opportunities in the midst of present realities............................................................................... 10 Agricultural Productivity – Experiences of different African countries ............................................ 11 Conclusion and suggested policy recommendations for further engagement................................12 References ..................................................................................................................................................... 14

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Introductory Note AfCFTA and Transformative Industrialisation Dear Reader, 2020 proved to be a challenging year for people across the world.

Of note, the impact of the Covid-19 pandemic on families, communities and nations reminded us of the need to strengthen democratic governance and pursue development sustainably. The African Continental Free Trade Agreement (AfCFTA) presented a unique opportunity to explore the challenges and opportunities for better integration of regional value chains in the pharmaceutical, agricultural and textile industries.

Successful delivery of our four-part webinar series was made possible through partnership with the Centre for Competition, Regulation and Economic Development (CCRED) at the University of Johannesburg, the Centre for Comparative Law in Africa (CCLA) and the Policy Research in International Services and Marketing (PRISM) at the University of Cape Town, Trade and Industrial Policy Strategies at the University of Pretoria, the Toyota Wessels Institute of Manufacturing Studies (TWIMS) in Durban, the Nigerian Institute of Advanced Legal Studies and the Africa International Trade & Commerce Research in Nigeria.

We are especially grateful to our distinguished speakers who shared their experience and recommendations, thereby contributing to

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vibrant discussions during our webinar series.

We had the opportunity to relay these recommendations to the Secretary General of the AfCFTA Secretariat, H.E. Wamkele Mene, in December 2020.

This policy brief, Agriculture – Food processing Value Chains, Retail and Food Security, reiterates the importance of the agricultural sector for Africa’s industrialisation and overall inclusive economic development.

We would like to thank Mr Babatunde Abiola and Dr Clever Chikwanda, members of our research team on the AfCFTA and Transformative Industrialisation Project, who compiled this policy brief.

This work forms the foundation in our efforts to build a network of experts working on issues related to transformative and sustainable industrialisation through the Industrialisation and Development Forum. In 2021, we will continue this series to explore digitisation and opportunities for green industrialisation.

We hope you enjoy reading this report and look forward to your comments. If you would like to receive more information about this ongoing project, please contact Ms Mabel Nederlof-Sithole, who is leading our Building Bridges Programme (mabel.sithole@uct.ac.za).

Click here to view webinar videos.

Warm regards, Faizel Ismail

Agriculture – Food Processing Value Chains, Retail and Food Security • POLICY BRIEF

Speaker Bios Moderator

Speakers

Prof Carlos Lopes (Professor, The Nelson Mandela School of Public Governance)

Ms Jane Ezirigwe (Research Fellow, the Nigerian Institute of Advanced Legal Studies)

Carlos Lopes is a professor in the Mandela School of Public Governance at the University of Cape Town, a visiting professor at Sciences Po, Paris, and an associate fellow in the Africa Program of Chatham House. He has occupied several leadership positions across the UN system, including policy director for Secretary-General Kofi Annan and executive secretary of the UN Economic Commission for Africa. He has authored or edited more than 20 books and feature articles in Project Syndicate, CNN, Le Monde, Financial Times, China Daily, The Guardian, New African and Jeune Afrique, amongst others. His latest books are “Africa in transformation. Economic Development in the age of doubt” (Palgrave McMillan, 2019) and “Structural Change in Africa. New narratives, misperceptions and development in the 21st century” co-authored with George Kararach (Routledge, 2020). He is a member of the African Union reform team led by President of Rwanda Paul Kagame and doubles as the organisation High Representative for Partnerships with Europe as well as a member of the Global Commission for Economy and Climate, African Academy of Sciences, and Lisbon Academy of Sciences, and holds seats in many boards including the African Leadership Institute, Waterloo University and Geneva Graduate Institute.

Jane Ezirigwe is a Research Fellow at the Nigerian Institute of Advanced Legal Studies with research interests focused on food and agricultural law, human rights, and law and development. She is also an adjunct lecturer at Bingham University, Karu, Nigeria, where she teaches international trade law at the undergraduate level.

Ms Ezirigwe has 28 publications in these areas in reputable peer-reviewed journals and has presented her research works in several local and international conferences. She had her legal and professional development training from University of Abuja, Nigerian Law School, Harvard Law School, University of London, and ESUT Business School and is concluding her doctoral studies at the Faculty of Law of University of Cape Town. She has worked in private legal practice, corporate practice and, presently, in academia and research.

Ms Ezirigwe is the co-coordinator of the NIALS training course on trade and regional integration law and practice. She was a national committee member of the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Federal Ministry of Trade & Investment for the National Trade Summit for Skilled and Vocational Artisans in 2018. She was also a member of the House of Representatives’ Technical Committee on Environmental Law and Policy in 2017.

She is an International Bar Association Scholar, a Moseneke Grant Scholar, an Alexandre Burman Memorial Grant scholar, an Olu Akinkugbe Fellow on Business Law in Africa, and a Fellow of Young African Leaders Initiative. She has received several academic and research awards for her contributions to the development of law.

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Mr Wandile Sihlobo (Chief Economist, Agricultural Business Chamber of South Africa)

He has been involved in a range of processes related to South African and African industrial development including:

Wandile Sihlobo, an agricultural economist by training, is chief economist of the Agricultural Business Chamber of South Africa (Agbiz).

Sihlobo was appointed as a member of President Cyril Ramaphosa’s Presidential Economic Advisory Council in 2019 after serving on the Presidential Expert Advisory Panel on Land Reform and Agriculture between 2018 and 2019. Sihlobo is also a member of the Council of Statistics of South Africa (Stats SA).

• Development and implementation of South Africa’s National Industrial Policy Framework (NIPF) and Industrial Policy Action Plans (IPAP)

He is a commissioner at the International Trade Commission of South Africa (ITAC). Sihlobo is a columnist for Business Day and Farmers Weekly magazine. He is a member of the Agricultural Economics Association of South Africa (AEASA). Sihlobo is an author of “Finding Common Ground: Land, Equity and Agriculture” published by Pan Macmillan in March 2020. He is also a contributor to the book “Recession, Recovery and Reform” published by Jacana in August 2020. Sihlobo holds a Master of Science degree in Agricultural Economics from Stellenbosch University.

• Joseph Stiglitz’s Initiative for Policy Dialogue (IPD): Africa Task Force

Mr Nimrod Zalk (Industrial Development Policy and Strategy Advisor, South African Department of Trade and Industry) Nimrod Zalk is Industrial Development Policy and Strategy Advisor at the South African Department of Trade and Industry (dti). Prior to this he was Deputy Director-General of the Industrial Development Division of the dti. He also sits on the board of the South African Industrial Development Corporation.

Nimrod holds an MSc in economics (with reference to Africa) from the University of London’s School of Oriental and African Studies (SOAS).

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• Design and implementation of key industrial policy initiatives including various sector strategies, industrial financing instruments and leveraging procurement for industrial development • Development of the dti’s sector strategy methodology • The South African Renewables Initiative (SARi) • Measures to deal with monopolistic behaviour in the South African economy

• Ethiopian industrial development and policy • The NEPAD process He has authored papers on a range of topics including: industrial development and policy, competition and competitiveness and regional economic development. He has delivered lectures on industrial development and policy at the following institutions: University of the Witwatersrand, University of Johannesburg, University of Stellenbosch and University of the Western Cape.

Dr Osita Aniemeka (Chairman, Board of Trustees – Africa International Trade) As Founder and President, sub-Saharan Open University (SSOU), Dr Osita Aniemeka leads the African institution to bring disruptive learning in entrepreneurship, agropreneurship, innovations, and exponential technologies for business incubation and acceleration. SSOU emphases technological and scientific contents for the transformation of the African continent.

In 2010, Dr Aniemeka became fulltime faculty at Ibrahim Badamasi Babangida University,

Agriculture – Food Processing Value Chains, Retail and Food Security • POLICY BRIEF

Lapai, Niger State and in 2011 was appointed director of the Center for Learning Communities, where his work involved global education and the establishment of the university’s entrepreneurship education program.

With a PhD in Communication and Entrepreneurial Leadership, Osita worked for the United States Agency for International Development (USAID) Project–NEXTT, growing the potentials for agriculture and agribusiness on the LagosKano-Jibiya (LAKAJI) Corridor Agropreneurs.

He is consultant to DFID-ENABLE2 and worked with UNDP | FMARD Capacity Development Trajectory of the Nigerian Agricultural Transformation Agenda (ATA). He was country director for the Nigeria Development Gateway Collaborative (World Bank-Development Gateway Foundation) and customer service agent for the legendary American Express Card in Huntsville, AL. Dr Aniemeka was senior research fellow at the Foundation for African Arts and Letters (FAAL) in New York before returning to Nigeria to join the faculty and senate of IBB University.

As a member of the Global Steering Committee of the NGO Working Group on the World Bank, he represented the Africa Region on the Global Steering Committee and was named Man of the Year in 2002.

A skilled facilitator and capacity development specialist with expertise in entrepreneurial leadership, innovation and change management, Dr Aniemeka gained extensive experience in SME development strategy, performance management, media, non-profit governance, donor relations, public-private dialogue/partnership and knowledge assets management working in the United States and in Nigeria.

Dr Samba Kawa (Team Lead, Feed The Future Program, USAID) Dr Samba Kawa is coordinator and team lead of the Feed the Future (FTF) Program in the Economic Growth and Environment Office at USAID/Nigeria.

Kawa joined USAID in 2011 and has worked in USAID’s Bureau for Resilience

and Food Security in Washington, D.C., and in USAID/Liberia. He has served as country support officer for USAID missions in Ghana, Madagascar, Malawi, Mozambique, Zambia, and Zimbabwe. Kawa joined USAID/Nigeria in July 2019.

Before coming to USAID, Kawa was a New York City (NYC) Teaching Fellow and middle school science teacher in NYC, where he also worked for a non-profit organisation in Manhattan.

Kawa was also Variety Maintenance Officer in a GIZ-funded Seed Multiplication Project in Sierra Leone. Kawa holds a PhD and MS degree in soil science from North Carolina State University in Raleigh and in education from Mercy College, NYC. Mr Ziad Hamoui (Founding Member and Past President, Borderless Alliance in West Africa) Ziad Hamoui is the founding member and past president of the Borderless Alliance in West Africa, a regional, private sector-led, multi-stakeholder advocacy group that promotes economic integration in West Africa and tackles barriers to trade and transport in the region.

He is currently the national president of its local chapter in Ghana.

Mr Hamoui has 17 years of private sector senior management experience in Ghana, as Executive Director of Transport and Operations at Tarzan Enterprise Ltd., a post that he continues to hold since 2002.

Mr Hamoui is a chartered fellow of the Chartered Institute of Logistics and Transport (CILT)Ghana and an active member of its governing council, a co-founder of a recently-launched grass-root trade advocacy campaign in Ghana (“Trade Facilitation Coalition for Ghana”), and a member of several advisory committees in the areas of trade policy, trade facilitation, security and agribusiness.

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Introduction One of the driving forces behind Africa’s structural transformation is agriculture. Evidence suggests that countries with increased productivity across the globe benefitted from economic growth sustained by agricultural transformation. Africans have an opportunity now, more than at any time before, to change their lives through increased agricultural productivity and enhanced agribusiness that connects smallholders to national, regional and global value chains. Food security has been given rightful prominence in the debate, but cannot replace real transformation. It is important to renew the building blocks necessary for a deeper discussion of the connection between agriculture and industrialisation.

Issues of access to energy, infrastructure such as irrigation, transport and financing of inputs, such as enhanced seeds or fertilisers, contribute to a poor ecosystem. Africa possesses the largest unused reserves of arable land but suffers from enormous post-harvest loss and low productivity The AfCFTA creates a massive regional market for African exports and a major opportunity for Africa to revive its agriculture and agricultural processing regional value chain (RVC). The Mandela School hosted a webinar series on “Agriculture - Food Processing, Retail and Food Security Value Vhains” as part of its AfCFTA and Transformative Industrialisation Webinar Series. This policy brief sets out the policy considerations put forward by the panellists.

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Agriculture – Food Processing Value Chains, Retail and Food Security • POLICY BRIEF

Agriculture as a driver of Africa’s structural transformation Evidence suggests that countries that have increased productivity across the globe benefitted from economic growth sustained by agricultural transformation (Senbet & Simbanegavi, 2017). Additionally, recent studies have confirmed that there is a correlation between growth in agriculture and poverty reduction (Christiaensen & Martin, 2018). Food security has dominated the debate but cannot replace real transformation. Senbet and Simbanegavi (2017) emphasise the need for transformation across the entire agricultural value chain.

It is important to note that the rapidly changing environment of digitisation, climate change and the global pandemic, requires incremental adaptation to policy design and implementation at national, regional and continental levels. In the same vein, Christiaensen and Martin (2018) posit that “the ongoing digital revolution, the world’s bifurcating demography and climate change continue to challenge our current metrics and methods, keeping the topic of agriculture, structural change and poverty reduction, a vibrant area of further investigation”.

Binswanger-Mkhize et al. (2010) reflected on the challenges facing African agriculture and put forward key areas for policy intervention: • Formulation and implementation of “sound” macroeconomic policies • Removal of taxation policies that “disadvantage African farmers relative to all other farmers in the world” • Improved service delivery for farmers • Investment in agricultural technology and its dissemination • Increasing the capacity and effectiveness of local governments, communities and farmer organisations to actively participate in agricultural development • Strengthening regional agricultural institutions These recommendations to support structural transformation remain relevant and critical to advance transformative industrialisation in agriculture, which reinforces the need for better, more integrated RVCs in this sector. Once again, the scholars emphasised the need for country agricultural action plans that complement regional initiatives. These national action plans need to complement existing frameworks such as the Comprehensive Africa Agriculture Development Programme, which provides “for agricultural transformation, wealth creation, food security and nutrition, economic growth and prosperity for all”. Additionally, structural transformation of agriculture must take place within a context of structural transformation of the entire economy to achieve sustainable results (Senbet & Simbanegavi, 2017).

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How will AfCFTA incentives contribute to turning around the huge food import bill of the continent?

Ms Jane Ezirigwe’s presentation outlined how Africa’s increased food demand and the changing consumption habits driven by population growth and urbanisation have led to rapidly rising net food imports, which are expected to grow from US$35 billion in 2015 to over US$110 billion by 2025. Policy considerations must take advantage of the availability of low-cost labour and abundance of natural resources and raw materials in Africa. The Food and Agriculture Organisation (FAO) estimates that the cumulative global investment required to stimulate sub-Saharan Africa’s agriculture and downstream support services, amounts to US$940 billion (from 2006 to 2050) and about US$500 billion for key commodity value chains in Africa. Only 10 African countries (Mauritius, South Africa, Seychelles, Morocco, Tunisia, Botswana, Algeria, Kenya, Egypt and Namibia) are ranked among the top 100 most competitive countries in world, as per the 2018 Global Competitiveness Index. How do we make the African country investment attractive?

The agricultural sector is one of the most affected by climate change since it causes losses of 25% of agricultural output in Africa.

She further mentioned that African farmlands and rangelands are increasingly degraded, causing farmers to face declining yields. In many cases, the impact has been so great that land can no longer support large herds of livestock.

She emphasised that the focus should be on building powerful linkages between the manufacturing and food industry activities and the rural world, ensuring that intra-African trade is beneficial to all, not just a few. Her contribution stressed the need for this sector to incorporate the needs of women and youth.

Her contribution emphasised government’s role in facilitating the creation of an enabling environment that provides agricultural inputs, agricultural financing, and promotes intra- and inter-sectorial value addition towards regional development.

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Mr Wandile Sihlobo echoed these points, adding that two non-trade issues need to be addressed. He highlighted the employment opportunities that lie in the agriculture sector.

There is also an urgent need to improve land governance on the continent. Rwanda is doing well regarding land administration through instituting long leases. However, in South Africa, the former homelands continue to face challenges in this regard. On the biological issues, Mr Sihlobo mentioned the need to appreciate the gains brought about by GMOs. This is because the current average yield is below two tonnes per hectare, while in South Africa and Brazil that have embraced GMOs, they produce four to five tonnes per hectare.

If Africa does this, it will close the trade deficit and retain resources previously allocated to food importation inside the continent.

Successful case studies of this include Ivory Coast and Egypt (with wheat) and Kenya (with tea). He emphasised that Africa has a much bigger market among its members and should take advantage of that.

For South Africa, the AfCFTA has come at an opportune moment because the country is export-oriented (to the tune of US$10.5 billion), and only 10% of that goes to the African continent, with 80% of African exports concentrated within the SADC region. As such, the continent can take advantage of the leverage that South Africa has. There is also a lot of rice farming potential in Nigeria, and yet for South Africa, this is where the country has the third biggest expenditure. This means Nigeria can prioritise exporting rice to South Africa. Mr Sihlobo stressed the need for production of commodities at competitive rates, from raw materials to agro-processing levels.

Agriculture – Food Processing Value Chains, Retail and Food Security • POLICY BRIEF

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The impact of the Covid-19 pandemic on agriculture in Africa: Disruptions and opportunities in the midst of present realities Prof Carlos Lopes indicated that Covid-19 disrupted 65% of Africa’s employment. There is no other disruption in recent memory which supersedes the ripple effect of this pandemic in 2020. In addition to this health and socioeconomic crisis, other natural disasters, such as the locust invasion in East Africa, exacerbated challenges to the agricultural sector.

There are tremendous opportunities for recovery beyond Covid-19. Earlier sections in this policy brief outlined the opportunities for growth and structural transformation, including employment creation. The importance of agriculture to food security, through the provision of competitively priced food to the urban sector, can help cap wage demands in the nascent manufacturing sectors on the continent. Food comprises a high proportion of urban workers’ and residents’ consumption basket. Agriculture also plays a critical role in alleviating balance of payments constraints.

The large productivity gap in the agriculture sector with product focus has the potential to double or triple the production of cereals grains and horticultural products. Mr Nimrod Zalk noted that this requires the adoption of high-yield varieties and increasing public inputs in this sector. Of note, he also observed the need for to adopt farm technology and rais fertiliser usage levels.

The industrialisation of freshness provides additional opportunities. This is the case in the horticultural sector, especially with the production of cut flowers. These sets of products are actually very high-value export commodities and require sophisticated industrial capabilities.

Countries such as Ethiopia, Kenya and South Africa are raising horticultural production and exports to capitalise on this. By so doing, these countries are in a process of structural change within manufacturing itself. Also, the manufacturing of agricultural products across the continent is a particular area that is well suited to increasing regional production and trade.

Dr Aniemeka emphasised the role of capacity-building and connecting policymakers to farmers through more robust engagement and consultation. He also mentioned several policies that can enhance the transition of African smallholder farmers into commercialised farmers.

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Agriculture – Food Processing Value Chains, Retail and Food Security • POLICY BRIEF

Agricultural Productivity – Experiences of different African countries Agricultural transformation in Africa has accelerated remarkably since the 1990s. For instance, agricultural productivity, cereal yield per capita and agricultural income have all gone up. Most countries doubled their average rates of transformation following the launch of the cadet flagship programme of the African Union for agricultural development that was established in 2003. Specifically, on average, Africans witnessed an increase in agricultural productivity measured by both value-added agricultural workers and by contributions to gains in productivity. However, the overall performance marks significant variation among countries, both in terms of the level of productivity and pace of progress.

Dr Samba Kawa referred to the Feed the Future Initiative, which was set up by President Obama’s administration in 2010 to “invest in food security and agricultural development activities in a select group of developing countries in an effort to reduce hunger, malnutrition, poverty and food insecurity” (Lawson et al, 2016). Of the 19 focus countries, 12 were African, including Ethiopia, Ghana, Kenya and Zambia. The FTF prioritised implementation through strategic partners in the selected focus countries, with emphasis on multi-sectoral engagement across government, civil society and the private sector to improve the livelihoods of smallholder farmers. Success of the programme has been attributed to this cross-sectoral approach, a commitment by focus countries to implement multi-year strategies and complementary activities that

promote the Comprehensive Africa Agriculture Development Program through Regional Economic Communities (RECs), which include Southern African Development Community (SADC), Economic Community of West African States (ECOWAS) and Common Market for Eastern and Southern Africa (COMESA) (Lawson et al, 2016). This model for transformative industrialisation in agriculture is one that policymakers should continue to support.

Mr Ziad Hamoui noted the challenges of doing business across West Africa. Amidst lengthy trade regulation steps between borders, which are costly, trade in the region is threatened by a lack of implementation of the regulations, security threats and smuggling.

Dispute resolution remains a concern in West Africa, and the AfCFTA addresses this challenge across Africa’s different RECs. Attention dispute resolution frameworks will ensure that regional regulations are implemented fairly and countries’ rights are observed and upheld, whilst other stakeholders are also protected. The AfCFTA provides for dispute resolution under part IV, article 20 of the greement, the Protocol on Rules and Procedures on the Settlement of Disputes (“Protocol on the Settlement of Disputes”). Although the agreement provides a framework for stateto-state disputes, it is vague when it comes to investor-state dispute settlements. This is a critical area, which needs to be addressed to boost investor confidence under the AfCFTA (Ewelukwa Ofodile, 2019).

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Conclusion and suggested policy recommendations for further engagement The above discussion has pointed out the challenges and opportunities to grow Africa, trade Africa, and move Africa. This section summarises the key recommendations, which focus on how to build robust linkages between the manufacturing and food-industry activities and the rural world, whilst ensuring that intra-African trade is beneficial to all, especially women and youth.

The above can be addressed by creating an enabling environment that emphasises government actions, regulations, laws and policies, including the following: • Market access and information: Governments should create agricultural market information systems and physical infrastructure to ensure application and oversight of sustainable power solutions and veterinary regulations and controls. There should not be a barrier to information, which coould lead to a decline in market efficiency. Standards should be disseminated, explained and understood by value chain stakeholders.

• Finance: Governments should implement the Maputo Declaration by investing 10% of GDP in agriculture. This will enhance the financing of smallholder farmers through contracting arrangements by agro-processors and traders.

• Agricultural inputs and value addition: Tax, cost recovery incentives ( for plants and equipment) and other investment incentives, including a robust dispute settlement mechanism, must be put in place. Governments should plan for climate change-related weather patterns and support the farming communities and agro-processors in cases of external shocks (ie droughts, flooding, bushfires and power failures). It is critical to improve storage and distribution infrastructure, regional road and rail transport linkages, and energy access. For example, transport costs in West Africa are three times higher than in other regions. Lack of energy access limits processing activities across all value chains. The high cost of alternative energy sources, diesel and renewable energy results in low levels of competitiveness. In both traditional and modern agricultural value

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chains, women often face less favourable employment conditions than men. Efforts should therefore be made to ensure gender equality throughout the value chain, as well as to prevent traditional patterns of gender discrimination from being repeated.

• Intra-regional trade facilitation: Enforcement of the rule of law in policies that protect contracting firms will be important for trade and regional integration. Governments should promote regulations that permit farmers to secure land and property rights.

Efforts should be made to limit customs procedures and corrupt practices as time delays are dangerous for the agricultural sector. It is important to harmonise procedures at a continental level by standardising the list of required documents. The use of ICT through online hubs with trade procedures, transportation and customs documentation is essential. The fight against illegal practices, such as road blockages or illegal fees at customs offices, should be strengthened.

Some of the policy issues to consider for the development of the African agricultural sector are as follows: i) Partnering with smallholder farmers to fasttrack the transition into mechanised farming.

Stakeholders such as the private sector, NGOs and the government should come together to enhance the transition with the supply of farm inputs, farmer education on technology adoption and its importance towards mitigating climate change risks. ii) On political commitment, policy inconsistency and policy somersault are of great concern in Africa. Africa also needs efficient customs that not only take care of revenue generation, but also allow easy passage of goods and services across borders. iii) Infrastructure in Africa is a major concern as no country on the continent has reached the minimum standard. There is a need for massive investment in technology to make agriculture prominent on the continent and it is now time for the private sector to get involved. iv) Foreign direct investment (FDI) and the possibility of having sustainable and effec-

Agriculture – Food Processing Value Chains, Retail and Food Security • POLICY BRIEF

tive government incentives to support investors are possible on the continent.

Governments should create fiscal incentives to encourage domestic investment and import substitution. Governments should also remove restrictions on some areas of investment and maximum equity ownership investment by foreign investors.

For example, when travelling overseas and entering Nigeria, Uganda, South Africa or any other regional destination, there should be an investment facility that has no restrictions on currency exchange controls. There should be free transfer of capital, profits, and dividends, and a constitutional guarantee against nationalisation and expropriation of investments. v) With regards to agricultural trade, governments should implement a zero-percent duty on agricultural machinery and equipment. This will encourage the use of appropriate farm inputs. Governments should implement policies that foster agricultural investment. Examples include duty waivers and other industry-related incentives based on use of local raw materials. vi) There is an urgent need for enhancing public-private partnerships, which are critical in dealing with supply chains. There should also be policies crafted to ensure the African continent embraces the notion of consuming what they produce and producing what they consume.

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References Binswanger-Mkhize, H.P., McCalla, A.F., & Patel, P. (2010). Structural transformation and African agriculture. Global Journal of Emerging Market Economies, 2(2), 113-152.

Christiaensen, L.C., & Martin, W. (2018). Agriculture, structural transformation and poverty reduction: Eight new insights.

World Development, 109, 413-416.

Ewelukwa Ofodile, U. (2019). Dispute settlement under the African Continental Free Trade Agreement: What do investors need to know? Kluwer Arbitration Blog.

Lawson et.al, (2016). “The Obama Administration’s Feed the Future Initiative” Congressional Research Service.

Lopes, C., & te Velde, W. (2021). Structural transformation, economic development and industrialization in post-Covid-19 Africa. Institute for New Economic Thinking (INET), 14 Jan 2021. Retrieved from https://www.ineteconomics.org/ perspectives/blog/structural-transformation-economic-development-and-industrialization-in-post-covid-19-africa Senbet, L.W., & Simbanegavi, W. (2017). Agriculture and structural transformation in Africa: An overview. Journal of African Economies, 26(1), i3-i10.

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