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COMMENT: David Willers

The private sector is best placed to protect Africa’s environment Harnessing market forces is the most robust way to spread Fairtrade certification across different industries and regions.

by Milton Lindsay and Jeremy Kuper For almost a decade, Africa’s economic rise has been fuelled by the emergence of Eastern demand for the continent’s raw materials. Economic activity has brought a much needed revenue influx to Sub-Saharan Africa, but the patterns of investment – centred largely on mineral extraction – have done little to strengthen the region’s infrastructure and end the continent’s dependency on the export of minerals. However, there are indications, some believe, that the structure of Sub-Saharan Africa’s economy is on the verge of a transformation, with the agricultural sector helping to end this over-reliance on mineral extraction. “Because most of Africa’s [mining] potential is known, and tightly regulated, I think agriculture presents a huge opportunity,” said David Willers, Vice Chairman of the Business Council for Africa. “Africa could definitely become the breadbasket of the world, potentially.” Agriculture has always maintained a significant position in Africa’s economic framework, but the growth of the sector – consisting mainly of the harvesting of commodities like coffee or cotton – has been limited by a number of factors.

Volatile commodity pricing Not only is the value of these products heavily dependent on the extremely volatile world market; the lack of progress is also

compounded by the fact that historically Africa’s commodities have not benefited the majority of the continent’s population and the Pan-African export market is under-developed. In other words, African governments make little or no profit from the commodity beyond its primary harvest. “So often, you have the basic commodity roughly processed and exported to a company overseas, who would do the final beneficiation and convert it into something,” Willers explains. This is because African countries neither had the means to process the resources domestically nor an existing market through which to profit from regional trade. Sugar, used to produce ethanol, is an example of a commodity that can be used to promote an economic model that is more beneficial to African countries, according to Mr Willers.

The sustainability challenge Yet, like any commodity, expanding sugar production inevitably increases the ecological footprint that a country leaves. The challenge, says Mr Willers, is in developing a sustainable way for African countries to harvest sugar and produce ethanol. “How can one ensure that the natural degradation caused by an active [ethanol] operation isn’t going to spoil the African

landscape and atmosphere?” Willers enquires. “We definitely do not want, in Africa, to have Beijing-style pollution issues.” In Africa, however, where most governments lack the resources to enforce strict environmental standards, Mr Willers says that any push for the development of a sustainable sugar industry will have to be market-driven. One of the best examples of a marketdriven effort to set environmental standards for commodity production is the Biofuels Policy and legislation created by the European Union. Throughout the past decade, the EU has developed a series of strict standards for the biofuels that it imports. These standards, which include provisions ranging from how much CO2 an ethanol operation can produce to the amount of land a plantation uses, have had a substantial impact on ethanol production across the globe. EU member states are not permitted to import ethanol from operations that fail to meet strict EU standards. To gain access to this lucrative market, producers are forced to meet those standards.

The Bonsucro standard A key organisation leading the effort to help sugarcane plantations meet the EU’s standards is Bonsucro, a global

“Africa can definitely become the breadbasket of the world, potentially.” - David Willers, Vice Chairman of the Business Council for Africa

Gateway to Africa February 2013 is a multi-platform title for businesses looking to take part in expansion opportunities in Sub-Saharan Africa.