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A recent analysis on African agribusiness competitiveness by Dr. Suresh Babu has indicated that, strategic investments can help unlock potential for agribusiness growth in African nations with low agribusiness competitiveness, food security and agricultural productivity.
The report of the study captured, “African countries have a very high potential to transform their agricultural sector by increasing the competitiveness of their agribusiness.”
“Competitiveness in agribusiness has a feedback effect that helps in sustaining food security and increasing agricultural productivity.”
High competitiveness can bring cost-effective goods to consumers while opening new pathways for value chain addition for farmers.
“Agribusiness competitiveness hasn’t received adequate attention so far because countries have been struggling to improve agricultural productivity.
But if you take your product outside Africa, you achieve both geographic and business competitiveness,” Babu added.
However, government has reiterated that, it is committed to making agriculture more profitable.
Vice President Dr Mahamudu Bawumia has said the 2018 Budget and Economic Policy Statement would focus on implementing an Agricultural Marshall Plan that would complement and enhance the Planting for Food and Jobs initiative.
He said the Marshall Plan would ramp up the investments made in the “Planting for Food and Jobs” programme and make agriculture more profitable.
“Agriculture will be a major source of well paid jobs, which will lift the majority of the people from poverty and create wealth for all,” he said.
Vice President Bawumia said this at the opening of an International Conference on the Political Economy of Economic Transformation, in Accra.
He said the Marshall Plan would transform the structure of the Ghanaian economy through aggressive industrialisation under the programmes: Industrialisation Stimulus Programme and Value Addition to Agricultural Produce under the District Industrialisation Programme.
Under the Plan, he said, the Government would abolish duties on agricultural products, processing equipment and machinery.
It would also support agribusiness start-ups, finance farming and agribusinesses, open up food basket in the northern parts of the country and Afram Plains, provide technical assistance and tax incentives, irrigation infrastructure and launch pension scheme for cocoa farmers.
In October this year, Vice President Bawumia said, Government would launch the National Digital Addressing System, which would use the Global Positioning System (GPS) technology, to track the location of every citizen in the country.
“We have to get it done if we want to transform the economy and also ensure the interoperability of the payment system for financial inclusion” he added.
To enhance agribusiness competitiveness, countries should identify successful models of public-private partnerships (PPP) and business to business (B2B) alliances to raise value chain competitiveness and scale, in addition to encouraging entrepreneurship, access to capital and building stronger market linkages.
Rwanda and Kenya rank “high” on the agribusiness competitiveness and agricultural productivity scales, but “low” on food security, highlighting how policies in these countries have failed to utilize gains from trade to deliver food security to their populations.
“Despite tremendous progress improving food security in Rwanda and Kenya, both countries need stronger policy interventions to improve the allocation of resources and improve general welfare,” said Babu.
Seven countries – Guinea, Niger, Bukrina Faso, Burundi, DRC, Nigeria, Togo — rank “low” on food security and agribusiness competitiveness, while South Africa ranks “high” on both parameters.
Countries such as Botswana, Tunisia, Ghana, Uganda and Algeria, which rank “medium” on food security and agribusiness competitiveness, hold immense potential to improve their competitiveness.
“These countries can transform agriculture sector by increasing mechanization and commercialization, and can strategically decide on the composition of crops to improve food security and competitiveness,” said Babu.
On the agribusiness competitiveness and agricultural productivity scale, 11 countries—Seychelles, Zimbabwe, Sao Tome and Principe, Liberia, Guinea, Burundi, Algeria, Chad, Djibouti, Mauritania and DRC—ranked “low”.
“Increases in agricultural productivity must come from intensification rather than exploitation of additional natural resources,” said Babu. “We can draw lessons from China, which created scores of research and design institutes and universities focusing on agricultural innovation,” he added.
The report also recommends policy lessons for countries for enhancing agribusiness competitiveness.
A competitive agribusiness sector is one characterized by efficient land markets, efficient management of agriculture risks, technology adoption and innovation, sustainable management of natural resources, efficient institutions, effective infrastructure, conducive economic environment, investment in health and education and wide market access.
This analysis was developed using WEF’s Global Competitiveness Index, the Ballasa index for agricultural competitiveness, Doing Business Indicator and Global Food Security Index (Economist Group).
Source: Adnan Adams Mohammed