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    KRA to pay you 2million for reporting tax evaders

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    Cliffe Dekker Hofmeyr and Kieti Advocates LLP forge a new legal service offering in East Africa

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    Jubilee Insurance profits rise to 4 billion

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  • Markets
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    • All
    • Agribusiness
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    • Opinion
    KRA to pay you 2million for reporting tax evaders

    KRA collects KShs 21B from Alternative Disputes Resolution

    CBK okays liquidation of Chase Bank

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      OPINION: Why Safaricom’s Fuliza is a rip off!

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LETTERS: This is the agriculture that can feed Africa

by Kenyan Business Feed
May 15, 2019
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Columnists

LETTERS: This is the agriculture that can feed Africa

Wednesday, May 15, 2019 21:09


By JOSPHAT MACHAGUA |

African farmers
African farmers face many challenges to providing jobs and easing food shortage. FILE PHOTO | NMG 

The agricultural sector is the most critical for the African continent. It accounts for more than 70 percent of the continent’s employment and 75 percent of its domestic trade. The sector also plays a pivotal role in stemming food insecurity and generating income in Africa.

It is one of the leading foreign exchange earners accounting for 32 percent of the continent’s GDP. An expanding populace coupled with the adverse effects of climate change has made it an onerous task to feed the continent.

In most nations, more than 80 percent of the population lives on subsistence agriculture that has proved unsustainable over the years hence the need for a paradigm shift to revive and revitalise the industry.

Most of the farmers in Africa reside in rural areas. Lack of information results in farmers missing out on the latest and improved farming methods due to information asymmetry. They also miss out due to poor infrastructure and unavailability of agricultural extension workers.

Even in cases where access is guaranteed most cannot discern due to illiteracy; hence, adult literacy will come in handy to remedy the situation.

Finance is one of the significant challenges facing this sector. Less than 10 percent of the bank’s portfolios go to agriculture in Africa, hence no credit for expansion.

Banks also struggle to price the risk of these loans to small to medium-sized farmers and agribusinesses, stifling expansion in this sector. Entrenched cartel within the industry who conspire to exploit farmers coupled with the volatility of agricultural product prices in global markets has also accentuated the problem with most farmers earning a pittance.

Out of the 20 countries with the worst food and nutrition security, 19 are in Africa. There is a need to cushion the continent from food insecurity and malnutrition.

To accelerate Africa’s industrialisation, we need to boost the productivity of the sector to attain sustainable agribusiness and industrial development to create jobs and wealth and alleviate food insecurity.

African economies must continue to diversify investments in other sectors to overcome historical dependence on the extractive industries. Both the public and private sectors should invest in areas that can give jobs to our restless youth, and none is more vital than agriculture.

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There is an untapped margin of potential economic impact to be attained by investing heavily in this sector.

According to the African Union (AU) 2003 Maputo Declaration on agriculture and food security, every nation should allocate at least 10 percent of their national budget towards agriculture.

Climate-smart agriculture (CSA) encompasses farming that sustainably increases productivity, enhances, resilience (adaptation), and enhances the attainment of national food security and development goals.

Attaining sustainable agricultural development is a herculean task.

Two hundred and thirty-nine million Africans are chronically malnourished with half of the children under five years experiencing stunted growth due to malnutrition.

Africa’s population is expected to double by 2050; hence mitigation measures are needed to ease food insecurity and foster economic growth and development.

Agriculture in Sub-Saharan Africa is estimated to be 11 times more effective in reducing poverty than GDP growth in any other sectors, a vital multiplier for poverty eradication.

Value addition of agricultural products in Africa remains low; hence the need to modernise the sector.

Value addition depends entirely on the capacity of entrepreneurs to come up with high-quality products that will supply the African and global market. Accordingly, the agribusiness value chains need to adapt to the ever dynamic global market and strive to satiate the consumer’s requirements.

Investment in infrastructure to facilitate access to markets is also vital in reducing operational costs for agribusiness. Access to clean water, renewable energy, inputs such as fertilisers and high-quality seeds especially and in arid areas is vital to boosting productivity.

In addition to innovations, systems are required to boost efficiency, productivity, quality and reduce the cost of production.

Josphat Machagua, Economist.

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