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Monday
Jun152015

Dynamic Growth in African ICT is Unlocking Secrets of SME Treasure Trove

 

A newly released survey of 14 African countries in 2006 has documented the impact of Information and Communication Technology (ICT) on private sector development and how it is contributing to developing a vibrant Small Medium Enterprise (SME) sector in Africa. It discovered how dynamic the SME sector is, how it has rapidly adopted mobile phone technology (96 percent have it), and how if used properly in concert with this new technology, extraordinary economic growth is possible.

The survey – Towards An African e-Index: SME e-Access and Usage in 14 African Countries – covered only businesses employing fewer than 50 people and took in the vast informal sector in the countries. It investigated if they had access to ICTs, how they are using them and if it was making them more productive. SMEs were especially interesting because they do not waste money (most people are just trying to survive) and they only use what is really useful to them to increase income. In the informal sector this has become the mobile phone.

The countries surveyed included Botswana, Cameroon, Ethiopia, Ghana, Kenya, Mozambique, Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda, Zambia and Zimbabwe. With most of the continent’s poor working in the SME sector, little was actually known about the impact of ICT and its link to profitability and labour productivity. And surveying only formal businesses would be telling half the story since about two-thirds of non-resource driven GDP generation is derived from SMEs, and a large share of that from informal ones.

“This is a sector that has no access to formal finance,” said Dr. Christopher Stork, a senior researcher at the Witwatersrand University in South Africa. “The mobile phones present an opportunity to tap into this market and offer finance, banking services, cash transfers – we see this already in Kenya – without the risks of other services. These informal businesses can build up a history, learn how to better control their businesses, and receive loans. Where the financial system is dysfunctional or overpriced, airtime credits can be the new cash form.”

Africa has a high proportion of entrepreneurs because people have next to no social supports to fall back on and need to do business to survive. Most fall into the informal sector where they can avoid paying tax, pay low wages, and keep overheads down. According to Stork, if governments are serious about dealing with poverty, then the best approach is to acknowledge this sector, and rather than crush it, draw it in to become more sophisticated and efficient. He sees the mobile phones as key to this strategy.

“Innovative technology can help these entrepreneurs to acquire the tools they need to do business better. There is a lack of skills in all areas, a lack of accounting skills, a lack of basic financial management. This is where ICT can overcome this. SMEs can get a monthly statement with all their business transactions, making it easier to manage things. This would be a great way to distribute micro-finance. Savings clubs could store cash on the phones.”

The e-Index also noted the trend for mobile phone providers to consolidate and offer common regional services. This could fuel an explosion in cross-border trade as it becomes cheaper and easier to communicate via mobile phone for business. The e-Index also found the ever-growing importance of internet cafes remains. They continue to evolve into multi-purpose business centres offering a wide range of services, from post to word processing. At present they still remain the main means of accessing the internet. And with broadband still minimal and very expensive, it falls on mobile phones to offer internet access, though this will remain mainly in the continent’s capitals.

The survey’s sponsor, Research ICT Africa! (RIA!) network, seeks to build an African knowledge base in support of ICT policy and regulatory design. The network emerged out of a growing need for hard data and analysis to help the continent join the information age. Throughout 2007 it is conducting household surveys on e-access and e-usage and will present the findings in 2008.

By David South, Development Challenges, South-South Solutions

Published: February 2007

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

Follow @SouthSouth1

Google Books: https://books.google.co.uk/books?id=7H6VBgAAQBAJ&dq=development+challenges+february+2007&source=gbs_navlinks_s

Slideshare: http://www.slideshare.net/DavidSouth1/development-challengessouthsouthsolutionsfebruary2007issue

Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

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This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

Monday
Jun152015

African Tourism Leads the World and Brings New Opportunities

Tourism around the world is growing rapidly again after the setbacks caused by the September 11, 2001 terrorist attacks. Tourism is also finally acknowledging Africa – home to 888 million people (2005, UN) – and where 46 percent of sub-Saharan Africa’s people live on less than US$1 a day. Led by Kenya and South Africa, the continent has come out on top in world tourism growth according to the United Nations World Tourism Organisation (UNWTO) (http://www.unwto.org/). While global tourism is forecast to grow by four percent in 2007, Africa as a whole enjoyed growth of 10.6 percent in 2006.

Tourism, because it is a labour intensive industry, is seen as a great way to both reduce poverty and meet all the Millennium Development Goals. It favours small scale businesses, it is decentralized and can diversify regional economies, it is relatively non-polluting and can contribute to the conservation and promotion of natural and cultural heritage, and most importantly it can act as a catalyst for kick-starting other sectors of the economy.

Tourism is now generally recognized to be one of the largest industries-if not the largest-in the world. It has grown rapidly and almost continuously over the past 20 years, and is now one of the world’s most significant sources of employment and of Gross Domestic Product (GDP). Tourism particularly benefits the economies of developing countries, where most of the sector’s new tourism jobs and businesses are being created. This rapid growth has encouraged many developing nations to view tourism as key to promoting economic growth, and global development assistance agencies see it as having real potential to help achieve many of their own development goals.

Tourism provides opportunities for diversifying local economies and promoting formation of micro and small enterprises, many of them women-owned. These enterprises promote better lives for poor entrepreneurs, especially in rural areas where there may be few other livelihood options. Tourism is generally labor-intensive and it tends to employ relatively higher proportions of women and young people than most other sectors. Tourism introduces technology and basic infrastructure, and strengthens linkages with the outside world. Well-planned and -implemented tourism projects can improve local governance, natural resources management, biodiversity conservation and other important development goals.

Within Africa, sub-Saharan Africa led the way with 12.6 percent growth. The countries benefiting the most included Kenya, South Africa, Mozambique, Swaziland and the Seychelles. Kenya received almost a million tourists in 2006, and earned US $857 million in revenue.

Kenya’s success rests on the fact it set aside 10 percent of the country for wildlife and biodiversity conservation. The majority of its tourists come to see the ‘big five’ – elephant, rhino, lion, buffalo, and leopard. Tourism currently employs 11 percent of the country’s workforce.

In October 2004 the World Tourism Organization released the Washington Declaration on Tourism as a Sustainable Development Strategy. Governments, international aid agencies, and the world’s leading universities agreed to make sustainable tourism development a top priority in their strategies to reduce poverty and meet other MDGs.

Aid agencies like USAID have targeted women for micro-funding for tourism projects. They have been able to help women start businesses making crafts in Tanzania and Botswana. The UK’s DfID helped Toni Shina from the Cape Town-based The Backpack to become a fair trade business. “Fair Trade Tourism South Africa recognises our commitment to uplifting our staff and community, and our utilisation of local service providers,” she said. “As a business we also have a strong and positive attitude to working with and supporting staff who are affected by HIV and Aids and we abide strongly with required labour and legal standards.”

And the fair trade concept is getting greater recognition. In a recent survey of the local tourism industry in South Africa, half recognised the Fair Trade in Tourism South Africa brand.

On the other hand, the scale of missed opportunities is illuminated in Rwanda. A consultant on a tourism management plan for the Volcano National Park, Edwin Sabuhoro, is urging communities living nearby to embrace eco-tourism and cash in on the tourists visiting nearby gorillas.

“According to our research,” he told Kigali’s The New Times, “some tourists say they carry their money back to their countries because they can’t find what to spend on.” And he pointed out the fate of the gorillas were directly linked to the poverty of the community: poachers would not be stopped if the community remained poor and had no other source of income.

How popular Africa has become is exemplified by Ethiopia’s rise into the top ten travel destinations for 2007, according to travel guide specialist Frommer’s. According to the guide, “Ethiopia has finally emerged out of the shadows caused by years of political strife, economic hardship and famine. The improved infrastructure has made travelling in Ethiopia increasingly popular, especially among independent-minded travellers and those seeking adventure.”

Another country, Tanzania, is targeting tourism as a key growth area. The country is trumpeting its peaceful and stable status and low-crime to attract tourists.

By David South, Development Challenges, South-South Solutions

Published: February 2007

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

Follow @SouthSouth1

Google Books: https://books.google.co.uk/books?id=7H6VBgAAQBAJ&dq=development+challenges+february+2007&source=gbs_navlinks_s

Slideshare: http://www.slideshare.net/DavidSouth1/development-challengessouthsouthsolutionsfebruary2007issue

Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

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This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

Monday
Jun152015

Ring Tones and Mobile Phone Downloads are Generating Income for Local Musicians in Africa

 

 

African musicians hoping to support themselves through their recordings have always had to contend with the added burden of poor copyright control over their work. While musicians in the West are supported by a highly regulated regime of copyright protection – ensuring some to become the richest people in their respective countries – most African musicians have had to stand back and watch their work being copied, sold and exchanged with little chance of seeing any royalties. Global audiences know of the success of artists like Fela Kuti, Youssou N’Dour, Manu Dibango and Miriam Makeba, but most African musicians can look forward to scant earnings from recording their music.

Anyone who has walked through the markets of Africa will know there are plenty of pirated CDs for sale, yet it is of no use to a musician who never sees the money. Poverty is endemic amongst African musicians as a result of this loss of income. While music is a global business worth US $40 billion according to the Recording Industry Association of America, pirated music in Africa is rampant – some estimates by the Recording Industry of South Africa put it at over 80 percent of available music. How much money is being lost can be judged from the estimated daily income of a pirate music vendor in Africa, ranging between Euro 762 and Euro 2,744.

But a solution to this problem is being pioneered in Botswana in southern Africa. A partnership between mobile phone provider Orange Botswana and Small House Records/Mud Hut Studios, ensures musicians get a slice of the profit pie. Managing director Solomon Monyame of Small House Records has signed a contract with Orange to share the profits from ring tone and song downloads to mobile phone subscribers. With more than 76.8 million people currently subscribing to mobile phone services in Africa, and the number growing by about 58 percent each year for the last five years, the potential royalties market for African musicians is vast if this initiative is replicated across the continent.

In the paper “Development Goes Wireless” to be published in the spring 2007 issue of the journal of the Institute of Economic Affairs, lead researcher Karol Boudreaux of George Mason University’s Mercatus Center and Enterprise Africa!, discovered mobile phones and mobile phone companies can give artists a new way to control royalties for their work. She found that in the absence of effective copyright control mechanisms – as is the case in many African countries – the mobile phone company can step in to save the day.

“When you walk through the markets there you see so much music available on the street, but there is little intellectual property rights protection,” she said.

“In other countries, like the UK, you have strong intellectual property rights protection, but this just isn’t the case in much of Africa. The mobile phones are a very good way to get around this problem as long as cell phone providers are willing to make the contracts. Botswana is very lucky in that they have a very good contract environment, but this isn’t necessarily the case in other countries. It is a win-win for music providers and mobile companies.”

The NetTel@Africa project started by USAID and the Center to Bridge the Digital Divide, in partnership with many African and US universities, is also championing copyright protection strategies.

How important creative industries are becoming to economic development is slowly being recognized. It is now seen as an important component of modern post-industrial, knowledge-based economies, but equally also a way for economically underdeveloped countries to generate wealth. Not only are they thought to account for higher than average growth and job creation, they are also vehicles of cultural identity and play an important role in fostering cultural diversity. Initiatives like UNESCO’s Global Alliance for Cultural Diversity attempt to document this phenomenon and back it up with hard numbers.

UNESCO also has a project to establish musicians’ cooperatives across Africa. As such, the musicians are able to pool their production resources, which are individually insufficient to ensure the economic viability of a small or medium-sized business. In Burkina Faso, a co-operative is working with the International Labour Organisation. Click here for more information.

Festivals like Mali’s annual Festival in the Desert in the oasis of Essakane, 65 kilometers from Timbuktu, is an example of how African musicians are finding their own way to reach audiences. Targeted above all to promote African and Malian Music inside the continent, the Festival has also boosted international tourism to the region and almost 10 percent of last year’s 6,000 visitors came from outside of Africa.

Another initiative for African musicians is the DigiArts Africa network. It was founded by UNESCO and aims to increase communication between artists, industries and educators, make musicians self-sustainable, use the ICT industries to support and contribute to cultural activities, and better promote African musicians within and outside Africa. Click here for more information.

Well-known Senegalese musician Thione Seck is blunt about the economic effect of piracy on his income.

“Were there no piracy, I could have bought an island, seeing the number of songs that I composed in more than 30 years of my career”, he told a local newspaper.

According to Abdoul Aziz Dieng, president of the Senegal Music Works Association (AMS) and Chairman of the Board of the Senegalese Copyright Office (BSDA) (www.mali-music.com), out of 10 Senegalese artists’ CDs available on the local market, “only two are legal”. For audio cassettes, the ratio is three pirate copies out of every five sold.

Opportunities to combat piracy and generate income are also not limited to just musicians. Filmmakers in Africa are starting to learn how to exploit the opportunities thrown up by the fast-expanding mobile phone networks on the continent. Already a phenomenon in South Africa (www.filmmaker.co.za), director Aryan Kaganof is in the process of releasing SMS Sugar Man, a feature length movie shot entirely with mobile devices. The movie will be beamed to cell phones in three-minute clips over 30 days.

What are the effects of Piracy?

  • Artist

    • No royalty payments, no money to live

  • Record companies

    • No return on investments. Staff retrenchments

  • Retailers

    • Cannot compete with low prices. Staff retrenchments

  • Consumers

    • Many copies are of inferior quality. If tracks are missing or the sound quality is poor, no exchange or refunds

    • May be contributing to “organized crime” syndicates which are heavily involved in international music piracy

Source: Recording Industry of South Africa

By David South, Development Challenges, South-South Solutions

Published:  January 2007

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

Follow @SouthSouth1

Google Books: https://books.google.co.uk/books?id=MH2VBgAAQBAJ&dq=development+challenges+january+2007&source=gbs_navlinks_s

Slideshare: http://www.slideshare.net/DavidSouth1/development-challengessouthsouthsolutionsjanuary2007issue

Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

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This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

 

Monday
Jun152015

Carbon Credits Can Benefit African Farmers Thanks to New System

The global carbon credit trading schemes emanating from the Kyoto Protocol are now creating a multi-billion dollar market – the European carbon market was worth €14.6 billion in 2006 – and represents one of the fastest growing business opportunities in the world. Being green has finally come of age. Yet all the benefits of this are largely bypassing Africa despite more than 70 percent of the continent’s inhabitants earning a living off the land.

The World Agroforestry Centre – whose mission is to advance the science and practice of agroforestry to transform the lives and landscapes of the rural poor in developing countries – in partnership with Michigan State University has developed a method using satellite imagery and infrared sensing that measures carbon storage in African farmland. They have completed a pilot programme in western Kenya and are ready to encourage poor farmers to plant trees as soon as the European Union allows carbon credits under the Kyoto Protocol to be awarded for this kind of scheme. Further pilot projects will be rolled out in 2007 in partnership with CARE International and the WWF.

But European Union policies on carbon credits are holding back this significant opportunity to enhance African livelihoods. Europe’s Emissions Trading Scheme (ETS) is at present not willing to recognize the new method of verifying carbon storage in farmland. The ETS is the largest multi-country, multi-sector greenhouse gas emission trading scheme in the world. The issue of carbon storage, or carbon “sinks” as they are known, is very controversial in the world of Kyoto agreement implementation. Non-government organizations that advocate for forests and indigenous people have worked hard to exclude the use of forestry credits to offset fossil fuel burning, arguing that forestry offsets to date have been for big monoculture plantations of fast-growing eucalyptus or pine trees. It is claimed they are net carbon emitters over their lifetimes and also cause additional environmental and social problems.

But the World Agroforestry Centre’s approach is very different from a monoculture plantation. Their scheme is to help rural Africans to integrate more trees into their agricultural production systems, with benefits besides storing carbon. They argue that the right kinds of trees can increase the productivity and resilience of the land. Trees provide food, fuel, fertilizer, and medicine – medicinal trees are the main source of medication for 80 percent of Africa’s population.

Louis Verchon, the lead scientist for climate change at the World Agroforestry Centre, believes that if the EU would put in place a new scheme to credit farmers who capture carbon in their land, “millions of dollars in carbon credits could begin flowing to the world’s rural poor.” At present, Verchon says two-thirds of the carbon credit business is being captured by Asian countries who are mostly offering industrial solutions. “Africa has something to offer on this – it can’t compete with the likes of South Korea on industrial solutions, but it has plenty of land.”

In order to make the scheme work, two things will need to be improved: Africa’s institutional weakness and the paucity of qualified carbon credit verifiers. A network of verifiers would be required to inspect farm sites and make the calculations required to allocate carbon credits to poor farmers. At present, there are no qualified African-born verifiers in Africa according to Verchon.

The WAC are working with WWF and CARE to build up NGO capacity and start demonstration projects to prove it can work – two pilot projects are already up and running in Kenya. They are also automating much of the process by building a web portal.

Verchon says the WAC “are in it for the long-haul and we will see this grow over the next ten years.”

By David South, Development Challenges, South-South Solutions

Published:  January 2007

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

Follow @SouthSouth1

Google Books: https://books.google.co.uk/books?id=MH2VBgAAQBAJ&dq=development+challenges+january+2007&source=gbs_navlinks_s

Slideshare: http://www.slideshare.net/DavidSouth1/development-challengessouthsouthsolutionsjanuary2007issue

Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

Creative Commons License
This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

Wednesday
Apr222015

US $1 Trillion Opportunity for Africa’s Agribusinesses Says Report

 

As the world’s population continues to grow – surpassing 9 billion people by 2050, the United Nations estimates – and more and more people move to urban areas, producing enough food to feed this population will be one of the biggest economic challenges and opportunities in the global South.

Africa, a continent undergoing significant economic change, has yet to fully realize its potential as a producer of agricultural products to feed itself and the world. Africa currently has a labour-intensive but very inefficient agriculture system. While many Africans either make their living in agriculture or engage in subsistence farming for survival, much of the continent’s farming is inefficient and fails to make the most of the continent’s rich resources and potential.

A new World Bank report, Growing Africa: Unlocking the Potential of Agribusiness (http://siteresources.worldbank.org/INTAFRICA/Resources/africa-agribusiness-report-2013.pdf), argues that Africa could have a trillion-dollar agriculture market by 2030.

What will need to change to make this happen? African farms will need greater access to capital, as well as more investment in infrastructure and better irrigation. All of these elements will need to dramatically improve if Africa is going to compete effectively in global markets.

The report urges greater cooperation between governments and agribusinesses, farmers and consumers and for all parties to recognize that the continent is being rapidly urbanized, changing the way food is grown, sourced and distributed.

It says Africa’s farmers and agribusinesses require more capital, steady supplies of electricity, better technology and irrigated land. All these resources then need to be applied to the growing of high-value, nutritious foods.

At present, agriculture, farmers and agribusinesses make up almost 50 per cent of Africa’s economic activity, and the continent’s food system is worth an estimated US $313 billion a year (World Bank). But the report believes this could triple if governments and business leaders adopted radically different policies.

“The time has come for making African agriculture and agribusiness a catalyst for ending poverty,” said Makhtar Diop, the World Bank Vice President for Africa. “We cannot overstate the importance of agriculture to Africa’s determination to maintain and boost its high growth rates, create more jobs, significantly reduce poverty, and grow enough cheap, nutritious food to feed its families, export its surplus crops, while safeguarding the continent’s environment.”

The report addresses the problems African agriculture is currently experiencing: slow yield growth for major food crops, slowing research spending, degraded land, water scarcity, and climate change. It looks at solutions to allow Africa to tackle these problems and seize the opportunity to significantly increase its food and agricultural exports.  Africa can more than meet its own needs and meet the world’s needs too, the report argues.

But what can be done? At present, 50 per cent of the world’s uncultivated land suitable for growing food resides in Africa. This works out to 450 million hectares of land that is neither forested, protected nor densely populated – all could be available for growing food.

The report also found Africa is using just 2 per cent of its renewable water resources while the rest of the world averages 5 per cent. African harvests currently do not yield anything close to what is possible. Another weakness is waste from post-harvest losses, averaging 15 to 20 per cent for cereals, and even more for perishable foods, because of poor storage and farm infrastructure.

Areas the report recommends farmers and agribusinesses should focus on include fast-growing markets for rice, maize, soybeans, sugar, palm oil, biofuel and feedstock. In sub-Saharan Africa, the focus should be on rice, feed grains, poultry, dairy, vegetable oils, horticulture and processed foods for the domestic market. And there are also good examples to follow by studying the ways Latin America and Southeast Asia used world markets to boost income and profits.

Agribusiness enterprises looking to purchase more land to expand the number of hectares under cultivation are urged to act ethically and not to threaten existing people’s livelihoods or violate local users’ rights. This includes consulting with locals and paying fair market price for land bought.

Rice is one crop that needs attention. Significant quantities of rice are imported and consumed in Africa. Half the rice eaten is imported, costing around US $3.5 billion a year (World Bank). Big importers include Ghana and Senegal – both countries singled out in the report for needing to improve their domestic rice production and quality.

Another food staple needing attention is maize (corn). A daily food staple for many Africans, it takes up 14 per cent of crop lands on the continent. While most Zambians get half their calories from maize, Zambia is currently unable to export maize at a cost comparable to market leader Thailand – Zambian maize costs one-third more. Zambia was singled out as needing to raise yields, reduce costs, and remove disincentives for the private sector in markets and trade.

“Improving Africa’s agriculture and agribusiness sectors means higher incomes and more jobs. It also allows Africa to compete globally. Today, Brazil, Indonesia and Thailand each export more food products than all of sub-Saharan Africa combined.  This must change,” said Jamal Saghir, the World Bank’s Director for Sustainable Development in the Africa Region.

How to make the most of this opportunity?

One innovative idea coming out of Africa comes from the mega-brewer SABMiller (sabmiller.com). As a sign of confidence in the continent’s growing economies, the brewer has pledged to slash its beer prices and use more African-grown grains – a boost to local farmers – and to start a campaign of opening new breweries for the next three years. Countries targeted include Ghana, Nigeria, Mozambique and Zambia.

“African farmers and businesses must be empowered through good policies, increased public and private investments and strong public-private partnerships,” according to Gaiv Tata, World Bank director for Financial and Private Sector Development in Africa.  “A strong agribusiness sector is vital for Africa’s economic future.”

By David South, Development Challenges, South-South Solutions

Published: May 2013

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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Google Books: https://books.google.co.uk/books?id=RfdcAwAAQBAJ&dq=development+challenges+may+2013&source=gbs_navlinks_s

Slideshare: http://www.slideshare.net/DavidSouth1/development-challenges-may-2013-issue

Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

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