Partnerships key in growing agribusiness in Africa: The world’s focus is shifting to Africa.
By 2030, the continent’s population is set to double and 50% of this expanding population will be living in cities. Six of the world’s fastest-growing economies are on this continent. Developed nations are increasing investment into Africa. It is evident that Africa is emerging as a powerful economic force. And that is why we have prioritised partnerships with African countries.
In 2014, South Africa’s exports of agricultural products were worth R104 billion. Over the past 13 years, the country’s exports to Africa have grown by 14%, compared to the EU which saw an 8% increase.
Here in the Western Cape, we boosted exports to Africa by 34% between 2011 and 2013. Our key trading partners include Mozambique, Angola, Kenya, Nigeria and Zambia. In a recent address, Kofi Annan pointed to the fact that Africa is importing USD34 billion worth of food. We can produce the majority of this food ourselves. We know that Africa has the most arable land and we need to make sure that Africans lead the way forward.
To do so, we must identify opportunities for mutual exchanges on our continent. Our growth strategy for the next five years, Project Khulisa, outlines our detailed action plans to partner with African countries in strategic sectors, namely tourism, oil and gas and agri-processing. Earlier this year, the Premier and I conducted an official trade promotion visit to Angola.
Angola is a key trading partner for the Western Cape. The value of the Western Cape’s exports to Angola was valued at over R2 billion in 2013. This visit paved the way for increased partnerships between Angolan and South African businesses.
One of focus sectors, agri-processing, holds particular potential for this region. Under a high-growth scenario, it is estimated that this sector can add up to a further 100 000 jobs to the Western Cape economy.
South African retailers which have a presence in Angola have to source local produce in that country. We’re looking at ways we can work with Angola’s agricultural sector to develop partnerships around production. There are some types of produce which will thrive in the Angolan climate and we will be exploring partnership agreements between agri-businesses in the two regions.
Africa’s continued progress and prosperity depends on this kind of collaboration. Our continued progress also depends on working together to tackle our challenges and developing shared solutions.
Recent research conducted by the University of Copenhagen in partnership with the University of Stellenbosch has explored the barriers to intra-African agricultural trade. Project Khulisa has also identified trade and non-trade barriers as challenges to growing the size of our agri-processing sector.
Among the findings was that the reduction of non-tariff barriers and the improvement of land transport would have a significant impact on increasing internal trade in Africa. Specific weaknesses cited included costs linked to transit time delays at customs, terminals and land transportation.
The research found that if we reduce the costs of these delays by only 20%, the welfare gains would be double than those from removing all tariffs. It is also important to note that Africa is a diverse and dynamic continent.
We cannot rely on generic partnership strategies for every country. Considering this, the Western Cape Department of Agriculture has conducted a comprehensive analysis on the macroeconomic environment in Africa.
Researchers from the department’s Macro and Resource Economic Services unit have developed a Market Attractiveness Index to assess the opportunities in each African country to aid in our approach. We will draw on these findings as we deepen our relationships with countries on the continent.
Through commitment and a shared vision, we can build a vibrant and integrated African agricultural sector.
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E-mail: bronwynne.jooste@westerncape.gov.za
