W3 Agriculture Summary Report by Building Bridges

THE AfCFTA AND TRANSFORMATIVE INDUSTRIALISATION WEBINAR SERIES

AGRICULTURE – FOOD PROCESSING VALUE CHAINS, RETAIL AND FOOD SECURITY SUMMARY REPORT 2021, Cape Town

Linkoping House 27 Burg Road Rondebosch 7700 Cape Town T +27 (0) 21 650 1420 F +27 (0) 21 650 5709 E mandelaschool@uct.ac.za www.mandelaschool.uct.ac.za

Design: Mandy Darling, Magenta Media

Contents

Introductory Note................................................................................................................................. 2

Speaker Bios ......................................................................................................................................... 3

Moderator............................................................................................................................................... 3

A. Context ................................................................................................................................................... 6 B.

Summary of presentations.................................................................................................................. 8

Introductory Remarks.......................................................................................................................... 8

Welcome address.................................................................................................................................. 8

Keynote address.................................................................................................................................... 9

Attracting investment.......................................................................................................................... 9

The role of climate change................................................................................................................. 9

Policy recommendations................................................................................................................... 10

Trends in West Africa......................................................................................................................... 10

Non-trade issues................................................................................................................................... 11

Conclusions........................................................................................................................................... 11

Discussion on Impact of Covid-19: Disruptions and opportunities of the pandemic for agriculture in Africa.......................................................................................12

Policy recommendations....................................................................................................................13

Discussion on Agricultural Productivity: African experiences and policy instruments required to successfully transform this sector...............................................................................15

The role of technology and partnerships........................................................................................15

Border concerns.................................................................................................................................. 16

Investment, partnerships and advocacy........................................................................................ 16

Concluding Remarks...........................................................................................................................18

Introductory Note AfCFTA and Transformative Industrialisation Dear Reader, 2020 proved to be a challenging year for people across the world. Of note, the impact of the Covid-19 pandemic on families, communities and nations reminded us of the need to strengthen democratic governance and pursue development sustainably. The African Continental Free Trade Agreement (AfCFTA) presented a unique opportunity to explore the challenges and opportunities for better integration of regional value chains in the pharmaceutical, agricultural and textile industries. Successful delivery of our four-part webinar series was made possible through partnership with the Centre for Competition, Regulation and Economic Development (CCRED) at the University of Johannesburg, the Centre for Comparative Law in Africa (CCLA) and the Policy Research in International Services and Marketing (PRISM) at the University of Cape Town, Trade and Industrial Policy Strategies at the University of Pretoria, the Toyota Wessels Institute of Manufacturing Studies (TWIMS) in Durban, the Nigerian Institute of Advanced Legal Studies and the Africa International Trade & Commerce Research in Nigeria. We are especially grateful to our distinguished speakers who shared their experience and recommendations, thereby contributing to

vibrant discussions during our webinar series. We had the opportunity to relay these recommendations to the Secretary General of the AfCFTA Secretariat, H.E. Wamkele Mene, in December 2020. This summary report, on Agriculture - Food processing Value Chains, Retail and Food Security, reiterates the importance of the agricultural sector for Africa’s industrialisation and overall inclusive economic development. We would like to thank Mr Babatunde Abiola and Dr Clever Chikwanda, members of our research team on the AfCFTA and Transformative Industrialisation Project, who compiled this summary report. This work forms the foundation in our efforts to build a network of experts working on issues related to transformative and sustainable industrialisation through the Industrialisation and Development Forum. In 2021, we will continue this series to explore digitisation and opportunities for green industrialisation. We hope you enjoy reading this report and look forward to your comments. If you would like to receive more information about this ongoing project, please contact Ms Mabel Nederlof-Sithole, who is leading our Building Bridges Programme (mabel.sithole@uct.ac.za). Click here to view webinar videos. Warm regards, Faizel Ismail

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Speaker Bios

Speakers

Moderator

Ms Jane Ezirigwe (Research Fellow, the Nigerian Institute of Advanced Legal Studies)

Prof Carlos Lopes (Professor, The Nelson Mandela School of Public Governance) Carlos Lopes is a professor in the Mandela School of Public Governance at the University of Cape Town, a visiting professor at Sciences Po, Paris, and an associate fellow in the Africa Program of Chatham House. He has occupied several leadership positions across the UN system, including policy director for Secretary-General Kofi Annan and executive secretary of the UN Economic Commission for Africa. He has authored or edited more than 20 books and feature articles in Project Syndicate, CNN, Le Monde, Financial Times, China Daily, The Guardian, New African and Jeune Afrique, amongst others. His latest books are “Africa in transformation. Economic Development in the age of doubt” (Palgrave McMillan, 2019) and “Structural Change in Africa. New narratives, misperceptions and development in the 21st century” co-authored with George Kararach (Routledge, 2020). He is a member of the African Union reform team led by President of Rwanda Paul Kagame and doubles as the organisation High Representative for Partnerships with Europe as well as a member of the Global Commission for Economy and Climate, African Academy of Sciences, and Lisbon Academy of Sciences, and holds seats in many boards including the African Leadership Institute, Waterloo University and Geneva Graduate Institute.

Jane Ezirigwe is a Research Fellow at the Nigerian Institute of Advanced Legal Studies with research interests focused on food and agricultural law, human rights, and law and development. She is also an adjunct lecturer at Bingham University, Karu, Nigeria, where she teaches international trade law at the undergraduate level. Ms Ezirigwe has 28 publications in these areas in reputable peer-reviewed journals and has presented her research works in several local and international conferences. She had her legal and professional development training from University of Abuja, Nigerian Law School, Harvard Law School, University of London, and ESUT Business School and is concluding her doctoral studies at the Faculty of Law of University of Cape Town. She has worked in private legal practice, corporate practice and, presently, in academia and research. Ms Ezirigwe is the co-coordinator of the NIALS training course on trade and regional integration law and practice. She was a national committee member of the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Federal Ministry of Trade & Investment for the National Trade Summit for Skilled and Vocational Artisans in 2018. She was also a member of the House of Representatives’ Technical Committee on Environmental Law and Policy in 2017. She is an International Bar Association Scholar, a Moseneke Grant Scholar, an Alexandre Burman Memorial Grant scholar, an Olu Akinkugbe Fellow on Business Law in Africa, and a Fellow of Young African Leaders Initiative. She has received several academic and research awards for her contributions to the development of law.

Mr Wandile Sihlobo (Chief Economist, Agricultural Business Chamber of South Africa) Wandile Sihlobo, an agricultural economist by training, is chief economist of the Agricultural Business Chamber of South Africa (Agbiz). Sihlobo was appointed as a member of President Cyril Ramaphosa’s Presidential Economic Advisory Council in 2019 after serving on the Presidential Expert Advisory Panel on Land Reform and Agriculture between 2018 and 2019. Sihlobo is also a member of the Council of Statistics of South Africa (Stats SA). He is a commissioner at the International Trade Commission of South Africa (ITAC). Sihlobo is a columnist for Business Day and Farmers Weekly magazine. He is a member of the Agricultural Economics Association of South Africa (AEASA). Sihlobo is an author of “Finding Common Ground: Land, Equity and Agriculture” published by Pan Macmillan in March 2020. He is also a contributor to the book “Recession, Recovery and Reform” published by Jacana in August 2020. Sihlobo holds a Master of Science degree in Agricultural Economics from Stellenbosch University. Mr Nimrod Zalk (Industrial Development Policy and Strategy Advisor, South African Department of Trade and Industry)

related to South African and African industrial development including: • Development and implementation of South Africa’s National Industrial Policy Framework (NIPF) and Industrial Policy Action Plans (IPAP) • Design and implementation of key industrial policy initiatives including various sector strategies, industrial financing instruments and leveraging procurement for industrial development • Development of the dti’s sector strategy methodology • The South African Renewables Initiative (SARi) • Measures to deal with monopolistic behaviour in the South African economy • Joseph Stiglitz’s Initiative for Policy Dialogue (IPD): Africa Task Force • Ethiopian industrial development and policy • The NEPAD process He has authored papers on a range of topics including: industrial development and policy, competition and competitiveness and regional economic development. He has delivered lectures on industrial development and policy at the following institutions: University of the Witwatersrand, University of Johannesburg, University of Stellenbosch and University of the Western Cape. Dr Osita Aniemeka (Chairman, Board of Trustees – Africa International Trade)

Nimrod Zalk is Industrial Development Policy and Strategy Advisor at the South African Department of Trade and Industry (dti). Prior to this he was Deputy Director-General of the Industrial Development Division of the dti. He also sits on the board of the South African Industrial Development Corporation.

As Founder and President, sub-Saharan Open University (SSOU), Dr Osita Aniemeka leads the African institution to bring disruptive learning in entrepreneurship, agropreneurship, innovations, and exponential technologies for business incubation and acceleration. SSOU emphases technological and scientific contents for the transformation of the African continent.

Nimrod holds an MSc in economics (with reference to Africa) from the University of London’s School of Oriental and African Studies (SOAS). He has been involved in a range of processes

In 2010, Dr Aniemeka became fulltime faculty at Ibrahim Badamasi Babangida University, Lapai, Niger State and in 2011 was appointed

Agriculture – Food Processing Value Chains, Retail and Food Security • SUMMARY REPORT

director of the Center for Learning Communities, where his work involved global education and the establishment of the university’s entrepreneurship education program. With a PhD in Communication and Entrepreneurial Leadership, Osita worked for the United States Agency for International Development (USAID) Project–NEXTT, growing the potentials for agriculture and agribusiness on the LagosKano-Jibiya (LAKAJI) Corridor Agropreneurs. He is consultant to DFID-ENABLE2 and worked with UNDP | FMARD Capacity Development Trajectory of the Nigerian Agricultural Transformation Agenda (ATA). He was country director for the Nigeria Development Gateway Collaborative (World Bank-Development Gateway Foundation) and customer service agent for the legendary American Express Card in Huntsville, AL. Dr Aniemeka was senior research fellow at the Foundation for African Arts and Letters (FAAL) in New York before returning to Nigeria to join the faculty and senate of IBB University. As a member of the Global Steering Committee of the NGO Working Group on the World Bank, he represented the Africa Region on the Global Steering Committee and was named Man of the Year in 2002. A skilled facilitator and capacity development specialist with expertise in entrepreneurial leadership, innovation and change management, Dr Aniemeka gained extensive experience in SME development strategy, performance management, media, non-profit governance, donor relations, public-private dialogue/partnership and knowledge assets management working in the United States and in Nigeria. Dr Samba Kawa (Team Lead, Feed The Future Program, USAID) Dr Samba Kawa is coordinator and team lead of the Feed the Future (FTF) Program in the Economic Growth and Environment Office at USAID/Nigeria. Kawa joined USAID in 2011 and has worked in USAID’s Bureau for Resilience and Food Security in

Washington, D.C., and in USAID/Liberia. He has served as country support officer for USAID missions in Ghana, Madagascar, Malawi, Mozambique, Zambia, and Zimbabwe. Kawa joined USAID/Nigeria in July 2019. Before coming to USAID, Kawa was a New York City (NYC) Teaching Fellow and middle school science teacher in NYC, where he also worked for a non-profit organisation in Manhattan. Kawa was also Variety Maintenance Officer in a GIZ-funded Seed Multiplication Project in Sierra Leone. Kawa holds a PhD and MS degree in soil science from North Carolina State University in Raleigh and in education from Mercy College, NYC. Mr Ziad Hamoui (Founding Member and Past President, Borderless Alliance in West Africa) Ziad Hamoui is the founding member and past president of the Borderless Alliance in West Africa, a regional, private sector-led, multi-stakeholder advocacy group that promotes economic integration in West Africa and tackles barriers to trade and transport in the region. He is currently the national president of its local chapter in Ghana. Mr Hamoui has 17 years of private sector senior management experience in Ghana, as Executive Director of Transport and Operations at Tarzan Enterprise Ltd., a post that he continues to hold since 2002. Mr Hamoui is a chartered fellow of the Chartered Institute of Logistics and Transport (CILT)Ghana and an active member of its governing council, a co-founder of a recently-launched grass-root trade advocacy campaign in Ghana (“Trade Facilitation Coalition for Ghana”), and a member of several advisory committees in the areas of trade policy, trade facilitation, security and agribusiness.

A. Context The African Continental Free Trade Area (AfCFTA) presents an opportunity not only for boosting regional trade but also meeting the continent’s transformative industrialisation imperative. Currently, with an intra-regional trade of about 17%, the continent lags behind Europe (69%), Asia (59%), and North America (31%). While the reasons for the low intra-regional trade are many and complex, a primary factor underpinning the abysmal performance – despite a long history of efforts to foster regional integration – is the lack of productive capacity on the continent. In light of this shortcoming, the AfCFTA affords an opportunity to rethink Africa’s approach to regional integration by moving away from a linear-based approach that focusses solely on the removal of trade barriers, toward a development-based approach that aims to build productive capacity through economic diversification, structural transformation and technological development. Specific policy tools often identified to foster ‘developmental regionalism’ in Africa include the development of regional value chains (RVCs) that exploit existing comparative advantages and complementary features within the region, such as differentiated labour cost, productive capabilities, natural resource endowment and geopolitical advantages. Indeed, in the context of the AfCFTA, RVCs hold special appeal as a model for Africa’s industrial development for several reasons. The development of RVCs constitutes a viable strategy for mitigating negative distributional impacts that Africa’s smaller and more vulnerable economies are likely to suffer under AfCFTA trade liberalisation. Lessons from the European Union, where negative distributional effects have led to scepticism and suspicion among some members, are very instructive in this regard. Additionally, given that individual African countries lack competitiveness in global trade, the prospects of national economic transformation efforts can be enhanced if they are supported and complemented by regional strategies. RVCs in the context of the AfCFTA will enable African countries to combine forces, organise the regional division of labour, boost their productivity and strengthen their position to climb a specific global value chain as a regional

block. An example of effective coordination in this regard is the integration of the ASEAN countries into the electronics global value chain through the development of RVCs. Finally, RVCs are uniquely well suited for industrial development in sectors where idiosyncratic factors determine consumption behaviours and market opportunities. On the African continent, distinctive regional tastes, cultural preferences and climatic conditions demand building local companies around RVCs in sectors that barely attract the interest of extra-regional companies. The pharmaceutical industry is a typical example of how distinctive health problems, including both tropical diseases such as malaria, and environmental health challenges such as humidity and sun exposure, get the attention of only a few pharmaceutical companies outside the continent. The food industry also offers a good example given unique regional tastes and dietary habits. It is in light of the above that the Nelson Mandela School of Public Governance at the University of Cape Town identified three high-potential sectors for RVCs in the context of the AfCFTA: i) pharmaceuticals and healthcare; ii) cotton, textiles and clothing; and iii) agriculture and food processing. Subsequently, the School partnered with the Centre for Competition, Regulation and Economic Development (CCRED) at the University of Johannesburg; the Centre for Comparative Law in Africa (CCLA) and the Policy Research in International Services and Marketing (PRISM) at the University of Cape Town; Trade and Industrial Policy Strategies at the University of Pretoria; the Toyota Wessels Institute of Manufacturing Studies (TWIMS) in Durban; and the Nigerian Institute of Advanced

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Legal Studies and the Africa International Trade & Commerce Research in Nigeria to launch a webinar series on the theme: “The AfCFTA and Transformative Industrialisation”. The webinar series provides a platform to address the question of how the AfCFTA can advance transformative industrialisation in Africa, with each webinar focussing on a different sector. Insights from the webinars informed policy briefs that will be shared with relevant stakeholders, including the AfCFTA Secretariat. The third webinar of the series held on 11 November 2020 discussed “Agriculture-Food Processing Value Chains and Food Security”. The objective was to identify the opportunities for enhancing value within the African agro-processing and food industry by exploring the following questions: i) What are the opportunities to build local production and regional value chains for the agriculture and agro-processing sectors in Africa? ii) What are the regulatory, infrastructure and investment challenges that need to be addressed to facilitate local and regional production? iii) What can we learn from Africa’s past experiences in this sector? iv) How can the AfCFTA be calibrated to advance the building of regional value chains and transformative industrialisation?

The Nelson Mandela School of Public Governance has identified three priority sectors that were perceived to have the potential for Regional Value Chains (RVCs) in the context of the AfCFTA. They include: 1. Pharmaceuticals and Healthcare

2. Cotton, textiles and clothing

3. Agriculture and food processing

v) What are the key regulatory issues and standards that the AfCFTA needs to resolve to facilitate regional integration and how can these efforts be fast-tracked? This report presents a summary of the main ideas and key insights from the webinar.

B. Summary of presentations The webinar comprised three sections, featuring an introduction and welcome address, a keynote address, and two three distinct group discussions. The keynote address discussed the contextual issues and opportunities in the sector. The first discussion examined the impact of Covid-19 on food security, how African governments responded to the challenge and what changed in terms of policy priorities. The second discussion highlighted case studies and examples that highlighted the challenges of and opportunities for agricultural transformation in Africa since 1990. These examples provided best practices and lessons learned from specific value chains based on such underlining indicators as agricultural productivity, cereal yield and per capita agricultural income. Most African countries doubled their average rates of transformation following the launch of the Comprehensive Africa Agriculture

Development Programme (CAADP) in 2003. For example, between the period from

1990 to 2012, Africa as a whole witnessed an increase in agricultural productivity, measured in terms of agricultural value-added per agricultural worker, of around 67%. However, this overall performance is marked significant variation among countries, both in terms of the level of productivity and pace of progress. Some of the webinar guests had experience with the factors that have influenced performance across the value chains, making the following question paramount: What lessons can we learn, and what should we unlearn, from the failures to date?

Introductory Remarks

Ms Penny Parenzee, the Chair of the webinar, opened the webinar by welcoming all the attendees. She informed them that the Nelson Mandela School of Public Governance had launched this webinar series in partnership with key organisations, including most prominently: the Policy Research in International Services and Manufacturing (PRISM), the Centre for Competition, Regulation and Economic Development (CCRED, University of Johannesburg), Trade and Industrial Policy Strategies

(TIPS, University of Pretoria), the Centre for Comparative Law in Africa (CCLA, University of Cape Town), Africa International Trade and Commerce Research (AITC), the Nigerian Institute of Advanced Legal Studies (NIALS) and the Toyota Wessels Institute for Manufacturing Studies (TWIMS).

Welcome address.

Professor Faizel Ismail provided additional background on the webinar series. Prof Ismail mentioned that the School had hosted a successful webinar on Covid-19 and its impact on Africa on 25 May 2020, which discussed the question, “How can the AfCFTA stimulate an inclusive and developmental post-Covid-19 economic revival?” Several high-profile speakers attended the webinar, including the Secretary General of the AfCFTA Secretariat, Mr Wamkele Mene; the Advisor to the President of Nigeria on Economic Matters, Dr Adeyemi Dipeolu; the former director of the Division on Africa and Least Developed Countries, UNCTAD, Dr Taffere Tesfachew; and South Africa’s former Minister of the Department of Trade and Industry (DTI), Dr Rob Davies. Various stakeholders, including a large number of postgraduate students from across the continent, also participated. He further mentioned that the Covid-19 pandemic and its complex impact on socio-economic conditions has been the main focus of African leaders in 2020 and the momentum on the negotiations of the AfCFTA had thus been reduced. The implementation of the AfCFTA had been postponed to early 2021. As such, this May webinar identified several RVCs that were perceived to have the greatest potential in the context of Covid-19. These include the three priority sectors of pharmaceuticals, textiles and agriculture. Prof Ismail introduced Professor Carlos Lopes from the Nelson Mandela School of Public Governance as moderator the webinar and introduced Ms Jane Ezirigwe as the first speaker.

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Keynote address

Ms Jane Ezirigwe, Research Fellow at the Nigerian Institute of Advanced Legal Studies, opened the discussion by providing an overview of the landscape of opportunities in the agricultural sector. Africans have an opportunity, now more than at any previous time, to change their lives through increased agricultural productivity and enhanced agribusiness that connects smallholders to national, regional and global value chains. Food security has been given rightful prominence in the debate but cannot be a replacement for real transformation. It is important to renew the building blocks that are necessary for a deeper discussion of the connection between agriculture and industrialisation. Issues of access to energy, infrastructure such as irrigation, transportation and financing of inputs, such as enhanced seeds and fertilisers, are all contributing to a poor ecosystem.

Attracting investment Ms Ezirigwe mentioned that Africa has increased food demand and the changing consumption habits driven by population

growth and urbanisation have led to rapidly rising net food imports, which are expected to grow from US$35 billion in 2015 to over US$110 billion by 2025. She also mentioned that the availability of low-cost labour and an abundance of natural resources and raw materials positioned Africa strategically in this regard. On the challenges, she said the Food and Agriculture Organisation (FAO) estimates that the cumulative global investments required for agriculture and downstream support services in sub-Saharan Africa amount to US$940 billion (from 2006 to 2050) and about US$500 billion for key commodity value chains in Africa. Only 10 African countries (Mauritius, South Africa, Seychelles, Morocco, Tunisia, Botswana, Algeria, Kenya, Egypt and Namibia) are ranked among the top 100 most competitive countries in the world, as per the 2018 Global Competitiveness Index. She then asked, “How do we make the African continent investment attractive?”

The role of climate change The agricultural sector is one of the most affected by climate change, since it causes

losses of 25% of agricultural output in Africa. Ms Ezirigwe mentioned that African farmlands and rangelands are increasingly degraded, leading to declining yields for farmers. In many cases, the impact has been so great that land can no longer support large herds of livestock. She suggested that the focus should be on how we can build “powerful linkages between the manufacturing and food industry activities and the rural world, how to ensure that intra-African trade is beneficial to all, not just a few, and how we can incorporate the needs of women and youths”.

Policy recommendations Ms Ezirigwe mentioned that the above can be addressed by creating an enabling environment that emphasises government actions and regulations. These laws and policies include the following: • Standards and SPS issues – Physical infrastructure is required to ensure application and oversight of sustainable power solutions (SPS) and veterinary regulations and controls, but not the superfluous standardisation and quality norms and constraints imposed by developed export markets. Standards should be disseminated, explained and understood by chain stakeholders. • Market access and information – Governments should create agricultural market information systems.Governments should implement the Maputo Declaration by investing 10% of GDP in agriculture. • Governments should enforce the rule of law in policies that protect contracting firms. Governments should provide tax, cost-recovery (plants and equipment), and other investment incentives. • Governments should create policies to facilitate the finance of smallholder farmers through contracting arrangements by agro-processors and traders. • Governments should conduct contingency planning for increasingly common climatic extremes and support the farming communities and agro-processors in cases of external shocks (droughts, flooding, bushfires and power failures). • Governments should promote good agricultural practices.

• Governments should promote regulations that permit farmers to secure land and property rights. • Efforts should be made to limit customs procedures and corrupt practices as time delays are dangerous for the agricultural sector. It is important to harmonise procedures at a continental level by standardising the nature of the required documents, for instance, or promoting the use of ICT in this area with online hubs about trade procedures, transportation and customs documentation. The fight against illegal practices, such as road blockages or illegal fees at customs offices, could be strengthened. • In both traditional and modern agricultural value chains, women often face less favourable employment conditions than men. Efforts should therefore be made to ensure gender equality throughout the chain as well as prevent traditional patterns of gender discrimination from being repeated. • Efforts should be made to improve storage and distribution infrastructure, regional road and rail transport linkages, and energy access. For example, transport costs in West Africa are three times higher than in other regions. Lack of energy access limits processing activities across all value chains. The high cost of alternative energy sources, diesel and renewable energy results in low levels of competitiveness.

Trends in West Africa On the experience of West Africa, Ms Ezirigwe said: • The McKinsey Institute estimates that by 2025, household consumption should grow by 22% in Nigeria and 77% in Francophone countries of Central and West Africa, reaching about US$450 billion. • Rice and cassava will be a key priority for West Africa. Examples of future target value chains include sorghum, millet, wheat, sugar and potatoes. • The representation of the potato value chain in West Africa provides an example, e.g. processing into chips, potato flours, food preparations and other edible products. Inputs: seeds and fertilisers, cultivation, harvesting and post-harvest handling,

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commercialisation, processing into food products, storage, consumption. • There is an opportunity for forage farming in West Africa. Given the worsening effects of climate change and conflict between farmers and herders, investment opportunities exist in Nigeria’s livestock sector with the NLTP 2019. Success stories of similar private sector investments in Ethiopia and Namibia abound. • On market integration, the region has attained a Customs Union with fourteen member states implementing the ECOWAS common external tariff, which took effect from January 2016. • In consolidation of the ECOWAS Common Market, the region adopted a Common Investment Policy and code in December 2018, which is complemented by the ECOWAS Double Taxation Agreement, and aligns the region into a single investment policy space.

Non-trade issues The next speaker, Mr Wandile Sihlobo, Chief Economist, Agricultural Business Chamber of South Africa, built on the submissions made by Ms Ezirigwe and indicated that non-trade issues need to be addressed. He alluded to an array of employment opportunities that lie in the agriculture sector. He further mentioned that 23% of Africa’s economy comes from this sector. Thus, he called on Africa to address such important issues as infrastructure development (i.e., roads, ports, electricity), including mechanical and biological aspects.

Africa and Brazil, production is much higher at four to five tonnes per hectare. Mr Sihlobo said if Africa generally follows this path, it will close the trade deficit. This is because there is so much money leaving the continent. He additionally mentioned that some of the countries that have done well are Ivory Coast and Egypt (on wheat) and Kenya (on tea). He emphasised that Africa has a much bigger market among its members and should capitalise on this. For South Africa, he mentioned that the AfCFTA has come at an opportune moment because the country is export-oriented (to the tune of US$10.5 billion) and only 10% of that remains on the African continent. Of this, 80% is concentrated within the SADC region. As such, the continent can take advantage of the leverage that South Africa possesses. There is also a lot of rice in Nigeria and yet for South Africa, this is where the country has the third biggest expenditure. This means Nigeria can prioritise rice exports to South Africa. These changes can be implemented in the medium-long term.

Conclusions In conclusion, Mr Sihlobo mentioned that this is an exciting platform for Africa. He therefore encouraged Africans to be more innovative in order to produce commodities at competitive rates, from raw materials to agro-processing levels. Africa also needs to embrace technology on both the digital and biological sides.

Mr Sihlobo also touched on the need to improve land governance on the continent. He gave an example of Rwanda, which is doing well regarding land administration through instituting long-term leases. Rural parts of India are equally doing well in this regard. However, in South Africa, the former homelands continue to face challenges regarding land tenure. On the biological aspects, Mr Sihlobo reiterated the need to appreciate the gains obtained from genetically modified organisms (GMO). This is because in most of those countries that have not embraced them, the current average yield is below two tonnes per hectare while in countries that have embraced GMOs such as South

4. Discussion on Impact of Covid-19: Disruptions and opportunities of the pandemic for agriculture in Africa Disruptions to agriculture can cause enormous socio-economic burden. In 2020 this was made clear by the combination of protectionist measures in sourcing markets, the serious disturbance of world supply chains following the pandemic, the dramatic fall of commodity prices and environmental stress provoked by extreme weather. The response to the pandemic in Africa has been significantly better than anticipated, but has still fallen far short of meeting the needs of most Africans. Prof Lopes indicated that 65% of Africa’s employment was disrupted by Covid-19. There is no other disruption at this scale in recent memory. Additionally, the locust outbreak

which ravaged the horn of Africa and other parts of the continent in 2020 exacerbated the shocks to the agricultural sector. Mr Nimrod Zalk, Industrial Development Policy and Strategy Advisor, South African Department of Trade and Industry, mentioned that South Africa’s food and beverages sector had been resilient in the face of Covid-19 but it would be of interest to know if this was the trend across the continent. He said there are tremendous opportunities for renaissance and recovery beyond Covid-19. He referenced the recently published book African Economic Development by Christopher Cramer, John Sender and Arkebe Oqubay. He reiterated three

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essential reasons why agriculture is important for the continent. The first is productivity, growth and structural transformation, in line with employment creation. The second reiterates the importance of agriculture to food security through the provision of competitively priced food. This is especially important to the urban population as it can help curb wage demands in the nascent manufacturing sector given that food is such a high proportion of the consumption basket amongst urban dwellers and workers. The third reason is that agriculture plays a critical role in alleviating the balance of payments constraints by increasing agricultural exports to create more opportunities. He lamented the large productivity gap, especially in the production of cereal grains as well as horticultural products. He suggested that closing this gap requires adoption of high-yield varieties and increasing the number of public inputs into the sector. He also suggested the adoption of farm support technology, which echoed earlier speakers’ inputs. Mr Sihlobo emphasised the need to support investment in irrigation infrastructure, including raising the levels of fertiliser usage. Secondly, he said there is a script for industrialisation within agriculture, which the authors call the “industrialisation of freshness”. This is the case for the horticultural sector, especially flower production. These are high-value products that require sophisticated essential industrial capabilities. He cited countries, including Ethiopia, Kenya and South Africa, that have increased horticultural production and export. By doing so, these countries are in the process of structural change within manufacturing. Also, manufacturing of agricultural products across the continent is uniquely positioned to promote regional production and trade. He also addressed the tariff barriers between countries. Dr Osita Aniemeka, Chairman, Board of Trustees – Africa International Trade emphasised the importance of agriculture, noting that this sector has often been neglected. He stressed the need for capacity-building, referring to agricultural policymakers in Africa who fail to adequately engage farmers. He also mentioned several policies that can help smallholder farmers transition to commercial farming.

Dr Aniemeka stressed the impact of the Covid-19 pandemic on smallholder farmers. For example, peasant farmers who grow crops to feed their households, often with very inadequate farm inputs and limited storage facilities, have lost valuable harvests. This reality has pushed them into a pool of poverty, which is characteristic of a huge population of Africans whose livelihoods depend on this sector.

Policy recommendations Dr Aniemeka proposed the following policy recommendations: • Partnerships should be made with smallholder farmers to fast-track the transition into mechanised farming. Stakeholders including the private sector, the NGO community and government should come together to enhance the transition with supply of farm input and farmer education on technology adoption and its importance towards mitigating climate change risks. To support this, he cited Ms Ezirigwe’s submission regarding climate effects on soil degradation, which gives rise to the need for farm inputs that improve soil quality and overall crop yields. • With regards to political will, Dr Aniemeka cited policy inconsistency and “policy somersault” as a great concern in Africa. He pointed to the case of Nigeria’s US$5.6 billion investment promises to agriculture, where it took the next elected president six to seven months to select the cabinet member responsible for this. In the process, promises that would change the infrastructural deficit of the sector were lost due to policy inconsistency. • He also described the state of agricultural infrastructure in Africa as a cause for concern, arguing that no country on the continent has reached the minimum standard of what should constitute good infrastructure. • Technological innovation is required to make agriculture prominent on the continent and the private sector is an important stakeholder in this process. • Another sphere of opportunity is foreign direct investment (FDI) alongside sustainable and effective government incentives to support investment. He mentioned that governments should create fiscal incentives to encourage domestic investment and

import substitution. Governments should also remove restrictions on some areas of investment and maximum equity ownership investment by foreign investors. For example, when one gets into Nigeria, Uganda or South Africa from Europe or America, there should be an investment facility which has no restrictions on currency exchange controls. There should be free transfer of capital, profits and dividends, and constitutional guarantees against nationalisation and expropriation of investments. • On agricultural trade, he mentioned that governments should implement a zero percent duty on agricultural machinery and equipment. This will encourage the use of appropriate farm inputs. On tax holidays, he strongly advised governments to apply policies that encourage agricultural investment. Examples include duty waivers and other industry related incentives based on local raw materials and export orientation.

Agriculture – Food Processing Value Chains, Retail and Food Security • SUMMARY REPORT

5. Discussion on Agricultural Productivity: African experiences and policy instruments required to successfully transform this sector The final discussion explored the requirements for deepening participants’ understanding of the transformative aspects of the agriculture sector. Prof Lopes began by summarising the challenge and opportunity for African agriculture. Evidence suggests that countries that have increased productivity across the globe benefitted from economic growth sustained by agricultural transformation. Africa possesses the largest unused reserves of arable land, which are threatened by enormous post-harvest loss and low productivity.

The role of technology and partnerships Prof Lopes mentioned that block chain technology can serve as a useful tool for poverty alleviation and can be effective in this sector. He also mentioned that although most people are familiar with the QR Codes, they are used casually, but nowadays this can apply to traceability in food processing value chains. He expressed the need for platforms that fight counterfeiting and different types of certification that increase product value. Therefore, the agricultural sector stands to benefit from digitalisation dividends. Dr Samba Kawa, Feed The Future (FTF) Team Lead, USAID, referred to the Sustainable Development Goals with particular emphasis on Goal 2, which aims to end hunger, achieve food security and improve nutrition. He reported that many countries are not meeting Canada’s requirement for countries to devote 10% of their GDP to agriculture. This has meant

that countries are even less food secure when confronted by global pandemics and other natural disasters. Additionally, urbanisation and population growth impact economies across Africa. Dr Kawa also mentioned that agriculture is a major employer in most developing countries. He described the “Feed the Future Initiative”, which was developed by President Barack Obama and took off in 2011. This initiative currently targets 14 countries, including Liberia and Nigeria. The strategy relies on building partnerships between government, civil society and the private sector to improve the lives and livelihoods of smallholder farmers. They use a number of indicators to measure successes or failures. Some of the indicators for success include the number of people that have adopted the use of improved technology in their activities. This could be modern machinery, digital or otherwise. Another indicator of success points to product expansion by using improved inputs or partnering with the private sector. Success also includes investing in the smallholder farmers’ capacity through educational programmes and training. They expect individuals who benefit in this way to return to their countries and continue with this kind of work. Many farmers gain knowledge and skills related to food security policies and other areas that are important for advancing food security and nutrition.

Border concerns Mr Ziad Hamoui, Founding Member and Past President, Borderless Alliance in West Africa’s input was structured around three cases. His first illustration described an incident in May 2019 where two drivers loaded their trucks with floor tiles and set off from Takoradi, in the western part of Ghana. They crossed from Ghana into Burkina Faso and intended to pass into Mali. Before reaching a town called Query, which is 20 kilometres from the Burkina Faso-Mali border, they pulled over at one of the many checkpoints. While they were negotiating a reduction in the illicit checkpoint fee from 2000 to 1000 cephas, the equivalent of a few US dollars, assailants emerged and shot everyone before running away. The incident resulted in the death of the two drivers, police, customs officials and some public servants. This incident demonstrates how trade in West Africa is costly and dangerous, owing to the delays, the lengthy policy procedures and lack regulatory enforcement. In addition, smuggling, security issues and terrorism create a fertile “breeding ground” for the proliferation of non-tariff measures and non-tariff barriers. The repeal of non-tariff barriers from these corridors through partnerships between various stakeholders is crucial. This will help to unleash the potential for agriculture and economic development. Mr Hamoui told a second story about the closure of the Benin-Nigerian border in August 2019 and, later, the closure of all Nigerian borders on the pretext of smuggling. He said that there are several cases like this between Nigeria and other countries. The grey areas related to smuggling demand a closer review of the Rules of Origin of goods that come into West Africa. The case started as a trade issue and degenerated into a security concern. It then started shifting between security and trade issues as Nigeria continues to maintain closed borders. Covid-19 lockdowns in West Africa and the rest of Africa have led to further negative consequences resulting in food scarcity in some countries, Nigeria included. Mr Hamoui emphasised the need for effective dispute resolution mechanisms. As a region, West Africa stands to benefit from imple-

mentation of the AfCFTA since it includes strong dispute resolution mechanisms, which are currently missing across other Regional Economic Communities (REC). This will provide a mechanism to implement regional regulations which defend the law, the rights of member states and the rights of the other stakeholders within this system, and to do it in a fair and comprehensive way.

Investment, partnerships and advocacy Mr Hamoui’s last story referred to Ghanaian Ibrahim Hassan, who travelled to Japan on a mission to acquire skills in aquaculture with one of the universities. He intended to replicate the learnings in Ghana. When he returned to Ghana, he managed to negotiate the acquisition of land, obtain seed funding and start the project. The experiment was positive with high product quality. Today, Mr Hassan manages over 2 000 acres of upstream farms with high quality export value products. He is pleased with the results but needs more investment, more stakeholders and more people to improve his yield and to increase market linkages in order to export effectively. His case demonstrates that there is an opportunity for African investments, and for opening African markets. The magic lies in ensuring that there is a match between businesspeople with ideas, investments and an enabling business environment. This applies to agriculture in general and the rest of the sub-sector. He suggested the way forward by presenting two action points. The first is the development of agriculture on the continent in an age of scarcity, where he proposed the implementation of external shocks partnerships. This speaks to building more resilient food and agricultural value chains and processes across Africa. A good example of this is the alliance of value chains, similar to what the Global Share Alliance is doing with an old value chain approach. Another area of partnership is similar to what the Alliance for a Green Revolution (AGRA) is doing with the Regional Food Trade Coalition, which is a data-driven support system for African agriculture. By bringing together multiple stakeholders, there is the possibility of leveraging these networks of stakeholders who traditionally are not used to working with each other – whether they are groups of develop-

Agriculture – Food Processing Value Chains, Retail and Food Security • SUMMARY REPORT

ment agencies, RECs, or even members of the private sector. As such, part of the advocacy required to rally support for pushing agriculture forward must take place with private sector representatives in order to bring them all to a common understanding and priority before moving on to engage the public sector and other decision makers. Another opportunity to leverage partnerships would be the AfCFTA working directly with other stakeholders in order to: Grow Africa (growing the manufacturing and the production aspects on the continent); Trade Africa (making these businesses by finding market linkages and financing them, including linking buyers and sellers, and making sure that they move from one point to the other); and Move Africa (moving the goods across borders and removing the barriers for the movement of these goods and services).

6. Concluding Remarks In conclusion, Prof Ismail summarised the webinar discussions and commended the fabulous job of Prof Carlos Lopes in moderating the event. He also thanked all the participants, especially the speakers for their rich and robust presentations and discussions. He indicated that the discussions painted a rich tapestry of the complexity, diversity and variety of different situations across the African continent. He also recognised Ms Ezirigwe’s contribution about the important role of women in the structural transformation of the agricultural sector, which plays a pivotal role in Africa’s industrialisation agenda and the AfCFTA. Prof Ismail further stressed Mr Sihlobo’s contribution regarding the need for increased productivity, mentioning that this will increase yield per capita. He also reflected on the case of South Africa, where biotechnology has been a positive story on increased productivity. He reiterated opportunities for Africa to increase high-value production, particularly in areas like horticulture, referring to Ethiopia and Kenya (flowers) and South Africa (citrus). Africa produced the largest exports of citrus into the European Union. Prof Ismail acknowledged Dr Aniemeka’s contribution, which focussed more on government policy and how important it is to ensure that we have the right policies to support investment and the critical importance of smallholder farmers in Africa, where the largest number of people are employed. He concluded by remarking on Mr Hamoui’s fascinating stories and Prof Lopes’s insights about the real problems people face at the borders and the concept of non-tariff barriers. This included AfCFTA’s conceptualisation of Grow Africa, Trade Africa, Move Africa to work towards a borderless continent.

Lastly, Prof Ismail mentioned that one key insight from the webinar discussion was the tremendous opportunity and hope that exists. With the dawn of the African Continental Free Trade Area and its imminent implementation in early 2021, the agreement creates a massive market for the 55 African countries, the largest group by population in the world. AfCFTA will help to increase the productive capacity of African countries, thereby enabling them to take advantage of this market. He mentioned the examples of others who have cooperated and worked together to build regional markets, giving such examples as the African Cashew Alliance. He also gave an example of the Sustainable Cotton Initiative and reiterated that such alliances can be used to build RVCs. Prof Ismail concluded by stating that the task for the Nelson Mandela School of Public Governance is to help create a platform for continued dialogue between experts, practitioners and policymakers on how we can continue to work together to build regional value chains in the agriculture sector across the continent.

Agriculture – Food Processing Value Chains, Retail and Food Security • SUMMARY REPORT