Category : Trade in Goods
International Economics Consulting Ltd. (IEC), at the request of UK Aid, prepared a report to support AGRA (Alliance for a Green Revolution in Africa) in framing its work plan in the context of the Africa Food Trade and Resilience Initiative. The main objective of the report is to inform AGRA and its partners on how to best prioritise and target its interventions based on various aspects such as geography, food commodities, and points of leverage in the market system in order to best utilise underlying opportunities to grow intra-regional food trade. This report is one of three regional reports under this study, covering 5 countries in East Africa namely: Ethiopia, Kenya, Rwanda, Tanzania, and Uganda.
The report focuses on 5 identified value chains of interest for the region (Bananas, Beans, Beef, Maize, and Vegetables), exploring the main patterns in production, consumption, and trade; the regional trade routes; the stakeholders; key findings on competitiveness; and constraints. Despite the existing potential and immense opportunities for food security and trade, multiple obstacles hinder the effect that these value chains can have on the communities in the region. Intra-regional trade in these agricultural products remains consistently low compared with inter-continental trade. Market fragmentation, monetary, tax, and trade fragmentation, and red tape for traders are some of the major limitations that restrict trade potential.
Bananas, for instance, are one of the key staple crops in the region and constitute one of East Africa’s economic backbone. However, multiple factors contribute to the low commercialisation of bananas. Average yields, often, do not exceed 30% of the crop’s potential, therefore, making banana productivity significantly low. Banana production and yields are hindered by lack of production capacity and efficiency, which are aggravated by pests and diseases such as banana wilt, soil degradation, poor application of farming practices, lack of fertilizers, the short shelf life of the fruit, limited availability of labour, postharvest losses, and poor market access.
Similarly, the other value chains analysed in this report encounter numerous constraints. However, IEC’s research and analysis indicate that the markets in these food crops have the potential to develop further. Intra-regional trade in agriculture also needs to be promoted to counteract any potential negative impacts from the international market. IEC has made numerous recommendations tailored to each value chain in order to boost commercialisation and intra-regional trade. The cooperation and collaboration of all the key stakeholders involved in the value chain, comprising of the smallholder farmers, buyers, processors, traders, service providers such as government agencies, non-governmental organizations (NGOs), and private businesses providing technical, business, and financial services, is essential across all value chains.