Intra-regional agri exports on the up
6 Dec 2018 - by
Agriculture exports in sub-Saharan Africa have declined around 55% since 2013 putting the sector under significant pressure.
According to Mansur Nuruddin, managing partner at MNCapital Africa Advisors, while agri exports have declined at a lower rate than exports in general it is imperative that the continent turns this trend around as soon as possible.
“The sub-Saharan exports sector has seen a significant decline of around 70% since 2013,” he said at the African Agri Investment Indaba in Cape Town recently. “Most of that decline has been in the demand for raw materials and the decline in the depreciation of the currencies.”
He said between 2012 and 2016 agricultural exports had also declined - albeit at a lower rate than the overall export drop.
Nuruddin said agriculture offered a considerable opportunity for countries on the continent to boost exports due to the increased demand for food around the world.
In Africa alone the food and beverage industry was projected to grow to $1 trillion by 2030, he said.
But, despite ongoing talk of increasing intra-African trade, the exact opposite has been seen in recent years. “Between 2013 and 2016 intra sub-Saharan Africa trade had declined by 38%.”
But, he said, during this same time intra-African exports in agricultural products had increased from 20% to 30%.
“Intra-continental trade brings very real benefit as it creates regional champions that are able to more effectively compete internationally, reduces the vulnerability to international markets and lowers fixed costs for new entrants.”
According to Nuruddin there is increasing understanding on the continent of the benefit of exports in general. “Exporting generates currency reserves, improves productivity and allows for the payment of better wages overall,” he said.
Commenting on the African Continental Free Trade Agreement (ACFTA), Nuruddin said it brought very real opportunity to countries to increase exports within Africa especially in the agricultural sector.
“There are some authors that theorise that agriculture liberalisation could increase the agri trade intra-continentally by up to 29%,” he said.