Last week I attended this major Africa-centric event in Kampala, Uganda. The theme of the Forum was “Food Security: A Business Opportunity”, and the focus was on creating new business partnerships to boost, innovate and revamp the African agro-food sector. The event was attended by NGOs and government, and the private sector was represented by investors, entrepreneurs and banking.
You can find the program, along with speaker and other information, at:
The general consensus was that the sector still lacks financing options and that this is a major constraint on growth, especially in light of the fact that interest on bank loans, if they are available, is around 20%. As one of many examples, tomatoes do very well in Uganda and this year’s crop was so bountiful that there was a glut on the market and prices crashed. Yet the ketchup served at my hotel was imported from Egypt. This is one of many examples of a missed opportunity – Uganda could be processing tomatoes for distribution throughout East and Southern Africa.
There are entrepreneurs with vision in the agrodealer sector, but their potential is limited by their inability to finance expansion. Loan guarantees (e.g., AGRA) and enlightened bank financing (e.g., Rabobank) have certainly helped, but the entire sector continues to be constrained. The Forum did, however, provide valuable opportunities for the various stakeholder groups to meet, interact and discuss collaborations.
Fake products (which we have addressed on several occasions) continue to be a problem, and reliable sources indicate that 40%-50% of all crop protection products sold in Uganda are fake. Entrepreneurs order packaging from China that mimics popular products, counterfeit the labels and then fill the containers with inferior generic product (e.g., glycophosphate). Even multinationals like Monsanto have failed to protect their IP, and the entire agricultural sector suffers from reduced productivity and excessive costs as a result. Government response has, for the most part, been that there are insufficient resources to launch appropriate regulatory initiatives.
With some well-publicized and notable exceptions (e.g., Ghanaian pineapple, Rwandan coffee) the agricultural sector in most countries is still typified by broken supply and distribution chains and by market distortions such as government subsidies and NGO donation of inputs. There is, however, a growing consensus that a market-driven approach to value chain development is probably the only viable pathway leading to a sustainable increase in output.
EMRC is well-organized, and in all likelihood you will be able to download a detailed report on the Forum within a week or two at http://www.emrc.be/en/events/past-events.aspx
Post written by Peter Bloch, consultant to CAS-IP