NEW INVESTMENTS WILL GIVE AFRICA THE LEAD IN AGRI-DEVELOPMENT
Multinationals are already active cross-border distributors , but we expect new African producers to be attracted to the intra-
African produce-to-trade and value addition opportunity . Africa also needs to be ready for the next disruption in trade .
Linda Manda is Sector Head Agribusiness , Corporate and Investment Banking at Standard Bank
Sola David-Borh is Chief Executive of Africa r egions at Standard Bank
move deeper into African agriculture . Larger and more open markets , strong supplier networks and technology investments will drive Africa ’ s growth .”
Trade data , and Standard Bank ’ s own long experience of trade finance , shows that Africa has been a net importer of food for almost two decades although the trade deficit has narrowed recently . Despite impressive export growth of certain key products , other food imports continue to rise . The covid-induced disruption to imports are a reminder that regional resilience in food supply is a practical imperative , not an intangible aspiration .
A LARGER , MORE OPEN , INTERNAL MARKET IN SSA
First , the African Continental Free Trade Area ( AfCFTA ) should create a much larger internal market that gives producers access to a larger and more open market . Local production can better compete with the current import-and-distribute model . Large-scale production will arise when the returns are not stifled by trade friction . As an African bank , Standard Bank ’ s role is to put our strong balance sheet to work , lending to the new crop of agri-entrepreneurs .
Multinationals are already active cross-border distributors , but we expect new African producers to be attracted to the intra-African produce-to-trade and value addition opportunity . Africa also needs to be ready for the next disruption in trade . Some global imports will always be required but it would be wise to ensure that key inputs can also be sourced regionally .
FADING DISTINCTIONS BETWEEN SUPPLIERS
Second , the contrived distinction between the produce of small-holder farmers and very large commercial producers is beginning to fade . The new financial platforms being offered by Standard Bank will confirm the extent which large and small farming operations can complement one another . Out-grower programmes offered by large global firms allow smallholders to establish themselves as suppliers to the biggest and most profitable value chains . Tobacco , sugar and sorghum are all good case studies . Our banking platform is a place where buyers can meet producers , surrounded by market data on inputs , crop prices , volumes , regulations , trade advice and currency movements .
From the top of a tall grain silo , the neat polygons of monocrop plantations appear to be the only advanced outposts of progress . By contrast , small-holder farmland can seem rough and rudimentary remnants of a preindustrial age . Our own experience is quite different . Smallholder farmers that have access to the right platforms and better yields are also able to compete on quality and cost . Local knowledge of weather , grains , indigenous varieties , insects , and soil has accumulated over many years in Africa and is becoming a treasure of indigenous competence and resourcefulness . The huge expansion of biological patents attests to the large commercial value of small , local insights .
ADOPTION OF TECHNOLOGY AND OPTIMISATION LOGISTICS
The third recent milestone is the broad acceptance across Africa that advances in technology are not peripheral to growth . Grudging acceptance has given way to enthusiastic adoption . Healthy livestock , fertile plantations , productive greenhouses and efficient cold chains all require technology partnerships to keep them productive and profitable . Two decades of smartphone penetration in rural communities has probably eased the transition from guesswork and speculation to datadriven decisions and GPS mapping .
To make the most of this milestone , every hectare of land , every seedling and every bag of fertiliser must be used optimally . On-farm losses and unreliable methods are simply unaffordable during health pandemics and economic recessions . Private investment in telecoms , machinery and pipelines will eventually work alongside publicly funded infrastructure : roads , rail and bulk water supplies . Policy reforms need to support more publicprivate partnerships that have shown they can build and maintain high-quality infrastructure assets .
Consumer demand for less waste and more conservation will support investments in new systems that supply micro-nutrients to digitally-mapped crops and livestock . Food-insecure communities in Africa can cheer this development as much as timestarved households in wealthy countries : a regular surplus of well-priced food is the best guarantee of the social stability in which economic growth can best be cultivated .
11 africanthinker . com