Journal of Global Resources

Volume 4 (02)
July 2018
ISSN: 2395-3160 (Print), 2455-2445 (Online)

Page 11-17

02
A QUALITATIVE ANALYSIS OF AGRO-ECONOMY TRADE IN AFRICA
Raymond Erick Zvavanyange1 and Irvine Vusani Makuyana2
1

Country Representative
Young Professionals for Agricultural Development, Harare, Zimbabwe
Email: zvavanyanger3@gmail.com
2

Events Coordinator
The Circuit Media Private Limited, Johannesburg, South Africa
Email: irvinem@circuitmedia.co.za
Abstract: Agriculture plays an important role in the economies of African countries. Recently,
the picture of imports versus exports for agro-based sectors has been uneven with reports ofmore imports than exports on the continent. We address in this article issues focused on theagro-economy in Africa. Our qualitative analysis draws inspiration from the work of Calestous
Juma (late) to explore options for the continent’s governments and leaders in planning for anauthentic agro-economy. We suggest that a thorough interpretation and understanding of thecapitalistic agreements is a must for African governments so that they leverage on the benefits
from the agreements. Secondly, African governments and the private sector in agro-based
economies should put in place measures to facilitate learning and experimentation in agro-tradeand ensure its sustainability thereof. Third, agricultural entrepreneurs are a cog to authentic
agro-based economies. We establish wide-ranging positive developments in the agro-economy,
which are yet to be fully assessed for their benefits to African governments and populations. We
conclude that any capitalistic agreements especially those to do with agro-trade take place inproximity and association with the prevailing social order and not in isolation in Africa. The new
agro-economy opportunities warrant intense study of agriculture trends and developments with aview to improve decision making and ensure preparedness for times of the present and times ofthe future.
Key words: Agriculture, Agribusiness, Capitalism, Entrepreneurship, Economic Integration
Introduction
Agriculture plays an important role in the economies of African countries (African Development
Bank, 2016; NEPAD, 2013). The World Bank (2013) estimates agriculture and agribusiness to
be worth US$ 1 trillion industry in Sub-Saharan Africa (SSA) by 2030 (compared to US$ 313
billion in 2010). It has long been argued that any unrecognized opportunities and potential
become the missed chances in Africa’s development (Bond, 2003). The objective of this article
is to provide the options in which Africa can leverage on the prospects of agribusiness throughthe trade of commodities. We assert at the onset that futuristic and transparent deals in agrotrade can unleash the power of agro-industrialization. We suggest that a thorough interpretation
and understanding of the capitalistic agreements is a must for African governments so that they
leverage on the benefits from the agreements. Secondly, African governments and the private
sector in agro-based economies should put in place measures to facilitate learning andexperimentation in agro-trade and ensure its sustainability thereof. Third, agricultural
entrepreneurs are a cog to authentic agro-based economies. We establish wide-ranging positive
developments in the agro-economy, which are yet to be fully assessed for their benefits to
African governments and populations. A number of terms in this article have parallel and closelyrelated meanings: agro-trade, agro-economy, agri-business, and agro-industry. We use the term
“capitalistic agreement” as a metaphor in order to compel Africans to discover their authentic
economic potential. It is a serious call to all African peoples to search beyond profit making,control and dominance in their contact with the outside world. Any business agreement that givethe illusion of benefits to African governments, immediately take on the capitalistic function.
11

Methodology
We use a qualitative analysis as the basis to build a case for agro-economy planning for Africa.
Berg (2001:6) notes that “qualitative research properly seeks answers to questions by examining
various social settings and the individuals who inhabit these settings.” According to Cosette
Taylor of University of Manitoba, Canada, analysis means “to break something up into parts,
pieces, reasons, or steps and look at how the pieces are related to each other.” Taylor further
notes that, “analysis usually goes together with synthesis because first you break down aconcept/idea into its important parts (analysis), so you can draw useful conclusions or makedecisions about the topic or problem (synthesis).” We build our analysis using the ideas on
agriculture in Africa from the late Calestous Juma as observed in his work. We build on Juma’s
ideas to provide options in agro-economy planning for African governments. The methodology is
as it were an attempt to “build order and complexity out of chaos” (Juma & Mangeni, 2018). We
hold such was a characteristic attribute in the late scholar for Africa to take a deep look at itself
and act on what it could (and can) do for its people within a context of learning andexperimentation.
Findings
African Agriculture and Global Agricultural Value Chains
African agriculture is diverse and heterogeneous. According to the World Bank (2013),
agricultural production and agribusiness together constitute an average of around 45 per cent of
the economy of Sub-Saharan Africa. The World Bank states further that agricultural value chainsin Africa are mostly made up of micro, small, and medium enterprises. This sector partly
provides for the local needs complemented with imports. The reasons for food imports in Africa
include: population growth, urbanization and changing diets, which leads to increased demand
for food and agricultural products; inability to address constraints within the local production
systems; and social and cultural norms/constraints concerning farm and agricultural products.
Consequently, dumping has emerged as a matter of concern to governments and local
businesses.
Defining Dumping
Dumping means export of products (goods) by a country to another country at a price lower thanits normal value (World Trade Organization, 1994). Dumping implies low priced imports only inthe relative sense (relative to the normal value), and not in absolute sense. The normal value isthe selling price of the product in the exporting country. The World Trade Organization (1994)
prescribes the principles to be followed by the member countries for imposition of anti-dumping
duties, countervailing duties and safeguard measures. Anti-dumping measures correct thesituation arising out of the dumping of goods and its trade distortive effect. The use of antidumping measure as an instrument of fair competition is allowed by the World Trade
Organization. Anti-dumping duty is recognized as an instrument for ensuring fair trade and is
not a measure of protection per se for the domestic industry. The duty provides relief to thedomestic industry against the injury caused by dumping (World Trade Organization, 1994).
Exports and Imports in Africa
Africa’s expanding demand for food has been met gradually by imports from the international
market (World Bank, 2012). Kimenyi, Lewis, and Routman observe that most of the exports
from Africa go to the world’s advances economies, and most of the imports come from the same
economies. Furthermore, trade among African countries is low (World Bank, 2012).
For
instance, only 5 per cent of Africa’s imports of cereals come from other African countries (World
Bank, 2012). Again, Africa is a net importer of animal and animal products (Tambi, Maina, &Bessin, 2004). According to the World Bank (2012), the demand for food will continue toincrease, it is projected to double by 2020, and consumers will be located in Africa’s urban
areas. UNCTAD (2013) states that by most account, African countries have not made significant
progress in boosting regional trade. Over the period from 2007 to 2011, the average share of
intra-African exports in total merchandise exports in Africa was 11 per cent compared with 50
per cent in developing Asia, 21 per cent in Latin America and the Caribbean and 70 per cent inEurope (UNCTAD, 2013). The afore-mentioned disparities in the African import-export situation
also present the case for intra-African trade.
12Experimentation in African Regional Economic Integration
Scholars have explored the question, feasibility, and necessity of African regional economic
integration (Juma & Mangeni, 2018; Saasa, 1991; UNCTAD, 2016; United Nations Departmentof Public Information, 2014; World Bank, 2012) given the hardships the continent faces fromtime to time (Saasa, 1991). Saasa (1991) noted that economic groups in Africa attempt tointegrate their economies at the level of trade and/or production. Saasa adds that the resultsfrom the attempts at integration are and have varied within and across economies. Analysis on
the motives and processes of regional integration have been limited, with the most recent work
being that of Juma and Mangeni (2018), who observe the existence of institutional innovationthat is initiated and experimented with by African economies outside the purview of mainstream
economic analysts. According to the United Nations Department of Public Information (2014),
the average intra-regional trade in Africa is 10-12 per cent, while North America is 40 per cent,and Western Europe 60 per cent. Challenges to intra-regional trade include regional integration,
infrastructure, economic diversification, climate change and disaster risks, conflict, and borderissues. Kimenyi, Lewis, and Routman observe that intra-African trade can help the continent’s
industries become more competitive by creating economies of scale and weeding out producers
that are less productive in the market place. The scholars add that intra-African trade canestablish and strengthen product value chains and facilitate transfer of technology andknowledge via spillover effects. Lastly, the scholars assert intra-African trade can incentivize
and spur infrastructure development and attract foreign direct investment. Many countries,
including Africa, have opted to confront their development problems jointly (Saasa, 1991). For
instance, the European Union is the proponent of Economic Partnership Agreements. The
United States of America is the proponent of the African Growth and Opportunity Act. It is
recognized that African heads of government agreed to establish a Continental Free Trade Area
(CFTA) in 2012 and started negotiations in 2015. Juma and Mangeni (2018) states that CFTA
was preceded by the Tripartite Free Trade Area Agreement in June 2015 in Egypt, anagreement which covers 26 nations with a population of 720 million and Gross Domestic Product(GDP) of US$1.3 trillion. CFTA will cover more than a billion people in 55 countries with a
combined GDP of over US$3.5 trillion (Juma & Mangeni, 2018). According to the African Union,
the objectives of the CFTA are to1:••••

Create a single continental market for goods and services, with free movement of businesspersons and investments, and thus pave way for accelerating the establishment of theContinental Customs Union and the African Union Customs Union;
Expand intra-African trade through better harmonization and coordination of tradeliberalization, and facilitation regimes and instruments across Regional Economic
Communities and across Africa in general;
Resolve the challenges of multiple and overlapping memberships, and expedite the regionaland continental integration processes; andEnhance competitiveness at the industry and enterprise level through exploiting opportunities
for scale production, continental market access and better reallocation of resources.

It is important to note that not all African governments signed the CFTA at its launch in
Kigali, Rwanda, in early 2018. Each country should be allowed to examine the agreement indetail as well as fully assess the positive and negative benefits anticipated to its economies as aresult of participation in the agreement.
Resource Appraisal in Africa
An authentic agro-economy for Africa demands the intelligent application of knowledge, andhuman expertise that is adaptive to changing circumstances and conditions. Researchers
content that the continent is endowed with natural resources, of which, their exploitation reflectsof the office bearers and leaders in governments. Agro-economy planning ensures that thetrade of commodities benefits the actors involved, and directs efforts to all sectors of theeconomy. An important feature to complement agro-economy planning is the “demographic
dividend”, the young people in Africa. With the increase in business and social networks, young
1

Information on Continental Free Trade Agreement details as found on the African Union website,
https://au.int/en/ti/cfta/about13

people possess now more than ever the opportunity to propel their countries to the next frontiersin agro-economy. However, this potential needs to be assessed and evaluated on a case-bycase basis as the continent is rich in culture, and heterogeneous.
Case Studies
Case Study 1: Africa’s Chicken Crisis2
The poultry sector featured prominently on the news headlines in 2016. Evidence suggests that
there was an outcry from the poultry sector in certain African countries owing to huge inflow ofchicken imports from Brazil and other foreign countries. It was argued by the producer
organization that the cheap chicken imports were exerting pressure on their local poultry sectors,
and thus curtailing the ability of smallholder farmers to compete on an equal basis. Giving
advice on the solutions to the chicken crisis, Calestous Juma argued that Africa’s chicken crisis
is an expression of overall weaknesses in its agricultural system. He exhorted that if Africa
cannot raise its grain production it cannot expect to do well in increasing its chicken output. The
scholar suggested for upgrading the overall agricultural systems as a solution to the chicken
crisis, in particular, the following measures:
•
•
•
•
•

Addressing feed cost and quality issues.
Better breeding and extension programs akin to those needed for crops.
Disease control.
Addressing infrastructure and logistical concerns.
Availing credit for producers.

Case Study 2: A Twitter Chat on Agripreneurship in Africa - #AskCJuma
On Saturday June 18, 2016, Calestous Juma (@calestous), The Tony Elumelu Foundation(@TonyElumeluFDN) and GroIntel (@Grointel) hosted Twitter Chat #AskCJuma on
Agripreneurship in Africa. The aim of the Twitter Chat was to enhance African agriculture acrossthe entire value chain, and not just farming. Twitter participants were from around the world andrepresented various disciplines and professions. According to the Tony Elumelu Foundation(2016), 30 per cent of their recruits in the Tony Elumelu Entrepreneurship Programme(#TEEP2015) class were focused on the agricultural sector. The Twitter Chat generated useful
insights and suggestions which can be considered for implementation by any authority in Africa.
We acknowledge the premier contributions and inspiration provided by the Chat, and suggests
generic government action items to support local agribusinesses and individual entrepreneurs(Table 1).

Future Potentials and Welfare of the People Involved in Farming and Agribusiness
The main constraints and opportunities in the agricultural value chain are highlighted innumerous studies. These studies have also argued for more investments in agriculture by theprivate sector, especially capacity building, finance and technical support. Several institutions
have aggressively promoted the image of agriculture in response to the calls for investments inagriculture. Future potentials and welfare of the people involved in farming and agribusiness will
require many strategies, approaches, programmes, activities, and tools. An example of theneeded approach in farming and agribusiness is continuous learning and experimentation.
Learning and experimentation have formed the basis of innovation and sustainability in some of
the initiatives in agriculture. It is argued in literature and in practice that the young people are
the hidden force in agricultural entrepreneurship. Agricultural entrepreneurs can draw upon thehistory of the African people to create new thoughts and products in the agro-economy.

2

Why does Africa import so many chickens? By Professor Calestous Juma, Harvard Kennedy School ofGovernment, Belfer Center for Science and International Affairs, Cambridge, Massachusetts
http://www.bbc.com/news/world-africa-37617379 (Accessed on 12 October 2016)14

Table 1: Summary of Expert contributions and Organization Action items from the#AskCJuma Twitter Chat on June 18, 2016
Expert Contributions
The narrow focus on farming by agricultural value
chain actors tends to result in undervaluing
farmers and treating them as mere producers.

Farmers need to be viewed as entrepreneurs justlike other actors along the full agricultural value
chain.
Farmers and other agripreneurs deserve thesame incentives, access to capital, and legal
support industrialists get.
Unleashing potential in agribusiness calls for
multi-stakeholder focus on research and funding.

Africa imports nearly 83 per cent of its food. Thisis partly because of the limited investment in thefull agricultural value chain.
Investment in adequate infrastructure will enable
African nations to also export food, and not justreduce imports.
Mobile technology can also propel African nations
to become net exporters through improved labour
and access to information.
African agriculture tends to be concentrated
where there is inadequate infrastructure, notwhere there is arable land.
All major areas of agricultural investment require
smart-partnerships
betweengovernment,
industry, and academia.
The transition from traditional farming will involve
upgrading agricultural technology along the fullvalue chain. The hand hoe has become theenduring symbol of African agriculture. This
needs to be gradually replaced by farmmechanization.
Investments are needed to improve access andlower cost of farm equipment to increase
productivity.
There is a need for more fact-based publications
on the agribusiness landscape in Africa to reveal
where investments are needed.

Consistent policy support is essential forsustaining agribusiness. Many African countries
are starting to realize this.

Options to agricultural value chain actors toenable an authentic agro-economy
Improve the competitiveness of the farming enterprisethrough appropriate legislation, regulations, andfinance.
There is a need for organizations to experiment withthe different aspects found within the multifunctional
agriculture.
Reward-systems to appreciate the entrepreneurial
and risk-taking nature of entrepreneurs (farmers).
Farming is a business which requires government
and international support.
Timely address of agro-trade concerns.
Revisit the declarations made in African agriculture so
as to honor the commitments made by the Heads andState of Governments such as Maputo Declaration,
Malabo Declaration, and New Economic Partnershipfor Africa’s Development - Comprehensive African
Agriculture Development Programme.
Enhance investments in Research and Developmentin the agricultural value chain to improve Africa’s
capacity to feed and nourish itself.
Scout and adopt futuristic investments in the
agricultural value chain.
Experiment with Information and Communication
Technologies and their benefits and impacts inagriculture.
Leverage on the competencies found in specific agrobased economies in Africa.
Critical dialogue on finding common ground in landuse planning.
Experiment
withpublic-private-partnerships(agriculture) in the economies of African countries.
Modernize African agriculture through appropriate
farm technologies for smallholder farmers.

Address costs issues in farm mechanization.

Enhance the capacity of researchers to produce highquality research and evidence that influences theagribusiness landscape.
Commission strategic research in the agriculture
sector.
Take a pragmatic rather than an ideological approachto agribusiness. Some of the farmers that left
Zimbabwe have moved to other countries where theirknowledge and skills are valued.

15

Storage often requires energy and processing
technology which are linked to availability ofadequate infrastructure.
Regional trade is a major stimulant of value chain
development (e.g. the example of semiprocessed products).
Listen to individual entrepreneurs and industry
experts for possible investment opportunities.
Seed improvement is a critical aspect of having aviable agricultural system irrespective of farmsize.
Creative thinking across the agricultural value
chain.
It is critical for African policy makers to monitorchanging subsidy programs of imported markets.

Create agri-information stations in rural areas;
connect farmers to technology and information, akind of a betting house. Farmers could visit theAgri-info station and find pricing on mounted
screens, browse online and talk to virtual experts
online.
The low labour productivity is an opportunity fortechnological improvement, not condemnation ofagriculture. Many of the technologies and skills
developed to improve agriculture often diffuse
into other sectors of the economy.
A focus on value-chain efficiency would result ingreater labour productivity and economic
diversification.

Revisit issues in post-harvest processes.
Elevate training in agricultural engineering and related
skills.
Continue with efforts linked to regional economic
integration.
Smart-partnerships in the agricultural value chain.
Appreciate the critical mass of experts’ in-country,
and leverage on their knowledge, skills, and attitudes.
Include business people in negotiating teams.
Support local start-ups with skills, new researchtechniques, and enhanced cooperation withsmallholder farmers.
Start small. Smart-partnerships.
Seeking out advice from authorities in African
agriculture.
Enhance knowledge and understanding of dynamics
involved in subsidy programs.
Targeted subsidy programs so that they achieve theexpected results.
Expand opportunities afforded with the digital
economy to remote parts in African countries.

Assess critically the contribution of agriculture to
African economies, and leverage on the findings.

Enhance efficiency in agricultural value chain.

Source: Authors

The young people are essentially the face of disruption in agriculture and agribusiness.
An emerging concept targeted at the continent, and gaining traction is innovative volunteerism
used within the context of food security and environment. Innovative volunteerism aims tomaximize on the energy and power of Africa’s people especially the young people in foodsecurity based efforts that protect and preserve the environment (Munang, 2018). Embedded ininnovative volunteerism is the argument that people, especially the youth and the talents, skills,
energy, and creativity they represent, is the sovereign capital to be invested in catalytictransformation of the continent’s economic and productive sectors.3 In particular for the agroeconomy, the contexts are different and it is prudent to suggest that the success in the trade ofcommodities partly lies in the facilitation processes that are done to assist both small-scale andlarge-scale farmers. In innovative volunteerism, the facilitation is through climate action, whose
implied ultimate goal is the liberation of the peoples of Africa including their capacity to compete
in agro-trade on their own terms as well as shape economies and transformation. In this regard,
policy, regulation and legislation are a key in fostering innovation in agro-economy planning in
Africa. In addition, thorough assessments and studies would need to be done to present thecase for private sector investment in the field as well as for partnerships. As the case studies
have hinted, there is an aptitude required of African governments and leaders in order for themto make informed decisions that attest to their preparedness for times of the present and timesof the future. While there are a host of factors and variables in agro-trade, any trade agreements
entered upon by African leaders, governments, and the private sector, should be explicit on its
accrued benefits to the overall agro-economy. As evidenced in Table 1 summary, pertinent
3

Dr. Richard Munang’s new book, Making Africa Work through Power of Innovative Volunteerism, ispublished, https://thisisafrica.me/making-africa-work-power-innovative-volunteerism/(Accessed on 28 June
2018)

16

questions demand answers concerning Agripreneurship and its ability to foster the trade in andof agricultural commodities.
Concluding Remarks
This article has argued for an authentic agro-economy as the bedrock to African economies.
African governments should invest in intra-African trade, and proceed to reduce the import bill aswell as facilitating the growth of local agribusiness. The article has also shown that trade
agreements occur in proximity to an association with the prevailing social order in agroeconomies in Africa. We have also denoted that African governments should continuously
assess and evaluate their national circumstances and priorities especially as it pertains to trade
agreements and the ins-and-outs of the agricultural value chain. Any pristine concepts andinitiatives such as innovative volunteerism are opportunities for the creation of synergies in theagro-economy. These synergies should be fully assessed by all actors. There are no guarantees
to any entity that with written policy, regulation, and legislation in agro-economy, all entities willact professionally on the expressed principles and ethical practices as they participate in theagro-economy. A search for the authentic agro-economy potential will demand everyone’s full
attention in order to brave times of the present and times of the future.
References
1. African Development Bank, (2016) Feed Africa: Strategy for Agricultural Transformation in
Africa, 2016 – 2025, Abidjan: African Development Bank.
2. Berg, B.L, (2001) Qualitative Research Methods for the Social Sciences, 4th Edition, London:
Allyn and Bacon.
3. Bond, P, (2003) African Anti-Capitalisms, Society in Transition, 34 (2): 233 – 251.
4. Juma, C, & Mangeni, F, (2018) African Regional Economic Integration: The Emergence ofInstitutional Innovation, Massachusetts: Harvard Kennedy School, Belfer Center for Scienceand International Affairs.
5. Kimenyi, M.S., Lewis, Z.A., & Routman, B, (n.d.) Introduction: Intra-African Trade in Context.
Washington D.C.: Brookings.
6. Munang, R, (2018) Making Africa Work through Power of Innovative Volunteerism, London:
Author House.
7. NEPAD, (2013) African agriculture: transformation and outlook, Johannesburg: New
Economic Partnership for Africa’s Development.
8. Saasa, O.S., (eds.) (1991) Joining the Future: Economic Integration and Co-operation in
Africa, Nairobi: African Centre for Technology Studies.
9. Tambi, E.N., Maina, O.W., & Bessin, (2004) Animal and Animal Products Trade in Africa,
Journal of International Food & Agribusiness Marketing, 14 (4): 49 – 67.
10. The Tony Elumelu Foundation, (2016) Unleashing Africa’s Agricultural Entrepreneurs:
Improving the Enabling Environment for Agriculture, Lagos: The Tony Elumelu Foundation.
11. UNCTAD, (2013) Economic Development in Africa: Intra-African Trade: Unlocking Private
Sector Dynamism, New York and Geneva: United Nations Conference on Trade andDevelopment.
12. United Nations Department of Public Information, (2014) Africa Renewal, New York: United
Nations Department of Public Information, Strategic Communications Division.
13. World Bank, (2013) Growing Africa: Unlocking the Potential of Agribusiness, Washington,
D.C.: The World Bank.
14. World Bank, (2012) Africa Can Help Feed Africa: Removing Barriers to Regional Trade inFood Staples, Washington, D.C.: The World Bank.
15. World Trade Organization, (1994) Agreement on the Implementation of Article VI of The
General Agreement on Tariffs and Trade, p.145, World Trade Organization.
Author’s Note
We dedicate this article to the memory of Professor Calestous Juma, FAAS, FRS, EBS, and(1953 – 2017). Calestous Juma was an Elder, a vast mind from Africa, and a scholar ahead of
his time. His work is active. Semper Fidelis.

17