In mid-2022, a sign appeared on the street outside Fresh Mart, a local grocery store in the capital city. It read “New price list for all items due to the high level of inflation, bear with us”.
Inside the store, prices of daily commodities such as eggs, bread, cereal, peppers and vegetables had tripled in number, and for the average consumer, that became just another day of pondering how to afford the next meal.
Across Africa, it is clear that many people cannot afford a healthy decent meal. The recent global food price crisis is representative of the confluence of geopolitical conflicts, worsening climate shocks and after-effects of Covid-19 both locally and globally.
Even so, the ripple effects of these food insecurity drivers on supplies and prices of key food commodities and inputs reverberate through local markets.
A recent report by Afex on the annual outlook of commodities shows that prices of major staples spiked in some countries on the back of supply disruptions, local currency depreciations and higher fertiliser and input costs.
We are paying more for food in the markets and it is costing farmers more to provide it, pushing vulnerable households further into poverty and hunger.
To reduce these pressures, efforts are needed to build resilience and make nutritious food commodities more affordable and available to Africa’s rapidly growing population.
Understanding the real cost of food security is a first and necessary step towards building a fit-for-purpose strategy that transforms our food system.
The World Bank estimates that 65 per cent of land in Sub-Saharan Africa is still tilled and ploughed manually. Underdeveloped infrastructure such as storage and road scarcity, and lack of funds to sustain and grow farms, discourage farmers from investing in modern tools or farming practices to increase yield.
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This current crisis is impacting how food is produced, the logistics of food distribution and increasing post-harvest food losses across the value chain.
Despite its vast agricultural potential, Africa is still a net food importer as the continent continues to incur a huge food import bill and gets significantly affected by shocks to the global supply chains. As of August 2022, the global wheat supply disruptions resulting from the Russian invasion had sent the average price per bushel of the three key wheat variants up by 165 per cent and the price of flour has increased by nearly 150 per cent. This price hike has also been transmitted to buckwheat, which is a key input in the production of pasta and noodles.
Ensuring the free flow of inputs, resolving access to land, increasing financing options for AgriSMEs and proper infrastructural networks are irreducible minimums in stemming the tide of rising prices and boosting self-sufficiency in Africa’s food production. Additionally, agricultural policies must be targeted at small-scale farmers who are the major contributors to food production.
This also extends to supporting farmer service companies who have built business models around the aggregation of farmers into cooperatives or clusters and have made it a mandate to provide them with inputs, insurance, extension and market support to improve production.
These are some of the solutions that we have played around with in our business at Afex, serving over 400,000 farmers across Nigeria, Kenya and Uganda today.
The question of what other solutions can be integrated or scaled on the part of all players to guarantee Africa’s ability to feed itself is a necessary one to be answered.
The question of what is the real cost of Africa’s food security formed the basis of Afex’s conversations at the 10th Sankalp Africa Summit, with standout ideas around financing, the place of commercial agriculture in Africa’s food systems as well as climate risk and strategies for adaptation being brought to the fore.
At the heart of the issue of cost, however, a persistent answer seemed to be highlighted on two levels; a recognition of the need for commercially viable models in agriculture alongside the admission that some solutions to our food security challenges will require a blend of commercial capital and technical assistance facilities.
To achieve food security in the short term, global and local efforts are needed to curtail food price increases and buffer their effects on people, especially those at the bottom of the pyramid.
In the long term, we must build the resilience of markets to the shocks that cause price hikes and even work to not allow those shocks to happen in the first place.
These solutions will require catalytic funds to offset the perceived risk in agriculture or agribusiness and transform Africa’s food systems, which will be critical to meeting the SDGs, especially SDGs 1, 2, 5 and 8; no poverty, zero hunger, gender equality and decent work and economic growth.
The writer is the Group Chief Executive of Afex, which works to unlock capital in Africa’s commodities markets.