Low food production to trigger increased import bill for region

Eastern Africa Grain Council executive director Gerald Masila. [Courtesy] Close to 70 per cent of the Eastern and Southern African countries will continue to import food to meet their deficit following the increased effects of climate change. The countries are feared to continue to grapple with the high cost of living and increased import bills as the nations endeavour to feed their population. During an Eastern and Southern Africa public-private policy dialogue and grain trade business-to-business forum held last week in Dar es Salaam, Tanzania noted that more than 60 per cent of the region's countries are facing low maize production levels following interruption of the crop by effects of climate change. Despite the low supply of food, Eastern and Southern African governments committed to facilitating the private sector to undertake trade following the signing of grain trade contracts valued at $409 million (Sh52 billion). The forum organised by TradeMark Africa in collaboration with the Eastern Africa Grain Council (EAGC) and the Alliance for a Green Revolution in Africa (Agra), noted that the region will have to rely on markets enjoying surplus to feed their population. Trade contracts EAGC executive director Gerald Masila explained the regional forum resulted in the signing of trade contracts amounting to 748,854 tonnes of assorted grains and pulses valued at $409 million expected to be traded across the region. "This demonstrates the enormous potential and demand for staple foods from surplus to deficit regions, emphasising the importance of seamless trade. The traders have started executing the new trade deals with EAGC connecting them to the regional commercial banks to secure credit to finance the grain business in the region. "We hope the new deals will strengthen trade in the region," said Mr Masila. He noted that in both Eastern and Southern Africa regions only, Ethiopia, Tanzania and Uganda countries are enjoying maize surplus and thus act as the saving granary which the rest of the two regions will have to import to meet their deficit. "Thus deficit-producing countries of Kenya, South Sudan, Somalia, Rwanda, and Burundi will have to import maize although at a lower level from Uganda, Tanzania and Ethiopia to meet their deficit. He said competition for the tradable surplus within the region will likely direct more flows to Kenya and the eastern parts of the Democratic Republic of Congo, where the purchasing power and prices are relatively higher. "Still, proximity to major producing areas will incentivise flows from Western and Southwestern Uganda to Rwanda, Northern Uganda to South Sudan and eastern Tanzania to Burundi." The forum attracted 120 delegates, including producers, traders, millers, and exporters from Kenya, Uganda, Tanzania, Rwanda, Burundi, the Democratic Republic of Congo, Malawi, Zambia, and Ethiopia. During the 2024-25 production year, 438,770 tonnes of maize valued at $153.5 million (Sh20 billion) will be traded within the region. "Maize prices are expected to follow seasonal trends across all countries but generally remain lower than last year due to increased domestic supply, except in Ethiopia, South Sudan, and Somalia, because of localised areas of below-average production, conflict-related disruptions in supply, and persistent inflation," Masila said. "The prices are expected to remain higher than average in most countries because of high production, fuel, and transport costs. The prices are expected to be lower than average in Uganda and Tanzania because of increased domestic supply and lower shortfalls in deficit countries." For example, Uganda is expected to experience above-average harvests and increased supply, a scenario likely to keep sorghum prices at just below-average levels and thus attract demand from Kenya and South Sudan. This is despite Kenya and South Sudan experiencing reduced shortfalls from above-average to average harvests. However, Masila adds that South Sudan will likely increase import costs by imposing taxes on cargo and experiencing rapid depreciation of its local currency, reducing inflows. Nega Wubeneh, head of markets and trade at Alliance for a Green Revolution in Africa noted that the African continent is currently grappling with a $41 billion (Sh5.33 trillion) food import bill and the same is expected to increase to over $100 billion (Sh13.2 trillion) by 2025. He said in the last cropping season, Southern African countries including Malawi, Zambia, and Mozambique experienced a devastating dry spell associated with El Nino-induced drought that has adversely affected crop production.

Low food production to trigger increased import bill for region

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