Africa’s agricultural exports were the subject of a recent webinar with South African media and experts from the logistics sector.
Despite South Africa’s robust agricultural capabilities, a significant portion of its exported food does not reach other African nations. This disconnect, primarily caused by inadequate logistics infrastructure, undermines regional food security and economic development. Addressing these logistical shortcomings is critical for harnessing the continent’s full agricultural potential, according to reporting from Food for Manzi.
The Logistics Gap in Agricultural Exports
A recent webinar featuring industry insiders highlighted the critical role of logistics in facilitating efficient cross-border trade within Africa. While South Africa is a major agricultural producer, experts noted that the majority of its agricultural exports are directed towards Europe and Asia rather than neighboring African countries.
This misalignment is particularly glaring in the context of ongoing droughts across the continent, which amplify the need for a reliable food supply. Strengthening the transport networks, especially railways, is essential for distributing agricultural products more broadly across Africa.
The Critical Role of Cold Chain and Rail Infrastructure
Abilash Kunjupilla, Managing Director at Imperial Clearing and Forwarding South Africa, emphasized the varying needs of different agricultural products. While some crops like potatoes and onions require minimal cold storage, others, such as apples and soft citrus, demand robust cold chain solutions, he said. Most agricultural produce in regions north of South Africa, like Zimbabwe and Zambia, caters to local consumption due to the lack of cross-border export facilities while the Middle East is a growing market. Enhancing rail connectivity from inland countries to African ports is crucial for transforming local production into cross-border trade.
Strategic Investment in Warehousing
The expansion of warehousing is another critical aspect of improving the logistics around Africa’s agricultural exports. Mark Prommel, a business development executive at Imperial Logistics, outlined the projected growth in Africa’s agricultural sector, necessitating an estimated USD 8 billion investment in strategic warehousing locations. Such facilities would support the intermediate storage and handling of goods, reducing spoilage and ensuring that agricultural products reach markets in optimal condition. This infrastructural upgrade is not only about capacity expansion but also about refining the logistics to achieve cost efficiencies.
Overcoming Trade Barriers
Despite some progress, sub-Saharan Africa still faces significant barriers to efficient cross-border trade. High tariffs and extensive border delays exemplify the systemic issues that exacerbate trade costs and limit market access, according to Prommel. For instance, the average cross-border time at South African borders is reported at 14.1 hours, a substantial delay that contributes to higher prices and reduced competitiveness of African goods. Prommel pointed out the absence of adequate cold chain infrastructure as a specific challenge, leading to substantial product losses.
A Vision for the Future
The potential for intra-African trade, especially in agriculture, is immense, according to Prommel. Estimates suggest that eliminating tariffs under the African Continental Free Trade Area (AfCFTA) could boost intra-African agricultural trade by as much as 674%, he said. Such growth could propel Africa’s agricultural sector to a USD 1 trillion valuation by 2023 if yields improve. Investing in logistics and infrastructure is not merely a necessity but a strategic imperative that could transform Africa into a global agricultural powerhouse by 2050.
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