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Strong case made for deepening agro-industrial value chains in Central Africa

19 December, 2020
trong case made for deepening agro-industrial value chains in Central Africa

Yaounde, 19 December 2020 (ECA) – The alarmingly high rates of food importation in Central Africa should be a phenomenon of the past, economists and agriculturalists argued Thursday.

This, because all countries of the subregion are abundantly blessed with arable land and ecological zones favorable for animal protein production, necessary for developing strong agricultural value chains that should bring greater prosperity to the subregion in the context of the African Continental Free Trade Area (AfCFTA).

The assertion came out of an online session to review of a scoping study by the Subregional Office for Central Africa and the Private Sector Development and Finance Division of the UN Economic Commission for Africa (ECA), titled “Making the most of the African Continental Free Trade Area through in-depth analyzes of regional value chains and strategic agro-industrial clusters in Central Africa.”

The Study catalogues the present situation of key agricultural-product value chains (cassava, rice, maize, sesame, fish, livestock, sugar, palm/groundnut oil) in Cameroon, Chad and the Democratic Republic of the Congo (DRC) but will be expanded to cover the whole subregion. It further pinpoints overall strategic products on which the subregion as a bloc, should capitalize for trading in Africa’s new common market, viz.: wood, copper, cobalt, fish products, cereals and meat products.

Reviewers included representatives of farmer associations, agro-enterprises and other private sector representatives, the public sector, technical and financing institutions, other development organizations, civil society organizations, and Regional Economic Communities.

According to the study, livestock is a particularly interesting sector which offers value chain opportunities for Cameroon and Chad.

Cameroon produces a mix of small ruminants and bovine animal breeds but is far from investing consequential capital in the sector to develop an animal product chain from it, to first meet its own needs before exporting some more into the region.

Local breeders can only supply 70% of the 660 thousand tons of cattle meats demanded in the country yearly. Secondary transformation of its livestock products into items such as ham, cutlets and sausage are minimal while tertiary transformation of cattle products into leather, milk and yoghurt, is negligible.

The lack of capital, the study notes, is a major drawback for locals willing to invest in the 7.5 million-head cattle sector in the country which has its Far North (37.5%) and Adamawa (33.9%) regions as key production clusters. The rest of the investors in the livestock sector, farm small ruminants such as sheep, goats and pigs with principal clusters located in Bafoussam and Douala.

Chad has a much bigger livestock industry with over 14 million heads of cattle but with a similar business climate and transformation problems as in Cameroon. Meat production is still mostly done traditionally, hardly going beyond butchery operations, while export of live cattle mostly to Sudan, Nigeria and Cameroon is done on foot.  The country produces higher volumes of animal skins, most of which is informally sold on the local market. Nigeria, the main destination for outside sales, received 900,000 bovine hides and skins from Chad in 2014.

To address the rudimentary nature of livestock products in Cameroon and Chad, the baseline study calls for the need for more superior infrastructure, especially roads, for transporting cattle products and improved transformation and storage facilities; improved governance in accelerating administrative procedures to attract investors to set up businesses to improve the chain; and better and quicker judicial systems which promote the decentralization of justice to resolve issues of land use faster.

Another key sector brought into focus by the study is the cassava production chain in the DRC. Cassava farming, it states, represents about 75% of all food products with 18 million tons having been produced in 2018, falling from a 42 million ton-peak of 2016 (owing to the country’s security problems between the two years).

Overall local demand for cassava, which is manly cultivated traditionally in the northwestern basins of the country (Bas-Congo, Bandundu, Equateur, Kasai and Orientale), is about 12.6 million tons per year.  Relatively few semi-modern or modern farms proceed with transforming this harvest at large scale by squeezing out the tuber’s hydrocyanic acid, drying it, then processing it into chips, or mill-grinding on the farms.  The majority of farmers carry out processing with the grueling manual work of peeling, grating, kneading and pounding, mostly done by women.

“In view of the strong constraint represented by labor, improving the competitiveness of the sector will require not only significant progress in agricultural productivity but also at all stages of the processing chain,” posits the report.

“In addition, post-harvest losses, due to poor storage or inefficient processing activities, are currently very significant and should be reduced,” it adds.

“These difficulties in the agricultural value chain render it imperative for us to conduct such studies which respond both to the vision of the Central Africa Industrialization and Economic Diversification Masterplan – PDIDE-AC – which we are currently finalizing with the CEMAC and ECCAS commissions” said Antonio Pedro, Director of ECA’s Office for Central Africa.

“With the sub-regions ecological diversity and huge swathes of fertile fields, which give it singular comparative advantage for food and agricultural productivity, it is unacceptable that our countries keep overspending spending on food imports,” he said as he referred to worrying statistics on the issue.

For instance, in 2017, agricultural products represented 32% of the total imports of Equatorial Guinea; 24% of those from Gabon; 21% of those in the Central African Republic; 18% of those of Sao Tome and Principe; 17% of those of Congo and between 15 and 16% of those of Cameroon and the DRC. In Angola, the food import bill is about a whopping US$ 2.8 billion per year.

“What these preliminary studies show us, is the huge potential for developing a mix of value chains in the agricultural sector in resource-blessed Central Africa as means of transforming the industry, ensuring food security and creating wealth and prosperity for all, as envisioned by African Heads of State in the Comprehensive Africa Agriculture Development Program (CAADP) policy framework adopted in Maputo in 2003,” said Ms. Joan Kagwanja, Chief of the Agriculture and Business Enabling Environment Section of the Private Sector Development and Finance Division of ECA.

Thursday’s experts’ review will consolidate the three initial studies which would serve as working templates for use on value chains across the entire subregion in order to tease out various cross-country linkages and deepen value chains beyond farm/animal produce.

A compelling example would be the development of the US$ 2 trillion worth of potash held in the subsoil of the Republic of Congo. If the Congo extracts this mineral and ships it to Cameroon, Cameroonian labor could turn it into fertilizer and distribute across the subregion, to further maximize agricultural yields.



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