By Kuir Mayen Kuir, Nairobi, Kenya
Saturday, September 12, 2020 (PW) — Poverty in Africa has invaded a huge number of households. It is completely ravaging away virgin dreams from vulnerable children from all over the continent. It is relentlessly forcing its sharp edges into dreams that are bestowed on children with no silver spoons on their mouths.
Something substantial such as intra-trade within the continent of Africa should be implemented with the agility it deserves in order to intercept the stretching tendrils of poverty before it razesaway all the dreams from various African households.
The African intra-trade is a very important economic activity and it can be boosted with enormous means and efforts that the leaders in Africa are disciplined enough to stand up and implement them. If I were an African leader, the following should be the priorities in promotion of the African intra-trade for the benefits of the agricultural sectors in the continent.
1) Open borders to free flow of goods and services but tax people
This removal of tariffs and other forms of taxes encourage the free flow of goods and services within the borders of the African countries. This encourages multilateral relations with the countries as one country that is specialized in production of a certain commodity trades with more countries with ease.
This boosts the agricultural sectors as these countries in question invest heavily in what they produce best in order to sell more and gets more revenues. This can be encouraged through diplomatic ties with the governments of Africa. For instance, the importation of eggs from Uganda by Kenya should be free so that the mobility of goods between these two countries is encouraged.
The prices of eggs too should be floored so that those farmers in Uganda who rear poultry for eggs can continue with their farming activities without running them at a loss. This should be the very same approach when it comes to other goods leaving Kenya for Senegal such as tea and other horticultural products such as flowers.
2) Imposition of strict tariffs and quotas on the imports
The preference on imports by many households within the continent of Africa has dominated the market. This suppresses the consumption of local goods and services which as a result contribute to the death of local and infant industries. This can be explained by the perception that surrounds the consumption of local goods and services; That the goods and services produce locally are often of low standards and quality.
This discourages the consumption of local goods by a big margin. This myth and misconception surrounding these local markets can be corrected by imposing tariffs on goods that are coming into the continent. Quotas too are other modalities that can at least be put forward to control imports. The African governments should increase import duties and set reasonable quotas so that the African local commodities dominate the market. This strategy in collaboration with value addition helps in the rebranding of African local commodities.
The governments of Africa should consider erecting infrastructures such as local industries for the addition of value into our commodities. For instance, Ethiopia is the leading producer and exporter of the Arabica flavoured coffee in the continent of Africa. In order to maximise profits in this sector, the coffee beans can be washed, dried and converted into coffee powder in Ethiopia before being circulated in both local and international markets.
3) Reducing the costs of inputs, provision of storage facilities and subsidization of agricultural products.
This trio works in conjunction with each other, all of these factors means good for the farmers and the intra-trade within the continent. Reduction of the costs on inputs use in production is a key aspect of boosting the market because the cost of production influences the prices in the market.
When the means of production are cheap, it enhances production because many farmers will be motivated by the cheap inputs. The construction of storages facilities reduces perishability and wastage of goods produced. These facilities encourage the producers to produce extensively because they are no longer worried about their goods going to waste.
For the case of the high-priced goods in the market, the African governments should consider subsidizing these kinds of goods so that they are affordable. Those agricultural products that are produced in large scales by private farmers such as sugarcanes can be subsidise by the governments to help them stay in the market.
This can also be applied on any other product that may face extinction due high cost of production. All these aspects catalyses production hence the trade is improved.
4) Crop diversification and diversification of rural economy.
This crop diversification solves the challenge of production of similar goods within the continent and hence presentation of variety of goods and services in the market. Instead of African countries investing in one type of crop which may lead to market flooding thereafter, the countries should avoid these economic anomalies by encouraging specialization in adverse variety of crops in different economies in order to encourage diverse consumption.
The rural economies should as well be educated on intercropping so as to diverse their economies. The rearing of domestic birds for eggs and other related products, the animal farming such as bee keeping for honey and cropping of cereals with legumes is a perfect way of diversifying rural economies so as to generate enough revenues for the rural beneficiaries. This can be enhanced by the governments through provision of subsidies and mechanization of agriculture.
Mechanization of agriculture gradually replaced the manual labour which results in high productivity. The use of harvesters for example is a major ingredient in creation of large farms for economic boosting. This provide voluminous quantity for both subsistence and commercial activities which eventually help in the implementation of one of the top priorities in the sustainable Development Goals (SDGs).
5) Creation of African common market that regulates prices of commodities
The availability of African common market for African goods is more than just a blessing for the continent agricultural sector. This market is going to be a prominent investment for African goods. This market will be the destination for the African commodities for commercial purposes. This market should be the price setter for all the commodities within the continent.
Given the common scenario where some goods fetch better prices than others, the market will harmonise the prices so that all similar commodities unanimously fetch the same prices in any part of the continent. This approach may meet a challenge later when some countries would source commodities of high qualities than others.
This may disadvantage other producers especially when their commodities are treated with the same price tag just like others. This prompt an important call for implementation of a common standard that must be a requirement for commodities to enter this market. This standard is going to be our landmark for commercial negotiations.
The presence of this market is another assurance that boost farmers’ confidence in production. It simply gives the farmers reason to stay longer in their farms so as to produce enormously for extra commercial benefits beyond their borders.
When African governments emulate and adopt these proposals, then the intra- trade will be promoted and this help unleash the agricultural potentialities in the continent.
The author, Kuir Mayen Kuir is a student of economic and statistics at the University of Nairobi. He can be reached via his email mayenkuir@gmail.com