A trend by African countries to protect local farmers and to stimulate the growth of agroprocessing through the raising of tariff barriers is creating project cargo opportunities. At present all the farming equipment and factory machinery needed to grow and process produce needs to be imported, points out Duncan Bonnett, director of market access and research at Africa House. “We’ve seen in the cement industry how the whole logistics value chain is affected,” he told FTW. There has been a boom in cement plant construction in Africa after countries started putting up barriers to imports. “With agriculture there is an entire value chain, which includes cold storage and warehousing,” says Bonnett. An example is the revival of a wheat milling plant in the port city of Lobito thanks to the Angolan government’s decision to reduce reliance on costly flour imports. Ongoing investment in the mill will make it one of the biggest in Africa, according to Bonnett. All the new equipment
is being imported by the owners Cerangola, which reopened the mill in 2016. Uganda has also seen growth in its milling sector after it banned exports of unprocessed grains in 2017. There are other opportunities throughout Africa. The South African Cross Border Road Transport Agency has identified a number of agro-processing opportunities in Zambia. They include the production of peanut butter, the processing of cashew nuts and cassava, grain milling, edible oil production, fruit canning and juice extraction, and bio-diesel and ethanol production. Market forces and government intervention are likely to continue to promote growth in the sector. According to the OECD-FAO Agricultural Outlook 2019-2028, agriculture faces much higher trade barriers than manufacturing. “While successive rounds of multilateral trade negotiations have succeeded in reducing import tariffs for manufacturing, progress in reducing agricultural protectionism has been more limited,” states the newly released report. It sees growing demand for agriculture-related logistics services. “A growing global population will continue to use increasing amounts of agricultural products as food, feed and for industrial purposes. “Much of the additional food demand over the coming decade will originate in regions with high population growth, in particular sub-Saharan Africa, India, and the Middle East and North Africa.”
At present all the farming equipment and factory machinery needed to grow and process produce needs to be imported. – Duncan Bonnett
