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Overview of the Agro-Industry Sector in Southern Africa |
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Regional trade initiatives have proliferated around the world, including Southern
Africa. In the last two decades, the Southern Africa region has witnessed a growing
number of regional co-operation and regional integration initiatives, such as: Common
Market for Eastern and Southern Africa (COMESA), Southern Africa Development Community
(SADC) and Southern African Customs Union (SACU), all involved in economic and regional
co-operation.
SADC was formed in 1992 and currently consists of 14 member countries, representing
a total population of approximately 200 million people, and covering an area of
9.1 square kilometres (World Bank, 2001). Three countries (the Democratic Republic
of Congo, South Africa and Tanzania) account for almost two thirds of the total
population (64.4%), while the five smallest members (Swaziland, Mauritius, Botswana,
Namibia and Lesotho) comprise only 4% of the total population. Economic activity
in the SADC region has continued to increase, with the SADC average real GDP growing
at 5.0% in 2005, as compared to the 4.1% recorded in 2004. However, countries are
at highly divergent levels of development, with seven SADC countries classified
as least-developed economies (Angola, the Democratic Republic of Congo, Lesotho,
Malawi, Mozambique, Tanzania and Zambia).
In most SADC countries, agricultural production is still the leading economic activity
and provides a livelihood and income to an important part of the population. According
to World development indicators database, the share of agriculture in GDP in the
SADC countries averaged 20.2% in the 2000-2004 period. These figures cover diverse
situations, with agriculture not having high importance in transition countries
like South Africa or economies based on mining industries such as Angola, to high
economic dependence on agriculture in poorer countries.
Food crops like maize, wheat, rice, beans, roots and tubers are produced for subsistence
and for domestic and export markets to meet the steadily growing food demand for
the (low-income) urban population in poor Sub-Saharan countries. Traditional export
commodities (sugar, coffee, tea, cotton) also maintain a crucial importance for
Southern African (rural) incomes, and as such for economic activity.
Moreover, an important potential in agri-business is lying in diversification from
traditional export crops to ‘new’ higher value crops, especially in the horticulture
sub-sector. As vegetables and flowers are normally air-freighted to export markets,
the landlocked countries do have a comparative advantage in horticulture production.
Currently, in the SADC region, a wide range of countries produce bananas and citrus
fruits. South Africa is one of the few commercial producers of fruits like grapes
and avocado, but production of these and other ‘new’ types of fruits (lychees, mango,
pineapple) can be introduced in other SADC countries.
Next to horticulture produce, oilseeds and nuts are identified as new export crops,
and in some countries are promoted by government or NGO’s. Most of the energy crops
(palm, coconut, jatropha, sugar cane, sweet sorghum and cassava) are widely grown
in the SADC region, suggesting that the region has a high potential to produce biofuels.
Within the SADC region, many countries traditionally produce cattle, and beef production
in the region has almost doubled between 1961 and 2004. In recent years, poultry
meat production in the SADC region has gained importance and exhibits a steady overall
growth trend, especially in countries like South Africa, Zambia, Zimbabwe, Mozambique
and Malawi.
Marine fisheries play an important role in the seven SADC countries having access
to a marine water area, and include a wide range of fish, shellfish and seaweed.
Tanzania, Malawi and Lesotho have freshwater (inland) fisheries resources and/or
have potential for inland aquaculture/fish farming.
Agro-processing is one of the most significant manufacturing activities in Africa.
In fact, the agri-business activity, of which food processing represents a large
share, accounts for approximately one-fifth of the regions GDP and just under half
of the region’s value-added in manufacturing and services. Although the presence
of trade barriers and quality requirements are obstacles that hamper the countries’
efforts to encourage domestic processing, the importance of agro-processing is rapidly
increasing. Next to large food companies that traditionally have had a strong presence,
South African firms in particular have expanded into the region. Given the importance
of the size of the local and/or regional market in the SADC trade community, domestic
value-adding by local or regional SADC companies is considered as having high potential
for development.
Since most SADC economies are pre-dominantly agricultural based and food dominates
agricultural trade among SADC countries, enhanced trade in value-added agricultural
products potentially provides a tool for fighting poverty in the region, promoting
regional integration, and increasing economic growth and welfare. |
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