African countries being pushed towards free trade

Posted by AFN Staff Writers on 1st November 2012

A recent World Bank report says that Africa’s farmers can potentially grow enough food to feed the continent and avert future food crises “if countries remove cross-border restrictions on the food trade within the region.” According to The World Bank, the African continent would also generate an extra US$20 billion in yearly earnings if African leaders can agree to dismantle “trade barriers that blunt more regional dynamism.”

According to the World Bank report―Africa Can Help Feed Africa: Removing barriers to regional trade in food staples ― rapid urbanisation will challenge the ability of African farmers to ship their cereals and other foods to consumers when the nearest trade market is just across a national border.  With many African farmers effectively cut off from the high-yield seeds, affordable fertilizers and pesticides to expand their crop production, the continent has turned to foreign imports to meet its growing needs in staple foods.

The World Bank says demand for food in Africa can be expected to double by the year 2020 as people increasingly leave the countryside and shift to the continent’s urban centres. The report says that 19 million people living in West Africa’s Sahel region already face hunger and malnutrition.

“The key challenge for the continent is how to create a competitive environment in which governments embrace credible and stable policies that encourage private investors and businesses to boost food production across the region, so that farmers get the capital, the seeds, and the machinery they need to become more efficient, and families get enough good food at the right price.” said Paul Brenton, the World Bank’s Lead Economist for Africa and principal author of the report.

Australia and the US contribute to African businesses

Australia’s former Foreign Minister Kevin Rudd announced in 2011 that Australia was committed to working with Africa to promote economic growth through investment and trade.

According to information from the Australian Department of Foreign Affairs and Trade, Australia’s trade with African countries has grown steadily over the last decade at an annual average rate of 6.1 per cent. Australia’s total merchandise trade with Africa was valued at $5.8 billion in 2009-10.

Australia has significant and growing mining interests in Africa’s resource sector with Australian companies having an estimated current and prospective investment of more than US$20 billion. Since January 2011, more than 200 Australian resource companies had nearly 600 projects spread across 42 African countries, with much of this in the mining sector.

The views of The World Bank follows news earlier this month from US retailer General Mills, which committed to a non-profit program called “Partners in Food Solutions”. General Mills said that its partnership in the Partners in Food Solutions program will help alleviate hunger by leveraging skills of the many General Mills employee volunteers eager to give back by working on its African projects.

Partners in Food Solutions (PFS) is a program that has an objective of improving African food security by bringing expertise, knowledge and resources to the continent’s food-processing sector. PFS will provide more than $8 million in resources to this endeavour, leveraging nearly $7 million in additional funding from the United States government.