According to McKinsey & Company’s latest report released in June, the five individual member states of the East African Community will lose more than $5 billion (roughly Rwf4.7 trillion) from agricultural exports, this year due to the coronavirus pandemic.
“Africa’s exports of food and agricultural products are worth an estimated $35 billion to $40 billion a year, and some $8 billion a year flows through intra-regional trade in these products,” the report reads in part.
However, as a result of the coronavirus crisis, there is already reduced food demand, disruption of trade in export crops even within regions, and severe crop production and processing shocks.
The supply disruptions could result in a severe economic blow for countries such as Kenya, Tanzania, and Uganda which rely on agricultural exports as a primary or secondary source of export earnings.
Additionally, the report, Safeguarding Africa’s Food Systems Through and Beyond the Crisis revealed that “Africa’s food and agricultural imports amount to between $45 billion and $50 billion a year along with $6 billion a year in imports of agricultural inputs and if measures are not checked, we are likely to lose the foreign earnings from agricultural products.”
The report noted that the disruption follows various coronavirus containment measures including the suspension of flights and ultimate reduction of about 75 per cent in available cargo capacity and a twofold increase in cargo costs among others.
Statistically, around 80 per cent of agriculture exports from Africa are to four regions; Western Europe (around 45 per cent), South and East Asia (20 per cent), the Middle East (10 per cent), and North America (five per cent) and all the markets were inaccessible due to lockdowns and suspended flights.
On the other hand, the report warned of food price volatility and nutritional problems due to lack of adequate nutritional foods as a result of increased food insecurity due to affordability of agricultural inputs, and depreciating currencies.
In Rwanda, the Economic Recovery Plan Blueprint noted that since the Covid-19 outbreak, the weekly volume of exports had dropped to 30-34 MT but was optimistic that it would pick up in coming days.
However, among the ongoing interventions is working with the national carrier, RwandAir to deliver goods to some markets in Europe which have allowed producers to maintain delivery of fresh produce to a number of markets in Europe.
The report suggests that safeguarding food security through understanding and managing the forces that shape demand, and ensuring agricultural production is sustained. Adding that “It will also be important to maintain trade flows, and keeping borders open for trade as far as possible”
To resume normalcy of horticulture export, the volumes of weekly exports will have to rise from a current export capacity of 30-35 Metric tonnes to between 80-100 Metric tonnes as was the case prior to the Covid-19 pandemic.
NAEB is working with exporters to consolidate demand in markets served to ensure that there are volumes available to respond to demand.
This has ensured that producers and exports are in a position to respond to demands collectivity as opposed to individual efforts which can be challenging for operations.
Other interventions including input support such as subsidization for products such as fertilizers to ensure that farmers can be able to maintain productivity to respond to demand in global markets. The support also includes training on best farming practices to improved productivity and compliance with global market standards.
The agency will also rollout marketing and promoting local produce globally for market linkage as well as work with producers to facilitate compliance and certification.
The intervention is also in the form of facilitation of Business to Business linkages to for exporters to interact with buyers in global markets improving chances of further cooperation and opening new markets.