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Opinion: AfCFTA for agricultural development – The responsibilities of SMEs

On March 2019, the Government of Guinea donated 5 000 chicken eggs and pigs from Mali and Ivory Coast to the farmers of Ghekedu, a county in the south of the borderline between Sierra Leone and Liberia.

According to the authorities, Guinean hens lay fewer eggs, about 50 units per year, than those from Mali, which lay 160 units per year. In this regard, the Guinean authorities announced, attempting to “reduce the importation of chickens or any kind of meat that put a heavy strain on the trade balance. We import up to 34,000 tons of chicken per year to meet local demand “.

This is an example of how it is still difficulty for African Business Community to benefit from regional economic integration. Because of the system, the lack of funding, ongoing disparities, discontinuities between countries, cities and rural areas, result in terms of organic and business networking growth.

Many local entrepreneurs, native or foreigner, invest most of the time in capital cities rather than in nationally or near agricultural zone. That expresses a “laziness” that evidently contributes to undermine economic drives.  A “laziness” and a barely concealed desire to minimise risks, to acquire fast and easy profits, even if they will be facing high costs.

When will African entrepreneurs realise that the West African market includes 350 million people, and 628 billion dollars of GDP in the whole ECOWAS area?

Facing this market with such an absurd approach is non-sense, just as food in Northern Nigeria costs 200 times more than in New York, meanwhile in Ghana just spent US$37 million dollars between January and June 2016 importing poultry, significantly affecting the value of their currency to alarming levels.

Although it is true that the purchasing power is very weak, unemployment rate is very high, and the average salaries estimated at 100 dollars a month. However this avalanche of programs and investments for agricultural supply chains must also take into consideration socio-economic aspect, strengthening agricultural SMEs, enhancing their organization and profitability.

It is precisely the strategy adopted by local companies that will gradually affect the socio-economic trends, through the creation / development of employment, new wealth and market niches, filling deficits, gaps, improving the quality and price ratio, and access to products from a wider market target.

The consequences of such lax behaviour on this issue is a paradoxical situation in which the local agricultural entrepreneur is in charge, but can’t stand up to the foreign competition of overseas colleagues, better advised in his own territory. While still facing the problem of economic inequality and the choices of the average consumer, the responsibility lies with the local entrepreneur, since he is all in all in a much more advantageous position, especially with regard to taxation, with natural resources and human capital at his disposal at a low price. The target market that he often snobs of is the one that constitutes the greatest interest to overseas producers, especially Chinese. Strengthening its ability to face ruthless competition means finding the best way to re-evaluate, value and better respond to the needs of the population in terms of nutrition, regardless of social class or place of residence.

In fact, the shortage of food for certain households is due both to the lack of a link between production and distribution circuits, and to the high prices resulting from speculation, which doesn’t take into consideration operating expenses. There is a real problem in defining business and commercial strategies in the agricultural sector.

It is hoped that the “Tableau de bord de la responsabilité des Leaders africains pour la nutrition” (African Leaders for Nutrition -ALN), presented at the summit of the African Union, during a meeting entitled “Appeal for a reinforced responsibility for investment in nutrition”, led by King Letsie III of Lesotho, and Akinwumi Adesina, president of the African Development Bank, has taken these various technical aspects into consideration.

And who better than the entrepreneurial initiative to take on this role, adopting more incisive and profitable strategies, perhaps moving away from the comforts or illusions offered by the big cities, and improving the micro / macro economic framework.

Otherwise all these data on GDP growth, or numerous loans, financing for the agricultural sector, rather than ending the problem of malnutrition and developing the sector, will do nothing but constitute a speculative bubble on the stock exchange markets, aggravate the indebtedness of states already debilitate, retrograde performance, and finally, diminish any prospects of future generations.

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