The African Development Bank (AfDB) says agriculture and industrialization are the key areas for development for the East African Community (EAC).
Yes! The development lender backs its prediction by the fact that between 75 and 90 percent of the region’s population depends on agricultural activities.
The argument based on the fact that if the agricultural sector is well developed and linked with the drive for industrialization, then it will free the majority of the population from leaving less than a dollar a day.
One fact, according to AfDB, is that the value of Africa’s food market is expected to more than triple by 2030 to US$1 trillion a year.
The bank says that efficient agricultural production means lower food costs that, in some households, can reach 70 percent of budgets.
Therefore, increasing productivity and lowering the cost of food means that households will spend less of their income on food, which frees up funds for other essentials such as health and education.
Similarly, the high productivity of cheap agricultural raw materials can also support the agricultural processing industry.
Cheap, high-quality and consistent raw materials can only be procured through a modernized agricultural system by freeing excess labor from agriculture and transferring it to the manufacturing sector.
However, the modernization of the sector needs strong support from the authorities, and it must start by educating farmers on best practices, implementing the right policies and organizing their markets. For example, with the exception of Burundi and South Sudan, the rest of the member states have stock markets and are cooperating.
The exchange makes it easy for businesses to prosper and is a good platform to secure working capital through IPOs or corporate bond issuance. But, on the other hand, there is no single commodity exchange in the region. Yes, in Tanzania and Kenya both have coffee and tea auctions, but not a multi-commodity exchange. The Tanzania Mercantile Exchange (TMX) has yet to officially open its doors.
Such commodities are for the pro-poor and face abusive prices from farmers, who receive prices dictated by intermediaries, and therefore a good starting point is needed for farmers to realize their potential.
They will also increase agricultural cooperation in the region.
This means that the AfDB’s advice on agriculture and industrialization to the EAC secretariat must be taken in its entirety, as it will eliminate hunger in the region amid further economic growth on all fronts.
