The African Development Bank (AfDB) says agricultural and industrialisation are the key areas for the East African Community (EAC) development.
Yes! The development lender backs its predication on the fact that the region’s between 75 percent and 90 percent of its population depends on agricultural activities.
The argument based on the fact that if agriculture sector is well developed and linked with industrialisation drive, then, it will free the majority of the population from leaving below one dollar a day.
One fact, according to AfDB, is that the value of Africa’s food market is expected to be more than triple in value by 2030 to 1.0 trillion US dollars annually.
The bank says that efficient agricultural production means lower costs of food which, in some households, can be as high as 70 percent of the budgets.
Increasing productivity and lowering the cost of food, therefore, means households will spend less of their incomes on food, which releases funds for other essentials such as health and education.
Similarly, high productivity of cheap raw agricultural materials can also support the agro-processing industry.
Cheap, high quality and consistent raw materials can only be acquired through a modernised agricultural system by freeing excess labour from agriculture and transferring it to the manufacturing sector.
However, modernising the sector needs huge support from the authorities, and it should start by educating the farmers on the best practice, and putting the right policies in place and arranging for their markets. For instance, with the exception of Burundi and South Sudan, the rest of the member states have stock markets and are cooperating.
The exchange facilitates business to thrive and a good platform to secure working capital through IPOs or issuance of corporate bonds. But on other hand there is no a single commodity exchange in the region. Yes, in Tanzania and Kenya, both have coffee and tea auctions, but not an exchange for various commodities. The Tanzania Mercantile Exchange (TMX) is yet to officially open its door.
Such commodities are for the pro poor and face abusive prices from farmers, who are getting dictated prices from middlemen, and hence, a good starting point for farmers to realize their potentials is necessary.
They will also increase the region agriculture cooperation.
This means that the AfDB advice on agriculture and industrialisation to the EAC secretariat should be taken in totality, since it will eliminate hunger in the region amid enhance economic growth at all fronts.