SOUTHERN Africa’s economies stand to benefit immensely if member states collaborate to develop vibrant agro-allied industries and enhance regional value chains particularly in the agriculture sector, a report has shown.
The agriculture sector features prominently in the SADC regional economy, contributing between four and 27% of Gross Domestic Product (GDP) in different member states, according to the Regional Agricultural Policy document. For this reason, enhancing agriculture growth and food security is seen as a critical component of the region’s efforts to alleviate poverty.
A high-level Southern African Regional Stakeholder Forum held in Lilongwe, Malawi, recently deliberated on the need to bolster agricultural production and harness various economic opportunities it presents.
Focused on the private sector role in accelerating regional integration and growing opportunities for investment and growth, the forum noted in its outcome statement issued last week, the need for the private sector to be more engaging and drive the regional integration process with its attendant benefits and creating better opportunities for investments, profits, and growth across economic sectors.
There was consensus that agriculture holds the keys to desired growth levels.
“Being largely agrarian societies with most of the region’s citizens still engaged in the agriculture sector, the development of the agro-allied industry, enhancement of agricultural productivity, and regional value chains in agriculture must be promoted in Southern Africa,” reads part of the recommendations.
About 70% of the population is said to depend on agriculture for food, income and employment. Agriculture is also a major source of exports in several countries, contributing on average about 13% to total export earnings and about 66% to the value of intra-regional trade.
“Governments should put in place mechanisms that encourage foreign direct investments to create linkages with local MSMEs, including in the agricultural sector, with a view of creating backward and forward linkages, capacity building, and job creation,” reads the report.
In view of these considerations, the gathering agreed that the performance of agriculture has a strong influence on the rate of economic growth, the level of employment, demand for other goods, economic stability, food security and overall poverty eradication.
Most SADC states are increasingly aware that in recent decades food production, donor aid flows, government budgetary allocations to agriculture and rural development have declined while food imports, food aid, and population have substantially increased, posing serious threats to domestic economies.
Experts strongly believe the private sector can be the driver and major beneficiary of the regional integration process in Southern Africa through increased opportunities for investments.
While acknowledging progress made at the regional and continental levels in creating frameworks, policies and strategies to promote regional integration, industrialisation, regional value chains, the gathering noted that issues of domestication, implementation and monitoring progress remain largely outstanding.
Governments have since been called upon to speedily domesticate regional agreements, protocols and strategies related to regional trade and investment in order for the private sector to take advantage of economic benefits of regional economic integration.
They stressed the need for improved private sector involvement in the design and policy making processes on regional integration and trade negotiations.
“The private sector should be involved in the design, formulation, implementation, and monitoring of regional protocols, strategies and programmes on industrialization, regional value chains, cross-border trade, private sector development and issues of trade negotiation,” the report recommends.
Governments have also been called to develop long-term term frameworks regarding costs and benefits of regional and continental agreements and protocols, rather than focusing on short term revenue gains. Further interventions are required in ensuring ensure greater efficiency and smoothness of border posts’ services in the region for easy and timely passage of trucks and other economic related movements.
“This should include speedy clearance of goods through the use of technology, ensuring uniformity of rules between countries, providing adequately skilled human resources, as well as facilitating cross-border movement of persons,” it said.
The gathering also noted that the informal sector continues to operate on the fringes despite their contribution and potential. As such participants recommended increased stakeholder support for the informal cross border traders, particularly women traders in building their capacities in terms of understanding of policies, protocols and procedures regarding cross border trade, access to information on their rights, and access to facilities such storage, finance and general services.
Facilitating greater information sharing and policy exchange dialogues between the private sector and other key stakeholders including governments, regional economic blocs and development partners was seen as a key intervention.
In view of the growing desire for empowerment and indigenisation of economies, the forum advised governments to implement indigenisation policies with due consideration to effective strategic planning, issues of quality, standard and productivity.
“Indigenisation policies should not be haphazard, impulsive, and promote inefficiency, cronyism and mediocrity,” reads the report. It further noted that stakeholders, both public and private, should help build the capacities of business associations, assist them to get better organised and entrench institutional mechanisms to having their voice heard on national and regional issues. Participants expressed concern over the low level of public-private partnerships (PPPs), which they said were under threat each time there is a change of government in a country.
“For PPPs to be sustainable, consultations with private sector, communities affected by PPPs, and other stakeholders need to be conducted; furthermore, such consultations will enhance accountability of, and improve, PPP arrangements,” they said. The role of the Diaspora also came under focus with the forum stressing the need to harness investment from this segment of the population through partnerships with local businesses. Recommended initiatives include promoting business tours and linkages with the private sector in the region and the continent.
The Southern Africa Regional Integration Stakeholder Forum was co-organised by the United Nations Economic Commission for Africa, Southern Africa Office (UNECA-SA), the African Union Southern Africa Regional Office (AU-SARO) and the Africa Business Group (ABG) under the theme “The Private Sector and Regional Integration in Southern Africa: Accelerating Opportunities for Investments and Growth”.
It attracted CEOs and captains of industry and the financial sector in the region and beyond, Chambers of Commerce and Industry, senior government officials, RECs, the African Union, UNECA, multilateral institutions and development agencies, civil society organisations and other key stakeholders including the Diaspora.