by Wandile Sihlobo | Feb 3, 2020 | Africa Focus
Nobel laureate, Paul Krugman, has popularized the term “zombie idea”, which is also a title of his new book – Arguing with Zombies. This term refers to “ideas that keep being killed by evidence, but nonetheless shamble relentlessly forward, essentially because they suit a political agenda”.
One such “zombie idea” in African agriculture is the view that Zimbabwe was a breadbasket of the continent. I keep hearing this from various corners (and here from the late President Robert Mugabe) although evidence shows Zimbabwe was never a breadbasket.
Fellow agricultural economist Sifiso Ntombela and I found in an Africa Check essay in 2017, aimed at assessing whether Zimbabwe was ever a bread basket for Africa that it was not. What we did find, however, was that Zimbabwe had been a self-sufficient food producer until its land reform programme was instituted.
In our view, a country should be able to meet its staple food consumption needs and simultaneously command a notable share in exports of the same food commodity to be considered a “bread basket”.
An examination of the production data from the UN’s Food and Agriculture Organization of key staple foods — maize and wheat — shows that Zimbabwe’s production of these commodities never surpassed a 10% contribution to Africa’s production over the past 55 years.
In the two decades prior to Mugabe’s leadership (1960–80), Zimbabwe provided an average share of 6% of Africa’s maize production — almost on par with Nigeria but lower than Kenya’s contribution of 7%. During that period, the country’s maize production outpaced consumption by an average 400,000 tonnes a year, making it a net exporter.
During the first half of Mugabe’s rule (1980-2000), the country’s maize production contributed a share of 5% to Africa’s output. While it was a net importer in most years, on average the country remained a net exporter of maize, with a declining maize trade balance. This decline, and the country’s trade balance, worsened following the introduction of Zimbabwe’s fast-track land reform programme in 2001.
The country’s share of maize production on the continent then dwindled to an average of 2%. During this period, its maize consumption outpaced production by an average of 550,000 tonnes per annum — turning it into a net importer. The trend is similar for wheat and other major grain commodities as a contribution to Africa’s food system.
Fails to fit the idea of food-basket
The available data, which covers three distinct phases in Zimbabwe’s agricultural sector, suggests that the country was self-sufficient before and in the two decades after Mugabe came to power. Even then, Zimbabwe’s maize and wheat output were generally modest and volatile. It wasn’t sufficient to support strong exports to the rest of the continent and world – which fails to fit the idea of a food-basket.
In the third phase, the country’s maize and wheat production significantly declined, which further weakened Zimbabwe’s standing in the continent’s food system.
Overall, we view Zimbabwe as a self-sufficient food producer prior to its fast-track land reform programme. However, there is limited evidence to support the notion of Zimbabwe having ever been “the breadbasket of Africa”.
This is an extract from an essay written for Africa Check, first published on 28 November 2017 here.
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by Wandile Sihlobo | Feb 3, 2020 | Africa Focus
On the 14th of August 2019, Nigeria announced that there would be restrictions on food and agricultural imports in the country. President Buhari took to Twitter to explain his rationale behind this step (see here). In summary, President Buhari wants to improve Nigeria’s agricultural production. His theory is that “restricting food imports, in the face of solid domestic demand will be a catalyst for domestic production”.
This was a bold move considering Nigeria being a notable importer of agricultural and food products. Over the past five years, Nigeria’s agricultural and food imports averaged US$4.7 billion, as shown in Exhibit 1 below. The products on top of the imports list are wheat, sugar, milk, palm oil, sauces and seasonings, bottled water, apples, pears, maize and vegetables oil.
Exhibit 1: Nigeria’s agricultural trade
Source: ITC, Agbiz Research
There is a potential to reduce the imports of some of these products, but this won’t be an overnight event like the Nigerian government had hoped. This will take years of investment in agricultural production and value chain, something that seems to be lacking as far as I can tell.
So, introducing a ban on imports of food might have been an oversight, perhaps the Nigerian government should have introduced import quotas and adjusted them along with improvement in production (to be clear, this is not something I particularly desire, but it could have worked for achieving the government goal).
Nevertheless, the negative impacts of the drastic policy of restricting food imports have now come to light. Bloomberg, a news organization, reports that staple foods’ prices, such as Jollof rice, have increased by 70% since the introduction of this policy in August 2019. What’s more, Nigeria’s overall food price inflation accelerated to a 20-month high in December 2019, reaching 14.7% y/y.
Nigerian farmers might be happy with these measures and adjusting production somewhat – something that government aims for. But this is coming at a heavy cost to Nigerian consumers.
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by Wandile Sihlobo | Feb 2, 2020 | Africa Focus
Zimbabwe has always maintained a vague policy view on genetically modified crops (GM). In seasons of abundance, the country would place a ban on importation of GM crops, which would mean that South Africa, the only GM crop producer in Africa where roughly 80% of the maize is GM, wouldn’t be in a position to export maize to Zimbabwe.
In times of scarcity, however, one would see maize leaving South African silos into Zimbabwe without a clear view on the GM policy (it is possible that some exports were non-GM maize). The general view was that when the maize lands in Zimbabwe, it would be carefully quarantined and transported straight to the millers to be processed into maize meal
But the most notable shift from this vague policy happened recently. Bloomberg, a news organization, reports that;
“Zimbabwe has quietly lifted a ban on imports of genetically modified corn for the first time in 12 years as the southern African nation begins to take action to avert what could be its worst famine.”
This will help ease import processes of maize from South Africa, and other major maize producers, into Zimbabwe. As I’ve recently noted, in the week of January 24, 2020, South Africa had thus far exported 79 283 tonnes of maize to Zimbabwe within the 2019/20 marketing year.
The need for maize imports in Zimbabwe was caused by a poor domestic harvest, which fell by 53% year-on-year in 2018/19 production season to 800 000 tonnes, according to data from the U.S. Department of Agriculture. Zimbabwe consumes about 1.8 – 2.0 million tonnes of maize a year, so this fall in production meant that the country would need to import at least a million tonnes of maize to cover the shortfall.
The import activity didn’t accelerate until earlier this year, at least from a South African market. There were small imports from Tanzania last year but that didn’t make a dent as witnessed from incidences of food shortages in the country. A more detailed view of this matter is here.
Additional reading:
Also, I’ve discussed the benefits of growing GM crops here. This is something that Zimbabwean authorities should think about if they are to transform the country’s agricultural sector in the coming years. The Economist magazine also recently ran a detailed piece on this matter here.
This chart of maize yields also paints a much clearer picture of the yield benefits of GM crops. Here is South Africa compared to the Sub-Saharan region.
Exhibit 1: The South African maize yields have largely benefited from the use of GM seeds.
Source: BMI
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by Wandile Sihlobo | Jan 31, 2020 | Africa Focus
If there is one thing that stood out for me in the South African agricultural markets yesterday, it was the reports of maize exports to Zimbabwe. In the week of 24th of January 2020, South Africa exported 16 210 tonnes of maize to Zimbabwe. This may not seem like a big volume; however, it was noticeable as it is South Africa’s largest weekly maize export sales to Zimbabwe since December 2013.
What’s more, Zimbabwe has shown a greater interest in South African maize this year thus far, as illustrated in Exhibit 1 below. Here we present South Africa’s weekly maize exports to Zimbabwe (we’ve combined both white and yellow maize, but the majority is white maize for human consumption).
Exhibit 1: South Africa’s weekly maize exports to Zimbabwe
Source: SAGIS
If you are a regular reader of this blog, you are probably aware of why Zimbabwe is suddenly a centre of attention regarding maize imports. For those who have not been following the story, the need for maize imports in Zimbabwe, according to data from the U.S. Department of Agriculture, was mainly caused by a poor domestic harvest which had fallen by 53% year-on-year in 2018/19 production season to 800 000 tonnes. Zimbabwe consumes around 1.8 – 2.0 million tonnes of maize a year, so this fall in production meant that the country would need to import at least a million tonnes of maize to cover the shortfall.
The import activity did not accelerate until earlier this year, at least from a South African market. There were small imports from Tanzania last year but that didn’t make a dent as evidenced from incidences of food shortages in the country.
On January 3, 2020, Zimbabwean President, Emmerson Mnangagwa, told Bloomberg that his country will import maize Mexico, Ukraine and South Africa to help ease pressure in the country. But there were no details on whether this was the maize that would be supplied by organizations such as the World Food Programme or private businesses, or the government agency, Grain Marketing Board.
Mexico had about 1.5 million tonnes of maize for export markets in the 2019/20, according to data from the U.S. Department of agriculture. Meanwhile, in the same season, South Africa had about 1.2 million tonnes, according to our estimates. The U.S. Department of Agriculture estimated that Ukraine had the largest volume of about 25 million tonnes of maize for the export market in the 2019/20 season.
It is unclear how much maize Mexico and Ukraine have exported thus far within their 2019/20 allocations. In the week of 24th of January 2020, South Africa had already exported to the global market 73% of the allocated maize for exports in the 2019/20 season which ends in April 2020. Zimbabwe was one of the smallest buyers, having imported only 79 283 tonnes of maize from South Africa between May 2019 and January 2020, as previously stated.
This means that South Africa and possibly Mexico have now relatively tighter stocks compared to mid-year 2019 when it became clear that Zimbabwe would need to import a large volume of maize. Had the sales been facilitated then, Zimbabwe would have found abundant maize supplies in the market. The coming weeks will be interesting to watch where Zimbabwe sources its maize, and at what price.
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by Wandile Sihlobo | Jan 28, 2020 | Africa Focus
We rarely talk about Africa’s wheat production due to its size relative to other regions of the world. Africa produces only 3% of the world’s wheat, compared to the European Union region which produces 20% of the world’s wheat and Back Sea region which produces 17%. These low levels of wheat production in the continent are partly the result of unfavourable climatic conditions in most countries.
The 2019/20 wheat production conditions are hard to ignore, albeit the continent having lower production levels. Africa has experienced an increase in wheat production for two consecutive seasons, however, the wheat production could fall by 10% y/y in the 2019/20 season which would result in 26 million tonnes being produced.
The countries underpinning this expected decline in harvest are South Africa, Libya and Morocco. In all these countries the crop has been impacted by drier weather conditions during the crop growth stages which, in turn, weighed on yields potential.
Fortunately, other regions of the world had fairly good seasons and therefore boosted global wheat production. The International Grains Council forecasts the 2019/20 global wheat harvest at 761 million tonnes, up by 3% y/y. This has also kept global prices at softer levels. In the week of January 24, 2020, global wheat prices were down 3% y/y, trading around US$236 per tonne.
African consumers will subsequently be able to source wheat supplies from other parts of the world to fulfil the current shortfall, thereby increasing the amount of wheat the continent imports in the 2019/20 season by possibly 4% y/y to 51 million tonnes. The leading importers will be Algeria, Egypt, Libya, Morocco, Tunisia, Ethiopia, Kenya, Nigeria, South Africa and Sudan.
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by Wandile Sihlobo | Jan 27, 2020 | Africa Focus
If you read the international news on Africa this past weekend, you probably noticed that Time magazine (here), The Guardian (here), New York Post (here), The Japan Times (here), and the Financial Times (here) ran a similar story about the worst swarms of locusts currently spreading in Kenya.
The estimates suggest that 70 000 hectares of land in Kenya has thus far been invested by these locusts, and thus threatening the agriculture sector. The Kenyan authorities seem to be struggling to control the spread of these locusts, which means it could spread to a number of regions in the coming weeks.
The Food and Agricultural Organization of the United Nations (FAO) has also warned about the potential threat these locusts pose to Kenya’s food system (see here). The FAO has called on the international donor community to assist, acknowledging that the local authorities are not moving at speed required and also not endowed with resources needed to curtail this impending crisis.
I use the word “crisis” intentionally. Kenya’s food system is already fragile. The country experienced drought in 2019 which saw its maize harvest falling 15% y/y to 3.4 million tonnes. Kenya utilizes about 4.7 million tonnes of maize a year, according to data from the United States Department of Agriculture. Therefore, the decline in domestic maize production saw the country needing maize imports of 1.3 million tonnes in a marketing year that ends in April 2020 in order to meet its annual needs. I don’t know how much they have managed to import thus far, as the 2019/20 marketing year will only end in three months’ time from now.
I was hopeful that 2020 could be a recovery year and Kenya’s maize import needs could be reduced. The spreading desert locust swarms locusts, however, threaten to bring the country back to food shortage challenges. Also, worth noting is that Kenya is not alone in this challenge. Ethiopia and Somalia are also at risk. This is a bad time for East Africa’s agriculture.
The effective way to control the spread of these locusts will be aerial spraying of pesticides. But that needs money, about US$70 million, according to the FAO estimates. I imagine the small-scale Kenyan farmers might not be able to cover such costs. Hence, the government and international donors will have to assist the affected communities.
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by Wandile Sihlobo | Jan 11, 2020 | Africa Focus
Note: I’ve recently opened a YouTube channel, which I hope to use frequently in 2020. Click here for a short clip summarizing the essay below.
Last year I applauded the Zimbabwean government for having grasped the urgency of potential maize shortage in time and outlining a plan to address it. This is after Joseph Gondo, chief director of Zimbabwe’s agriculture ministry, told Bloomberg on June 6, 2019, that the country’s Grain Marketing Board, a state-owned agency, would float an international tender to import 750 000 tonnes of maize.
While this was set to be the largest maize import volume since 2016/17 season, it was somewhat less than what I thought the country needed to import in order to fulfil the shortage in the 2019/20 marketing year – a million tonnes. Nonetheless, I was encouraged by the proactiveness of the government.
The need for maize imports was caused by a poor domestic harvest, which fell by 53% year-on-year in 2018/19 production season to 800 000 tonnes, according to data from the U.S. Department of Agriculture.
The dearth of credible statistics of maize trade in Zimbabwe made it difficult for one to follow the planned import activity. But the news of food shortages in a country that has dominated headlines over the past few weeks show that the Grain Marketing Board didn’t really import the 750 000 tonnes that were planned on June 6, 2019. Had it been imported; Zimbabwe wouldn’t have faced maize (and food) shortages by now.
On January 3, 2020, Zimbabwean President, Emmerson Mnangagwa, told Bloomberg that his country will import maize Mexico, Ukraine and South Africa to help ease pressure in the country. But again, there were no details on whether this was the maize that would be supplied by organizations such as the World Food Programme or private businesses, or the government agency, Grain Marketing Board.
Mexico had about 1.5 million tonnes of maize for export markets in the 2019/20, according to data from the U.S. Department of agriculture. Meanwhile, in the same season, South Africa had about 1.1 million tonnes, according to our estimates. The U.S. Department of Agriculture estimated that Ukraine had the largest volume of about 25 million tonnes of maize for the export market in the 2019/20 season.
It is unclear how much maize Mexico and Ukraine have exported thus far within their 2019/20 allocations. In the second week of December 2019, South Africa had already exported 67% of the allocated maize for exports in the 2019/20 season which ends in April 2020. Zimbabwe was one of the smallest buyers, having imported only 32 124 tonnes of maize from South Africa between May and December 2019.
This means that South Africa and possibly Mexico have now relatively tighter stocks compared to mid-year when it became clear that Zimbabwe would need to import a large volume of maize. Had the sales been facilitated then, Zimbabwe would have found abundant maize supplies in the market. The coming weeks will be interesting to watch where Zimbabwe sources its maize, and at what price.
Another likely source is Tanzania, which on September 20, 2019, sent its first consignment of maize to Zimbabwe, about 1 200 tonnes.
What worries me more is that the current struggle of maize shortage in Zimbabwe could be prolonged. The 2019/20 production year crop outlook points to a possibility of another poor harvest because of a second consecutive year of below-normal rainfall. Furthermore, a recent report from the Group on Earth Observations Global Agricultural Monitoring Initiative indicates a high probability of below-normal rainfall in Southern Africa between December 2019 and February 2020. This is a period where maize crop needs higher moisture as it would be at pollination.
As these weather indications appear, it would be better this time around if the Zimbabwean government and the World Food Programme do no only notice and make public statements about the possible dangers of this scenario, but plan ahead. As things stand, it is plausible that the discussion of Zimbabwe’s food shortage could persist until the first quarter of 2021.
Written for and first published on Business Day on 07 January 2020.
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by Wandile Sihlobo | Oct 10, 2019 | Africa Focus
Although the past few months have been a struggle to secure grain supplies for Southern and East Africa, other parts of the world are in better shape and could help offset the shortfall. No indicator spells this out as clearly as the Food and Agricultural Organization of the United Nations’ (FAO) Global Grains Price Index which averaged 158 points in September 2019, down by 4% year-on-year because of large global supplies.
The International Grains Council (IGC) forecasts 2019/20 global grains production at 2.2 billion tonnes, which is 1% higher than the previous season. This is boosted by increased wheat and rice production, which have overshadowed the decline in the maize and soybean harvest.
At the start of the 2019/20 production season, an increase in grain production seemed like a pipe dream because of excessively wet weather conditions and delayed plantings in the US. In addition, when planting finally happened, there were fears of potentially poor yields. While these tough production conditions are what has resulted in a decline in global maize and soybean production, now estimated at 1.1 billion tonnes and 342 million tonnes, down by 3% and 6% from the 2018/19 season, respectively, the magnitude of a decline is not as huge as initially feared.
The improved weather conditions over the past few months and also the use of higher-yielding and short-period growing varieties of seeds are amongst the factors that lessened the impact of late plantings and wet conditions on US maize and soybean producing areas.
Global wheat production, which fell notably in 2018/19 season, recovered by 4% year-on-year to 764 million tonnes in 2019/20 season – the largest harvest ever. There is a notable improvement in production in all the major wheat-producing countries, with the exception of Kazakhstan, whose harvest is set to fall by 18% from the 2018/19 season. This increased wheat supply, and the decline in prices thereafter, drew back some users who had switched to maize in the previous season because of higher prices. The 2019/20 global wheat consumption is now estimated at 757 million tonnes, up by 3% year-on-year, according to data from IGC.
Despite the increase in consumption, global wheat prices are still under pressure, down by 15% year-on-year on 03 October 2019, trading at US$206 per tonne. A more comprehensive picture of the overall global grain price dynamics is illustrated by the aforementioned Global Grains Price Index.
The African continent, as a net importer of wheat, will benefit from the current lower prices. IGC forecasts Africa’s 2019/20 wheat imports at 51 million tonnes, up by 5% from the previous season. The leading importers include Algeria, Egypt, Morocco, Nigeria, Tunisia, Kenya, Ethiopia, Sudan and South Africa.
From a South African perspective, the increase in global wheat production comes at a time when it’s much needed. South Africa’s 2019/20 wheat imports could amount to 1.6 million tonnes, up by 14% from the 2018/19 season (which ended in September 2019) because of the expected poor domestic wheat harvest.
While this is beneficial for South African consumers in the near term, it also means that South African farmers might not be compensated for lower production by an increase in prices.
South Africa is a net importer of wheat, which means prices are already at import parity levels, and its movements there will largely be directed by developments in the global wheat market rather than domestic factors.
Regarding the entire Southern and East Africa region, Kenya, Mozambique and Zimbabwe are the countries that are expected to import notable volumes of grains in the 2019/20 marketing year.
Estimated maize imports for these countries collectively will be at least 2 million tonnes. Imports thus far have largely been from Tanzania and South Africa. There are reports of ships that have left Mexico heading to Mozambique, but at this point, it is unclear how much maize will be there. In addition, wheat imports for the above-mentioned three countries could amount to 3 million tonnes.
The upside is that the grains shortfall in Southern and East Africa occurs in a season where there are generally large global supplies to cushion the countries in need. It will, however, be tough to source white maize imports. Outside of the African continent, Mexico is the only key producer. Meanwhile, wheat will largely be available in the global market.
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