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What’s the Scoop on Sub-Saharan Africa?
Dallas Smith, former
USDA Deputy Under Secretary for Farm and Foreign Agricultural
Services, worked extensively with African countries to expand
two-way trade and agribusiness development.
Last October, Mr. Smith gave the keynote address at the Africa 98 conference in Scottsdale, Ariz. At the meeting–held to promote business, trade and investment opportunities in Africa–he discussed how important the development of this market is for the United States.
AgExporter: Why should the United States be interested in Africa’s economic development?
Smith: Without question, the United States has a significant economic stake in Africa. Looking at agricultural trade alone, while total U.S. agricultural exports worldwide amounted to approximately $57 billion in 1997, U.S. exports to Africa--including North Africa and Egypt--totaled over $2.3 billion.
If you compare numbers, the figures show that we already have significant markets in Africa. Our $2.3 billion in sales there were larger than U.S. agricultural exports to Central America, South Asia and Eastern Europe combined in 1997. In fact, U.S. agricultural exports to Africa were almost as large as the $2.6 billion we exported to South America.
If these African countries prosper, they will obviously have more money to buy our agricultural products.
AgExporter: But investment money’s often tight. Where can we get the most for our dollars?
Smith: Sub-Saharan countries lead the market for future growth potential, so it makes good sense to start there. U.S. agricultural exports to the region amounted to $706 million in 1997. Our major customers in Sub-Saharan Africa were South Africa, Nigeria and Ghana.
AgExporter: What products are our big sellers now?
Smith: More than three-quarters of total U.S. agricultural exports to Sub-Saharan Africa are grains and feeds. Wheat accounted for over 57 percent of total grains and feeds exported in 1997, followed by milled rice, feed grains and products and corn.
Poultry and poultry products are the second largest. Exports of poultry and poultry products amounted to $24 million in 1997, followed by fats, oils, greases and tallow.
Other U.S. exports that have demonstrated considerable growth recently include fresh vegetables, vegetable oils and soybean meal.
AgExporter: Do I need to worry about unstable governments?
Smith: Not as much as before. Newfound political stability and economic reforms, combined with investments in people and agricultural technology, are factors that have improved economic growth in many parts of Africa.
At least 15 African countries enjoyed more than 5-percent growth in their gross domestic product (GDP) in 1995; another four reached over 10 percent.
AgExporter: What’s the outlook for consumer-oriented products?
Smith: Growing urbanization and non-farm employment are changing consumption patterns in many of the Sub-Saharan African countries. The region’s urban population is growing at an average rate of 4.9 percent annually, almost twice as fast as the population as a whole.
This explains the rise in demand for consumer-ready products such as dairy products, snack foods, breakfast foods and beverages, especially among middle-income segments of the population.
While France and the United Kingdom have traditionally kept a tight grip on the consumer-ready foods market in many Sub-Saharan African countries, this trend is changing now that consumers are becoming acquainted with U.S. products.
AgExporter: Is the trade reciprocal?
Smith: Absolutely. The United States is an important market for Africa’s products. Agricultural imports from all of Africa reached just over $1 billion last year. The Sub-Saharan region exported a record $830 million to the United States during that time.
These products came mostly from Côte d’Ivoire, South Africa, Malawi, Ethiopia and Kenya. I was pleased to spot a recent market analysis showing that the potential to expand two-way agricultural trade is tremendous.
AgExporter: How can the United States promote more trade?
Smith: The United States must devise a long-term market access strategy with nontraditional markets in developing countries.
A long-term, aggressive strategy targeting customers with the greatest growth potential not only would be in the interests of our own producers, but would promote the economic growth of the customers as well.
What better place to start than Africa? After all, several African countries have growth rates that are equal to or exceed those of many Asian countries.
Given the economic importance of agriculture in the region, a growing, vibrant agribusiness sector within the nations of Africa–and growing agribusiness linkages with the United States and the rest of the world–can play an important role in Africa’s continuing transformation. It can augment prosperity and support business development through other sectors of the economy.
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