Reimagining a new socio-economic fabric for African informal economies

Lockdowns as a major method for containing COVID-19 has undoubtedly destroyed social fabrics that sustain most low income economies. While governments have tried to soften the pandemic’s blow by providing cushioning allowances and other social safety nets to vulnerable members of society including vendors,  Mukando or Stokvel and other forms of voluntary and savings clubs will no longer be the same. Vendors and other low income earners who live from hand to mouth are wondering how they are going to repay loans they had taken before the pandemic arrived.

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Social safety nets will not be able to cover ordinary people’s coping mechanisms. Where economies were functioning normally, many farmers, traders and other entrepreneurs were busy servicing loans taken from banks and Micro Finance Institutions. What is going to happen?

Importance of careful business profiling

The biggest challenge for policy makers is navigating difficult trade-offs between promoting public health and stimulating socio-economic revival while competing for limited resources. Widespread informality and information asymmetry in most African countries makes it easier for government to mistakenly subside what is in abundance and miss sectors that need critical help.  For instance food distribution remains an unsustainable option when it is better to provide resources to communities so that they can produce their own food in gardens, wetlands and production zones.

Teasing out all these issues requires careful profiling of people, communities and available resources. A biggest headache for countries like Kenya and Zimbabwe where the informal economy employs more than 80% of the population is how this economy can be re-opening during the lockdown and post-COVID19. The importance of careful profiling of economic actors in the informal economy cannot be over-emphasized. The following is how a detailed and meaningful profile will look like for each actor:

Profile element Justification (why it is important)
Personal details  
Name and sex Name is about identity. Who are we dealing with?  In the final analysis, sex reveals the extent to which the informal sector is dominated by women, for instance.
Age This has economic implication for business. What has been the impact of closing businesses on youth in response to COVID-19? What is the impact on the elderly pensioners?  How many young people have become unemployed due to the lockdown?
Marital Status COVID-19 has had a different impact on the married, unemployed single mothers and widows.
Household Size Household size has an influence on the pace at which small enterprises can recover from the pandemic. For most SMEs, more than 90% of the business income is more of a salary for the household.
Level of Education This has a bearing on the introduction of financial literacy and provision of technical skills.  How many graduates and school drop outs are in the informal sector?
Home Address (Location) Where do informal traders and SMEs stay? If staying in Epworth, why do they prefer selling to Mbare? What are the business factors for staying in Epworth and doing business in Mbare? This is a description of the ecosystem.  While policy makers may want to be directed by availability of land and by-laws in allocating work spaces, traders and SMEs know what should be considered in setting up a business.  They know the behavior of their customers and target market.
Mobile Number This is becoming a key unique identifier.
Business Information
Business Name and Location Where is the business operating from?  This assists in mapping and revealing the concentration of SMEs.
Is the premise a. rented from i. private property ii. Council property. owned c. home This will assist in assessing risks. If one is renting at a private property, does the by-laws allow or property owners are just taking advantage of desperate SMEs. In most countries private property owners have become more of tax collectors. What plans can be put in place to bring commodities closer to consumers and de-congest Mbare? How can some premises be combined into industrial parks that accommodate street vendors and those operating from home? If you chase street vendors you are saying where they bought is also illegal.
Year business started This provides landscape in terms of experience as shown by years.  Are SMEs growing? What is dominating in terms of years?  What is the age of the business? How old is the SMEs?  If an SME has been running for 20 years but policy makers still do not recognize it, there is something wrong with government policy not with the SME. One cannot continue to be called informal merely because s/he has not been given works space or there is no supportive legislation. For instance what company registration is needed for brick molding? Youth enterprises should not be called projects but enterprises.
Average monthly sales How much is a SME contributing to the economy? Such information will provide a basis for clustering. It will also lays the foundation for creating a growth path. If someone has been in business for 20 years but sales are going down, it could signal lack of adaptation or existing knowledge has reached a limit.
Number of employees: a. full time b. part time This is a key component of economic growth.  By closing SMEs, how many families have been affected?  Any support required may not just be for the business but enhancing employment creation.  Job losses need to be accounted for as SMEs may not be able to sustain full-time employees post-COVID19.
List of assets and estimated value This shows production capacity and contribution of the SMEs to national economic growth.
Do you have any running loan? If yes state amount and lender? What is going to happen to enterprises that had acquired loans pre-COVID?  Their reputation with financiers is likely to get sour?  If more than 60% had loans, how are they going to be repaid?
What kind of support does your business currently need? Provide details This is critical. Most countries do not have fluid needs assessment management systems for the SMEs sector. In most cases there is an assumption that SMEs need loans when they probably need knowledge and skills.  Some have their own knowledge and should not be locked in five day training courses. Others are always learning from each other and can produce items without having gone to college.
Equipment As technical people, SMEs know what equipment is lacking.  In clustering SMEs, policy should be informed by existing type of equipment or come up with special grants that can enable SMEs to import appropriate equipment. A supply chain for equipment can anchor rural industrialization with no need for every aspiring entrepreneur to visit the capital city for everything.

Clustering as a success factor
The above profile is critical for clustering business according to services and products. The SME sector should work hard to classify commodities towards clustering. Profiling is important for systematic formalization. The informal sector is already in motion and most SMEs in urban centers are now very dynamic. If government policy says passports can be applied online from today, everybody will apply. Likewise, SMEs should be able to take advantage of ICTs by filling in their profiles online and send completed forms digitally without travelling to towns and cities for such simple processes.  / /

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Africa Day should now be more about knowledge than politics

Without belittling the importance of celebrating independence, African countries should now be using 25 May (Africa Day) to take stock of knowledge-based achievements and gaps. If all African countries had created a university education model relevant to their development needs and aspirations, African Day would be ideal for celebrating home-grown science around indigenous food systems. By consuming imported food during special days like African Day, African countries limit the capacity of indigenous food to participate in socio-economic development. Indigenous hotels should lead by example through serving indigenous food as a unique selling proposition for each country.

charles dhewa covid

Recognizing intrinsic knowledge and indigenous science

African leaders should use African Day to reflect on why imported science that continues to control formal education systems in Africa is still failing to produce graduates with relevant skills, knowledge and dispositions for generating solutions. For instance, much of the indigenous food systems are driven by intrinsic knowledge and indigenous science especially in relation to food preparation. Where imported knowledge systems emphasize boiling for 20 – 30 minutes, African food preparation systems and skills are in-born. There is no measurement or scale for putting salt besides tasting.  Unfortunately, African university graduates have not been able to process indigenous science into a knowledge basket that can also be exported. Cooking sadza with mugoti and making hodzeko milk are skills that should be exported as intuitive knowledge worthy studying in higher institutions of learning.

When you ask formally educated Africans why they are not solving simple problems the main answer is lack of money. Yet not everything needs money because there will never be sufficient money for solving problems.  That is why people acquire knowledge so that they do not associate every advancement with money but knowledge. Indigenous science is different from imported science which takes learning as memorization and reproduction of facts, figures and rules. It is not only about using available resources to solve problems but also includes building the capacity of young people to interrogate their attitudes, beliefs and mentalities as part of formulating solutions.

Need to domesticate imported science

If imported science was easy to domesticate, African medical doctors trained through the Western university education system would by now have used their knowledge to develop local drugs combining western science and indigenous science. After spending more than five years studying medicine and thereafter practicing as a medical doctor for more than 10 years, an African medical doctor still cannot generate new knowledge in the form of drugs or new ways of treating diseases. Although some diseases and ailments are contextual, African western trained doctors continue to merely administer medicines and cures developed by other people in the West.

Medical professionals around the world are failing to find cure for COVID-19 because they are using borrowed knowledge developed by a few individuals. By now African doctors should have been able to contextualize imported knowledge and created unique medicines using local herbs. If medical doctors were paid by results, what would be the results of African doctors who continue to use imported science?

After spending 7 years studying veterinary science and practicing as veterinary doctors for decades, African veterinary doctors can only administer imported veterinary products while millions of farmers continue to lose millions of cattle from Therleriosis (January disease), Antrax as well as Foot and Mount Disease (FMD) among others.

As they celebrate Africa Day on 25th May 2020, African leaders should be worried that imported curricula remains a barrier to innovative solutions using local plant materials and indigenous science passed from one generation to the other. The more an African absorbed western education, the more s/he is alienated from local science and indigenous knowledge systems.  / /

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Rediscovering the value of indigenous knowledge through COVID-19

By restricting movement between rural and urban areas, there is no doubt that lockdowns in African countries have weakened domestic trade and social fabrics that sustain most low income economies. Contrary to views from policy makers, African economies are not sustained by international trade but domestic commerce and social capital. COVID19-induced lockdowns have made it difficult for urban dwellers to get bags of Nzungu, Nyimo and Mumhare from parents in rural areas as long distance buses have been stopped from operating. Neither can they taste favorite indigenous fruits like tsvubvu or herbs like Zumbani and others famous for fighting flue which is common in winter.  However, that is where the bad news ends.

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Going back to the roots

Failure to transport perishable commodities to cities is beginning to inspire a new sense of self-reliance among farmers and rural people. So important has become traditional ways of preserving food that most farmers are wondering why they were always rushing to sell their valuable commodities for a song when they can wait and add more value. On the other hand, urban consumers who have previously over-depended on imported food systems to the point of associating mufushwa with poverty are beginning to look for it to fill gaps created by absence of fresh vegetables from rural areas. Those in the fresh meat and fish industries are dusting their knowledge on drying beef into chimukuyu which after all is said to be superior because it does not cause gout. Pre-COVID-19, the promotion of indigenous food was labelled informal food vending – of Mutakura, Mahewu, road runners and Mazondo.

Drawing lessons from COVID-19, if African policy makers had promoted a very strong culture of food preservation, the impact of the pandemic would be softened.  More than 90% of our major staples in Africa are rain-fed which means they are seasonal. The same applies to indigenous vegetables like nyevhe as well as fruits like mawuyu, nyii, tsvubvu and masawu which come in abundance leading communities to suffer economic losses.

Unfortunately policy makers’ notion of preservation is just about storage and warehousing yet food should be warehoused when already preserved. African grandmothers made different kinds of mumhare and mufushwa to last until the next harvest. Sweet potatoes were preserved in pfimbi and ripening of fruits through kupfimbika remains a very common practice today in Zimbabwe, for instance. All that knowledge is now due for assessment and improvement although preservation technology is yet to fully embrace indigenous knowledge systems.

No need for preservatives

A major attraction for indigenously preserved food is that it does not have preservatives which are said to be causing different kinds of cancers that are claiming the lives of many eminent Africans. There is a strong emerging view that if properly done, preserved indigenous food can go through the retail supply chain involving agro-dealers who are an integral part of processed food distribution chain.  Farmers have observed that the growth of the modern food chain like fast foods is not contributing much to the growth of smallholder farmers. Recipes and spices used by fast food outlets are meant to promote producers from source countries. For instance, recipes and spices that go into pizzas and niche restaurants are not produced locally as a way of preserving global supply chain from which fast food chains originate.

Upgrading and simplifying indigenous value addition knowledge

Developing countries have not looked at appropriate technology that can simplify value addition knowledge especially traditional knowledge such as on drying mufushwa and brewing mahewu. Consequently there has not been much preservation and quality improvement of mufushwa and other indigenous foods into ready to eat products for better domestic nutrition and export. At national or regional level there has not been meaningful efforts to add value to traditional knowledge on preservation methods.

There is still overwhelming preference for imported knowledge like canning beef and beans as well as tomato sauce which process requires hitech. Africans who grew up in an agrarian society remember producing their own baobab yoghurt through mixing with cow milk while herding cattle.  It is possible that such indigenous knowledge was poached and commercialized.  Now it is not clear who is coping who in producing yoghurt. Mahewu was brewed using chimera but now some companies are producing mahewu but have kept the original sources of knowledge invisible.

For how long are African food systems going to remain locked in specific areas or regions?

This is another fundamental questions triggered in people’s minds as they grapple with the consequences of COVID – 19 on their food systems. Suddenly they realize how their food systems are still locked in specific rural areas and production zones and why they need to develop supply chains through which different production zones can enrich each other. Another telling observation is that more than 50% of the urban population lack rural knowledge. Little knowledge of what urban people are aware of is obtained through informal markets like Mbare in Harare and many others across African cities. However, Zumbani and Mufandichimuka cannot be found in supermarkets where the majority urban dwellers shop.

A lot of knowledge gaps exist between the young generation and local food systems. By not cultivating such knowledge, Africans are killing future demand for indigenous food. The young only know about pizza and Ice cream but very little about sources of food. In terms of demand it is not about young people knowing the plant but developing taste and appreciating home-grown food and associated advantages. Another mistake being corrected is packaging food in modern measurement like calories, kilograms and alcohol content, among others. “Our own knowledge systems should empower us to desist from expressing our food through medicinal properties because the food end up being associated with diseases or illnesses. We should elevate the nutritional side associated with wellness although we are aware of medicinal properties in the food”, one farmer from Mutoko district of Zimbabwe told eMKambo.

Combination of medicine and nutrition

Farmers added that nutrition and medicinal properties are closely linked in the African sense and knowledge systems. However, many lamented the fact that when food is expressed as medicine through modern science it is taken like a drug although it has preventive elements. On the other hand traditional foods like small grains are mostly promoted from a nutritional perspective while their medicinal angle is not elevated. When food is a combination of nutrition and medicine it is consumed as a package as opposed to imported practices where Vitamin A tablets can be consumed separately.

These are some of the discussions happening between farmers and traders trying to continue trading during and after COVID-19. While the majority of African mass markets may have been closed physically, trading of knowledge and real commodities is continuing underneath as part of economic self-reliance and keeping indigenous food trading vibrant.  / /

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COVID-19 shows symbiotic relationships between formal and informal economies

Among other revelations, COVID-19 has shown the extent to which formal and informal African economies do not work in isolation but are more like Siamese twins. African economies are structured in such a way that there are no distinct supply chains that can be locked down without affecting entire ecosystems. For instance, agriculture is tightly interwoven with the non-food informal sector which consume more than 70% of the food, constituting the key demand side for agricultural commodities.

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Given that less than 10% of the demand for food comes from the formal sector, opening that sector without opening the informal sector does not improve agricultural incomes.  One of the most important decisions in opening economic sector while others remain closed in order to contain the spread of COVID-19 should focus on stimulating the buying power. Suppressed buying power affects smallholder farmers more because there will be few buyers for the commodities, leading to enormous losses. That is why it is important to link the safety net system with food markets so that farmers earn income that will enable them to go back and grow more food.

The power of data and evidence

While mass African markets generate a lot of fluid data about the movement of food, African countries do not have institutions responsible for collecting and interpreting such data to inform policy decisions during pandemics like COVID-19 and other disasters. If such an institution existed it would show how much food is consumed by the transport sector, health sector and other non-food sectors. Careful analysis would reveal the implications of opening up one economic sector while keeping others closed. It would also show how opening the formal sector without opening the informal sector compromises demand because it cripples the buying power of the pro-poor majority, mostly those who depend on the informal sector that apparently drives the economy. Evidence would also show how social safety nets are not the solution on their own unless cash meant for social safety nets is plugged into the food supply chain so that poor people do not spend their little money looking for food.

Technology should be playing a more meaningful role

Most African countries still lack technologies that can help them to collect or process information and data. By now, digital technologies should be producing maps for diseases like Malaria, Cholera, Food and Mouth Disease, Fall Army worm and many other diseases that have made Africa their home. Such maps would provide wider sets of fluid data, demonstrating linkages between disasters or particular diseases with food systems. Unfortunately, African ministries of finance do not set aside specific budgets for gathering such important fluid data which remains fragmented in different government departments, local communities and development organizations.

Technology-driven data and evidence can demonstrate why progressive farmers and traders should be interested in mastering trends that contribute to their growth pathways.  If you are a potato trader, it is not enough to know only about that particular commodity and competitors. Understanding the entire ecosystem is more fundamental because fruits like oranges and Nyii can have an indirect but very serious impact on potatoes. Appreciating the role of data and understanding one’s business performance is critical. Banks are realizing that a bank statement is no longer a sufficient instrument for evaluating a business’s performance especially given that companies that have not been operating for months due to COVID-19 have not been banking or generating income but virtually in limbo.

Importance of post-harvest policies

COVID-19 has also revealed the extent to which African countries need post-harvest policies as opposed to too much focus on inputs provision, mechanization and irrigation issues at the expense of post-harvest issues. For a very long time, farmers and traders have been finding their own way around post-harvest challenges, developing their own economy with no policy guidance. Information and knowledge has remained in silos, for instance between farmers and traders who build a close relationship among themselves.

Information asymmetry, barriers to market participation and negligence of market infrastructure has remained the order of the day for decades. Policy makers have never questioned how food finds its way to urban markets from diverse farming areas.  Likewise, few people have been curious enough to find out how urban consumers get potatoes, carrots and other commodities. Very few policy makers know that to operate on full throttle, formal businesses depend on the informal economy for much-needed oxygen without which the whole formal economy cannot breathe. Most food and beverage formal companies would not be getting cash if they did not work closely with the informal sector in the form of tuck-shops and street vending of food. For instance, in Zimbabwe a big sausage making cottage industry is an extension of the informal sector on which many people are depending for food and income.  / /

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Reflections on costing of agricultural commodities – thanks to COVID19

In addition to disrupting food supply chains, COVID-19 has presented a pricing headache for smallholder farmers in African countries. If government directs supermarkets to revert back to pre-COVID19 prices they can easily do so because they have a tradition of keeping records on stocks and prices.  On the other hand, mass markets will not be able to do the same because there is no institution responsible for keeping records and tracking prices. Neither can local authorities like municipalities provide such records because their main mandate is collecting revenue through providing trading space without bothering to collect commodity prices.

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Worsening an already bad situation

PreCOVID-19, fluid interaction between supply and demand in mass food markets at scale assisted farmers and all value chain players in setting prices.  For instance the demand side was made up of specific urban populations which guaranteed uptake for huge volumes of commodities from smallholder farmers. In fact there was a neat match between demand and supply.  However, following lockdown induced by COVID-19 commodities from farmers started flowing to cities through middlemen since the majority of farmers have been restricted from coming to the market in huge numbers.

This scenario has destroyed the previous playing field where demand and supply used to meet in ways that determined prices fairly. Where some farmers try to price their commodities when selling locally, it is difficult unless they are aware of prices in other areas they are competing with in producing the same commodity. Due to the lockdowns, food supply chains are being controlled by opportunists who are determining prices that can be given to farmers desperate to get rid of perishable commodities and prices that consumers desperate for food have to pay. Consequently, there is a big difference between the selling price and the buying price. While farmers are getting very little for their commodities, consumers are enduring very high prices.  Opportunists are the ones reaping abnormal profits. These challenges can be addressed if African countries build robust food supply chains in which every actor’s role is clearly defined.

A case for contextualizing costing in the agriculture sector

Agricultural extension methods in Africa are yet to design dynamic costing models taking into account all commodities produced by smallholder farmers in diverse production zones, especially for informal farming systems and their ecosystems like informal markets. Costing is still based on formal farming systems informed by inputs like fuel, chemical fertilizers, herbicides, cost of water as determined by ZINWA, gazetted labor costs based on representations by National Employment Councils and General Agricultural and Plantation Workers Union of Zimbabwe (GAPWUZ) or their equivalent in other countries.

There are still no formulas that take into account major production cost components for smallholder farmers and informal markets. For instance, the majority of smallholder farmers still depend on natural resources and their own resources for producing commodities. Such resources whose costs have not been calculated by extension agents include communal land, livestock manure, rainfall, family labor or Nhimbe, retained seed, draught power and many others.  Farmers still struggle to convert most of these inputs into monetary value for easier costing.

It is a huge anomaly for African economies not to have costing models for smallholder farmers and informal markets in which the majority trade.  That is why most smallholder farmers have remained price takers for decades.  Usually when farmers sell their commodities, their pricing is based on the gravity of challenges they wish to solve not how much has been invested in agriculture production. A typical question in the smallholder farmer’s mind is: “How many bags of groundnuts or maize can I sell to meet school fess worth $1000?”  In this case, selling commodities is not related to farming as a business but solving external needs like school fees, meeting basic needs like sugar, cooking oil or travelling a long distance to attend a funeral.  Any surplus income from trading commodities is by chance.

Closing a huge knowledge gap

Lack of statistics from the mass markets is a big knowledge gap that every African country should strive to close. By not collecting statistics from the expanding Micro, Small and Medium Enterprises sector of which mass markets are a key component, African countries are under-valuing their economies and piling pressure on the fiscus to provide social safety nets. The best brains in African economies have remained concentrated on the production side, for example agronomists, equipment engineers and economists, among others. Conversely the market and commodity handling side has been left to illiterate and semi-illiterate traders whose interest is mainly to maximize profit.

Such traders can only deal with food and markets to the extent their knowledge allows them to do so. Given the knowledge-intensive nature of food and markets, most traders cannot be expected to come up with solutions beyond their levels of knowledge and expertise. For instance, trader may not see anything wrong in selling all commodities using sacks, wooden crates and baskets yet that is a major avenue through which farmers lose income.  / /

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How COVID19 has exposed limitations of colonial food systems in Africa

The majority of developing countries are still to tear themselves away from the colonial set up where major food markets were located in cities or towns in order to provide food for low income people working in formal industries. Under that arrangement food had to travel from rural areas most of which were 100km away to cities where the main distributors were pro-poor mass markets like Mbare market in Harare. While the majority of urban consumers depended on pro-poor mass markets for food, supermarkets were for the elite and middle class. With the emergence of COVID-19, international standards of dealing with the pandemic have compelled African countries to close mass food markets. However that has happened at the expense of the urban poor on depend on these markets.

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Disruption of natural remedies

COVID-19 has dealt a heavy blow on poor people’s access to natural remedies. Over the past few years, African mass markets have witnessed an increase in the supply and demand for seasonal indigenous fruits, tubers and herbs that have provided stiff competition to exotic colonial foods. The marked increase in the consumption of indigenous foods has revealed urban consumers’ preference for natural remedies. Since most of the indigenous foods and herbs are not sold through modern supermarkets, the closure of mass markets as part of combatting the spread of COVID-19 has denied urban people access to the natural foods and remedies they have become accustomed to over the years. Farmers and rural people who were earning income from harvesting indigenous fruits, herbs and edible insects for sale in mass markets have also been left in the cold by the closure of mass markets.

Urban dwellers who had become accustomed to consuming tsvubvu, matufu, nyii, nhengeni, nhunguru and other fruits that ripen at the same time as field crops have not been able to get such fruits due to COVID19-included lockdowns and restrictions in movement of people and commodities. According to many consumers, indigenous fruits and herbs have medicinal properties that cannot be substituted with pharmaceutical products that are also beyond the reach of the majority.

Towards resilient food supply chains

In the wake of challenges caused by COVID-19, many African countries no longer have money to waste on ill-conceived agribusiness models. That is why the government of Zimbabwe and its partners has started putting in place carefully thought-through food supply chain systems. Besides assisting to cope with immediate, medium term and long-term impacts of COVID19, a robust food supply chain system is envisaged to have meaningful benefits for several value chain players as explained below:

Food supply chain benefits for farmers – A resilient food supply chain will enhance production planning guided by market volumes and trends.  Most farmers do not know market trends and start looking for the market when commodities have ripened or already in the truck at the market.  That should be a thing of the past.  Information generated along the food supply chain is beginning to make farmers aware of the diversity and volumes of commodities consumed by each market, enabling farmers to plan their production in ways that minimize waste of inputs by producing what does not have a market. Aggregation centres are being set up in production zones so that farmers with smaller volumes of commodities sell closer home and do not have to incur losses by travelling to distant urban markets.

Benefits for seed companies – Seed companies in Africa currently compete to produce more seed than farmers can use. That is why a lot of seed is seen in retail shops well after the planting season is over.  Some seed companies end up persuading government to embed their seed volumes in government input programs. A clear supply chain will show the actual demand for seed and help seed companies to plan their seed production properly.

Benefits for nurseries – By showing quantities of food produced and consumed in different areas, the supply chain will assist nurseries to produce seedlings in the right quantities unlike producing more than is needed, leading to throwing away of some seedlings due to absence of demand.

Benefits for stock feed manufacturers – The supply chain will show statistics about livestock producers and their volumes, enabling stock feed manufacturers to produce and distribute stock feed to known potential buyers unlike sending stock feed to communities where demand is not clear. When smallholder farmers produce maize, their major priority is meeting household consumption. They do not plan for livestock unless they are contracted. By revealing volumes for human consumption in particular communities, the food supply chain is beginning to show volumes that can be set aside for livestock.  At community or ward level, the supply chain will soon enable people to plan for household consumption, livestock consumption and surplus for the market so that they do not run out of food.

Benefits for supermarkets, food processors and fast food chains – Most of these players have depended on middlemen for years.  If they put their needs and specifications on the supply chain they will get what they need on time.  Their volumes are often too low to the extent that it does not make economic sense for them to go and fetch commodities on their own from farmers in distant areas.

Benefits for financial institutions – The days of banks giving loans to agricultural clients based on bank statements are over. The supply chain will show statistics of each player’s participation and such evidence will be used as collateral.  In fact the supply chain itself will be a collateral for the entire food system.

Characterizing traders and flushing out unscrupulous ones – By separating genuine traders from the unscrupulous lot, the food supply chain has started eliminating inflation caused by middlemen who merely exchange commodities and increase prices before passing on the prices to the consumers. When negotiating with farmers most middlemen have become used to cite high transport costs as the reason why they should pay less to the farmer but a critical look at transport costs would show that they are not as high as claimed.  In any case, why should the farmer meet the trader’s transport costs?

Who says butternut, sweet potato, carrots, green beans, green pepper and many other bulky commodities should be sold in a 60-70kg bag called a semia or saseka?  In Zimbabwe such measurements have been  distorting value to the farmer’s expense for decades.  Instead of allowing traders to set rules of the commodity trading game, the supply chain will introduce proper standards and measurements starting at local aggregation centres. Most of the bad trading practices are not market-driven but introduced by cartels of traders. For how long are African farmers going to continue selling their commodities in big sacks some of which are over-filled in ways that disadvantage smallholder farmers? Introducing modern measurements like weighing scales at local aggregation centres will sweep bad trading practices away.

Time to build home-grown social safety nets

Among other knowledge and resource gaps, COVID19 has revealed the need for African countries to revisit colonial food policies that have continued to guide decisions about food production and supply without fully taking into account the important role of pro-poor mass food markets. To the extent COVID19 has first attacked donor countries and sources of food aid, low income countries have to urgently start building home-grown self-sustaining social safety nets and resilient food supply chains. Currently, smallholder farmers do not originate units of measurement because they lack a basis for doing so. Most elements for pricing and price determination come from the market. What policy, institutional or operational measures can governments put in place to transfer the power of originating units of measurement from traders to farmers?  This is a powerful avenue for building resilient food systems.  / /

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Tracking or tracing has never been so important – thanks to COVID19

Before COVID-19, the need for privacy was gaining momentum across the world particularly in the global North. People were beginning to frown at the intrusive nature of technology and digital gadgets are notorious for tracking people’s movements and whatever they are doing. In addition to social distancing, contact tracing is one of the phrases popularized by COVID-19 as a key method through which the spread of the pandemic can be kept in check. Post-COVID-19 many people will most likely agree to be tracked wherever they go, especially when given the choice between privacy and staying alive.

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If people can be tracked why not food and agricultural commodities?

The importance of tracking has always been promoted in the name of food safety.  However, very few players in the food industry have been taking it seriously particularly in Africa. Many traders and businesses have not been too keen to share information on the pretext that their information is private property. COVID-19 has pushed the boundaries of what can remain private information as previously secretive traders are opening up in order to cope with market disruptions.

eMKambo is leading innovations around tracking food supply chains as part of dealing with challenges brought by COVID-19 on African food systems. Tracking is the core of building resilient food supply chains as volumes of commodities from each farmer or production zone have to be known as well as numbers of traders and transporters. Additional benefits include:

  • Enforcing fair trading practices and pricing.
  • A market-driven or guided production system that minimizes gluts and waste of inputs. Gluts negatively affect GDP by making resources from production not realizable in sales.  Communities and countries end up under-valuing their agriculture and commodities.
  • Where all players are recorded, tracked and known, government is able to introduce tax collection along the supply chain. Everyone should be proud to pay tax. Farmers cannot complain about poor roads when they are not paying tax when they know that money for road rehabilitation comes from tax.
  • Tracking supply chains enables local authorities to manage cities, towns and growth points efficiently as they know accurate numbers of business people, traders and vendors. This enhances local planning in terms of vending sites, regulation and increasing revenue streams. Most African local authorities have been operating without a system for years.
  • Financial inclusion – The food supply chain system will act as a collateral system, enabling financial institutions, input suppliers and other service providers to feel confident to work with registered economic actors who can be tracked. This will address perennial headaches like side-marketing.
  • Food safety and traceability – The supply chain will simplify introduction of traceability systems which are key requirements for exports.
  • Devolution – The supply chain speaks directly to devolution by enhancing local investment in production zones.
  • Tracking the supply chain as an anti-corruption tool – The supply chain will address corrupt practices that have bedeviled the agriculture sector for decades at the expense of the farmer who has continued to surrender his/her commodities for a song.
  • Behavior change – The supply chain will introduce new behavior among value chain actors.

It takes a pandemic or national disaster for people to stop doing certain things they have become used to.  However, those who do not adapt during a crisis become irrelevant. COVID-19 has presented opportunities for developing countries to value proper transportation, storage, processing and utilization of food. All that cannot happen without systems and infrastructure for tracking who is doing what, where, why and how?  / /

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