Why developing countries must keep land as a fluid resource

Instead of shelling out all the land to the current generation, African countries should leave much land uncommitted so that future generations will decide new uses at the time. In fact land should be considered a fluid resource like knowledge. Why should a fundamental natural resource like land be tied to an individual for a whole century through 99 year leases just for the sake of getting a loan from the bank?  In the case of Zimbabwe, this question is more intriguing because banks that are using absence of bankable leases or collateral as an excuse for not funding agriculture do not even have the money.

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Would you rather own the land or the market?

In the current knowledge economy it is better to own the market than the land. Buying and owning land is not necessary because you will be locking capital that you would need to kick-start your farming business. That is why different forms of leasing are now more prevalent in many African countries including Zambia and Zimbabwe.  There is a strong case for African countries to move away from individual ownership of agricultural resources. Previously it was important to own land because there was a very strong relationship between production and markets.  Farmers knew they were producing for particular markets with whom they had strong bondages.

Rather than owning land, owning the market is more viable because the market informs what should be produced on the land. The production side should respond to dynamics in the market. It is no longer about having more land because markets determine what to produce, for whom, where and when? That is why land should be seen as a fluid resource so that a new farmer can choose to produce different crops like goats in Buhera, Peas in Murewa and fruits in Taveta (Kenya) in response to market demands.

Toward full utilization of land

Although it may have its own limitations, the lease-driven model will lead to full utilization of resources by farmers as they ensure production matches supply. Networks will also become more important than owning land. Many farmers have the best land but because they belong to the wrong networks they cannot fully unlock the value of their land. It is through networks that resources such as finance can be accessed much better and faster than banks. Questions that farmers are being forced to answer include: From the financial side and the knowledge side, who is providing you with relevant information or knowledge?  How are you getting information about the market?

Many former commercial farmers in Zimbabwe are coming back to lease the land they once owned because they still own the markets they used to serve pre-land reform. On the domestic scene, middlemen known as Makoronyera own the market and look for producers as well as production areas. They simply go to collect the produce wherever it is produced without worrying about owning the land. The market should determine the duration and structure of leases, not government policy. Even if you have a 99 year lease and the market decides to change into new commodities, you will not fully utilize that long-term lease. To the extent traders or Makoronyera now lease land by informing what should be grown, where and when, it is now the market leasing the land and deciding how to use it not the farmer or financial institution.

 Advisory services on land utilization

Beyond teaching farmers about farming as business, advisory services on resource utilization are badly needed across Africa. There has been a quiet transition from an individual lease model to the market leasing land. A model that combines leasing, knowledge and resource utilization is emerging as seen through several barter trade versions of leasing including share cropping and many verbal lease agreements based on relationships.  These are some of the forces silently shaping African agriculture.

Capacity assessment of farmers has to be done and should remain fluid like land. Farmers’ capacity has to be assessed in relation to available natural resources, looking at questions like: If a farmer has 200ha of land what is his/her capacity and potential to utilize it?  How much capacity can the farmer use in the next 20 years? In a competitive environment, it is difficult to make projections of the agriculture sector without examining different capacity levels of diverse categories of farmers. Assuming there are 500 000 smallholder farmers, it is impossible to make useful projections using hectares of land occupied by the farmers to understand capacity as a resource.

If farmers in Mazowe district of Zimbabwe allocate 20% of their resources towards feeding the whole country, what equipment do they require?  What are individual farmers like Mr Collins Nherera’s growth pathways for the next five years?  Other important elements include sources of income and remittances. Do farmers have other sources of money or they are ploughing back profits into the land?  What are other demand sources like school fees or extended family?  How farmers allocate resources to other needs like two children at university and the other two in secondary school?  These are some of the issues locking tobacco farmers in contract farming models as they will be chained by other family commitments.

 If not the market, who can reveal opportunities within African agriculture?

Many people are afraid to venture into agriculture because no one has convincingly explained hidden opportunities.  Rather than taking farming as a career path, young people and pensioners are taking it as a last resort. Intentional efforts should be directed at showing that farming can provide more green pastures than opportunities in foreign countries. Farming should be repackaged to be like any other business. This will reduce cases where some people are using agriculture as a stop gap measure to supplement incomes from other sources like formal employment in banking or government.  It should be the main priority like every business not a retirement home.

However benefits can only be seen once land is treated as a fluid resource like capacity and knowledge. When encouraged to invest in agriculture as a career path, young people can lengthen value chains that are currently ending at local markets to the export market where new tastes and preferences are emerging. Local stakeholders can then be capacitated to use local resources to engage in profitable farming as opposed to depending on external investors.  Although they may not immediately declare their interests, those bringing Foreign Direct Invest (FDI) definitely want to get more than 51% of the shares in the business.  They can also swiftly change goal posts at profit sharing stage and get more than they have put.

The power of role definition

It is important to define who is who in agricultural value chains and determine capacity gaps. Production is defined in terms of infrastructure, land, labor, equipment and irrigation systems among other assets. But in the market there is no system for assessing related assets like infrastructure or ways of characterizing different traders and related equipment. African policy makers are wrongly using land to define and classify farmers into communal, A1, A2 and commercial.  A lot of undocumented knowledge should be used to define farmers.  For instance, from a land size definition, Mr Collins Nherera is a lower A2 farmer but his knowledge is more than that of large scale commercial farmers.  Profiling farmers should be used as independent classification because capacity is broader than land resources. Land should be a fluid resource waiting for farmers with capacity to use it unlike giving it to everybody irrespective of capacity.

Charles@knowledgetransafrica.com  / charles@emkambo.co.zw / info@knowledgetransafrica.com

Website: www.emkambo.co.zw / www.knowledgetransafrica.com

Mobile: 0772 137 717/ 0774 430 309/ 0712 737 430

 

 

Blinkers associated with basing projections on hectares of land

While economists have been schooled into projecting agricultural income starting from the size of the land, such an approach is now found wanting in the knowledge economy. There is no doubt that land is important but valuating natural resources for investment purposes should go beyond hectares of land to the quality of soil and water, among other key elements that are often ignored. The fact that Masvingo, Mazowe, Gokwe and Muzarabani have different climatic conditions and soil types means their mize yields will also be contextual. That is why you cannot have the same hectares as projections of yields.

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Human capacity as a more important part of the assessment criteria

There is an emerging realization that human capacity is a critical consideration over and above natural resources. Two farmers in the same area, given the same inputs and planting at the same time will produce different yields due to intrinsic human factors and talents. So if you do not assess human capacity in terms of knowledge within farmers at different levels you will miss fundamental factors that influence agricultural performance. Unless there is solid criteria on which farmers can be assessed, it will remain difficult to find a pathway for upgrading farmers from one level to the other.

When the right assessment criteria are used, within farming areas farmers can be found more than five different categories of farmers with diverse capacities and needs. That is why mapping knowledge pathways is increasingly becoming more important.  For instance, how much knowledge do two new neighboring farmers have?  How much knowledge are they sharing or they are just living side by side as two silos? It may take years for new farmers to build relationships that stimulate knowledge sharing. Where relationships are weak, knowledge sharing pathways are also weak.

The power of appropriate farmer classification

During Zimbabwe’s land reform, land allocation processes were not based on resources or knowledge within farmers. That is why farmers from different backgrounds and with different resource endowment levels can be found in the same neighborhood. An Ambassador can been seen sharing a boundary with a peasant farmer. This could have its own social advantages but there is no knowledge sharing ecosystem due to different classes. Such anomalies are rendering the agriculture sector more fragile because commercial farmers cannot plan with A1 farmers who have different needs. Villagers in the same communal area can easily work together because they share the same characteristics and social fabric.

Before land reform, it was easy to coordinate production among large scale commercial farmers because they had a well-developed knowledge sharing culture around clubs where they met to discuss business while playing golf. This is where monopolistic strategies were stitched. On the other hand, new farmers may have come onto the land through politics, government positions, nepotism, company executive positions linked to government or they are war veterans.  All these diverse backgrounds have turned new farming areas into a melting pot of cultures that are taking long to fuse positively.

Sense of belonging among communal farmers

Communal farmers are more bonded because having been together for decades, they have developed strong relationships enabling them to share resources.  Their classes are not different – they meet subsistence and surplus requirements. There is also a certain level to which rural communities value their sense of belonging. For instance they do not import labor but local people can easily provide labor in exchange for food or getting their land ploughed for cropping.

The notion of kuronzera/ukulagisa is a perfect example of situations where some communal families use their grazing ability to own cattle and enjoy related benefits like milk by herding cattle on behalf of the owners while they also use to grow crops.  Nhimbe is another way of sharing resources and knowledge. You just brew some mahewu or beer and neighbors bring spans of oxen to plough and plant for you. Another powerful resource which was used for different purposes including exchanging crops, seed and livestock breeds was the extended family system.  Although it still exists it has been weakened by partisan politics and imported religion.

How the benefits of proper classification extend to the market

African informal mass markets like Mbare also survive hardships because they are public institutions where knowledge travels freely through networks and relationships.  Actors like traders creatively bring their knowledge together in order to be more competitive, for example to fight imports as a group. Conversely the private sector is too competitive to the extent of not sharing knowledge or information critical for the survival of the entire industry. Farmer unions, chambers of commerce and churches also tend to cherry pick members from robust social ecosystems and put them in silos like political parties and denominations through a membership drive. This blocks knowledge sharing by dividing communities and families.  There should be a mechanism for new farmers to be brought together in ways that build strong relationships. This is more on the social side but can form the glue for economic empowerment and rebuilding social capital currently being under-utilized.

Paying lip service to proper classification explains why farmers are not protected from dubious service providers such as those who provide borehole drilling services or veterinary products. Ideally this is where farmer unions should come in and develop capacity to design terms of reference as well as contracts for different service providers including those claiming to do artificial insemination or soil as well as water testing. It is not enough to ask for quotations from service providers but there should be  contracts with clear terms of reference and payment terms.  This will ensure recourse in the case of service providers failing to deliver.

However there is a limit to what farmers can do

eMKambo is not suggesting that farmer classification will address all challenges faced by farmers. Given the complexities and technical knowledges involved, issues related to water siting and borehole drilling should be done by government agencies like the Zimbabwe National Water Authority (ZINWA). These should map key natural resources like underground water, showing all information and maps about water availability or yield in different farms or production zones. This could be another income generating route for ZINWA.  The same way critical resources like roads and dams are planned should be extended to underground water and minerals.  We cannot have every Jack and Jill doing what they want.

Due to limited resources, farmers end up at the mercy of dubious service providers. With new technology we should be able to easily estimate underground water availability the same way mining companies can know that underground minerals will last for more than 40 years and start building houses and other infrastructure before actual mining begins. The same applies to soils. Communal farmers have been tilling the same soil for more than 100 years. It should be the role of government to map soils and conduct testing so that farmers do not continue expecting better yields from exhausted soils. We cannot expect every farmer to take his own soil samples when the land belongs to the government.

Unfortunately African policy makers have been blinded by imported knowledge, thinking that fertilizers like Ammonium Nitrate and Compound D can be solutions to our soils. To what extent are these fertilizers really adding value?  What if some soils now need totally new types of fertilizers? The livestock sector also need fresh experts who can examine the kinds of grasses and pastures since original pastures have disappeared, giving way to grasses that are no longer suitable for livestock production.

 How much can be left in private hands?

African policy makers should realize that there are sectors or areas that should not be left to the private sector. If governments ensure institutions like the Standard Association of Zimbabwe (SAZ) get involved in certifying food standards, why not do the same for underground water, soils, minerals, pastures and other resources?  Borehole drillers should be certified. Currently anyone able to buy drilling machines can easily masquerade as a borehole driller or water diviner and take advantage of unsuspecting farmers.

Agriculture is not being taken as a serious profession or trade yet people have to be certified to practice as medical doctors or lawyers, among other fields. African traditional healers have remained on the periphery due to absence of proper certification. Absence of policy support creates a room for poor service delivery and proliferation of bogus practitioners. In many African systems, patenting of knowledge has been done through relationships built over decades and expressed through informal markets. How ca we support these pathways to become strong foundations for socio-economic growth?

 

Charles@knowledgetransafrica.com  / charles@emkambo.co.zw / info@knowledgetransafrica.com

Website: www.emkambo.co.zw / www.knowledgetransafrica.com

Mobile: 0772 137 717/ 0774 430 309/ 0712 737 430

 

The high cost of paying lip service to market research

African smallholder farmers are not the only ones famous for producing commodities before conducting market research. Corporates are not immune to such a disease. Instead of investing in market research, most African corporate companies prefer monopolizing the air waves, bill boards along urban roads and mainstream print media with advertisements. The consequences of such actions recently caught up with one of Zimbabwe’s big corporates which declared huge annual losses from a business portfolio comprising digital communication, banking and other business units.

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Rather than bringing into perspective customers’ historical experiences with agricultural corporates and financial institutions in Zimbabwe, the corporate mentioned above continues to develop products from the top using imported knowledge. Like some financial institutions, the thinking has been that an effective way of correcting or addressing customers’ negative historical experiences is through advertising and launching new products. Yet you can’t remove or heal people’s bad experiences with financial institutions through advertising or introducing new products. Neither can customers’ negative experiences be erased by creating more banks, introducing mobile money as a guise  of bringing banks closer to the people, advertisements, introducing zero deposits to new bank clients or even reducing transaction costs.

New approaches to rebuilding confidence

There is definite for corporates to come up with a totally new model of rebuilding confidence. For instance, the banking division of the corporate referred to above incurred losses due to operational costs. It embraced the agent banking model before conducting thorough market research, leading to operational costs. Youths and staff members who were engaged to promote the bank through reaching out to everyone and opening bank accounts in the streets were paid on the basis of the number of accounts opened not what the bank would get after accounts were opened. The majority of potential new clients opened bank accounts just for convenience and emergency not because they wanted to save money.

What is now clear is that there is a sound business model no longer exists between clients and banks in Zimbabwe. Customers are resorting to as a last option while some are forced by institutional arrangements where salaries have to come through banks. As if that is not bad enough, banks are not investing much in rebuilding the confidence of customers towards generating revenue and re-investing it through loan products. Ideally, more than 90% of bank revenue should be earned through loans but banks are not developing alternative loan products.

Failure to build business models around business ecosystems

The financial inclusion model being touted across Africa does not have a very strong component of revenue generation. One of the reasons is that financial institutions have failed to identify ecosystems around which sound business models can be built. For instance, what business model can be built with traders in informal markets like Mbare in Harare or Soweto market in Lusaka?  Banks have become more carried away with opening bank accounts through road shows and advertising. Their assumption has been that handing over more bank accounts to more people is equivalent to addressing historical and current challenges faced by clients. Yet as long as financial services are good, customers can travel long distances to open bank accounts using their own resources. Simplifying opening of bank account is not a solution.

Chasing too many hares and riding on development organizations

What also contributed to losses for the corporate mentioned above is not allowing new products to complete business cycles: early stage – growth – maturity – decline. Ideally this takes five to 10 years but the corporate disrupted these growth patterns by constantly bombarding the markets with advertisements of other new products. Some of the products have relied too much on other actors like development programmes to provide life support. For instance an agricultural mobile platform intended for farmers was largely driven by business models of development organizations. Phasing out of such programmes saw the platform failing to stand on its own feet and thus collapsing irrespective of mass advertisements.

Lack of investment in authentic market research has resulted in the corporate referred to above failing to develop products based on customer needs and new clusters. Its products have remained too general and lacking niche markets which are very critical in sustaining business models.  The corporate has ignored the 20/80 rule where a business should ensure to have 20% local customers and 80% on – off customers.

Most of the said corporate’s products do not have strong roots from where products can be developed for the new tree trunk, when using the tree analogy. For instance a product meant for providing mobile transport services in the city of Harare and the digital platform intended for farmers do not have a core cohesive foundation where the products can be controlled. They are all over the place and more opportunistic based on assumptions. The assumption is that the main challenge in Harare is lack of transport yet the real challenge is congestion.

Who says farmers need technical information?

The digital mobile platform intended for farmers was introduced on the assumption that farmers want more technical information yet farmers already get the information from government extension services  department which has years of experience in providing technical advice to farmers. Some seed companies and NGOs are also already providing technical advice to farmers in their contracts. Since farmers have more options to switch from one service to the other, the agricultural digital platform has become unviable and redundant as it does not offer unique services but a cost to farmers.

There is also no clear value proposition in sharing weather information with farmers through the mobile digital platform, a service already provided by the Meteorological Services Department. Assuming such information is provided to farmers, what action will they take if they are told that tomorrow temperatures will be 40 degrees Celsius hot?  Such information does not add much value because ordinary people and farmers cannot make meaningful decisions about the weather which is an external factor.

Given that most products of the corporate mentioned above are not inter-related, they cannot reap advantages in mixing resources towards strengthening business models or shaping the growth path of the whole institution.  The corporate has not been able to direct resources to a growing part of the business or prune or refine old business models the way trees are pruned to increase fruit yield, leading to losses.

Lack of valuable content

More importantly, the mentioned corporate’s products lack content that brings value. A bank remains a bank, a bank account remains a bank account. What does an account bring to the customer?  What benefits accrue to someone who banks his/her money to his business or life?  The mobile money is an account but it doesn’t have a business model. It is basically a last option when one cannot hand over money to the bus conductor going to his rural home for handing over to his mother who can easily walk a few kilometres to the bus stop or business centre. The mobile money notion was developed without a business model around it.  People do not rush to use mobile money merely because it is a platform tied to wide network coverage by a mobile network operator. They do so if it offers a valuable service.

Informal markets like Mbare have proved that they don’t need mobile money but a simple model where a farmer brings something of value and the trader brings along the demand side so that trading happens without the need for a middle actor like a mobile money agent.  The corporate also introduced a platform for tractor tillage services on the assumption that tillage services are a major challenge for farmers in Zimbabwe yet that is not backed by facts on the ground. Had the corporate conducted market research and asked farmers to rank their challenges it would have discovered that farmers rank the high cost of inputs higher than tillage. Inputs may be available but the main challenge is affordability. The second ranked challenge would be absence of viable markets. Tillage would be ranked the last challenge because production is no longer a good starting point for farmers and African agriculture but markets. If the market is available and viable it can provide most of the services including tillage services. Traders can pay for tillage services just as they have traditionally financed farmers to produce specific crops.  Providing tillage services in isolation is not a viable business model at all.

It is unfortunate that several African businesses are now more into counting of numbers. For instance, of the 92% mobile penetration by big mobile network providers no one knows how much is being utilized. There is a difference between penetration and utilization. Utilization is the source of income and growth not penetration. A viable business depends on 90% local trading. Informal markets survive shocks because more than 90% of their trading business is through local currency.

Charles@knowledgetransafrica.com  / charles@emkambo.co.zw / info@knowledgetransafrica.com

Website: www.emkambo.co.zw / www.knowledgetransafrica.com

Mobile: 0772 137 717/ 0774 430 309/ 0712 737 430

In search of authentic salespeople for African agricultural economies

It is one thing to be blessed with natural resources such as fertile soils and water but quite another to be able to explain and convince investors about opportunities embedded in those resources. Given the intensifying competition for investment and influence, the art of articulating opportunities can no longer be a preserve for government officials and national trade promotion agencies alone. When you are proposing love to a lady, you may say many good things about yourself but everything you say will not be more powerful than validation from an outsider like the lady’s cousin or your friend.

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The power of Gwevedzo or Munyai

Irrespective of culture, most marriages in the world have since time immemorial been cultivated and cemented by brokers or go-betweeners known as Gwevedzo or Munyai in the Shona language of Southern Africa.  The Gwevedzo or Munyai expertise is now being called upon to pitch natural resources-based African economies to the world. No amount of generic advertisements, conferences, pamphlets, documentaries, Public Relations firms or spin doctors can beat the power of an independent broker. Many countries have been competing using the same strategies to lure the same investors for decades but results have not been very satisfactory. Some of the most compelling business stories are not convincing funders.

Being very smart, investors know that you cannot be a neutral sales person for yourself. It is natural for government officials to say only the good things about their country and policies while hiding weaknesses and threats when in fact investors may be interested in how these can be turned into strengths and opportunities if properly explained. Only an independent broker can creatively weave together a country’s opportunities, threats, weakness and strengths in ways that convince skeptical investors.

The power of historical relationships

While historical political relationships are critical, to what extent should they continue laying the foundation for current and future business relationships? Such a question can only be tackled by a neutral broker. For instance when government officials try to sell Zimbabwean opportunities to China, the narrative is usually framed around other relationships outside business, for instance, assistance provided by China to Zimbabwe towards liberating the country from Western colonialism. To what extent should historical ties continue taking precedence over evidence-based investment analyses?  Several African countries continue to rely on historical relationships with the East and West which has more to do with political reasons than business potential.  For how long will African countries continue basing business relationships with the East and West on colonial ties and assistance rendered during the liberation struggle?

Who should spearhead investment opportunities?

Given that they are not really entrepreneurial, African governments should not be the ones spearheading investment opportunities.  They should just be creating enabling environments with advice from key stakeholders not just corporates. While governments always trust corporates, these guys are always advocating for their own self-interests at the expense of new potential investments and national interests. If corporates are not asking for foreign currency they are asking government to ban imports as a way of protecting their interests.

There is definite need for an independent broker who can use unbiased evidence to identify potential investors and local industries in which outsiders can invest. When most African leaders go on foreign missions they take along a business delegation comprising mostly corporate leaders. Some of the people in the business delegation represent chambers of commerce and monopolies that are more worried about their existence than providing national solutions. These certainly identify opportunities in their favor not those that can expand opportunities and create competition. How can a business delegation be expected to invite competitors?  It is clear that these are not the right candidates to invite potential investors except those in line with their business survival interests.

More reasons for a neutral independent broker

A neutral independent investment broker or analyst is the ideal person or institution to drive investments into African countries. This individual or institution is able to consider the interests of local enterprises, external investors, local populations and government interests like staying conscious of environmental management issues. Corporates would certainly prioritize profits over environmental sustainability. Such a balancing meeting the interests of government, investors, local industry and local populations can only be played by an independent broker.

The broker will also be able to look at the interests of other sectors and get answers to questions like: To what extent do investments in agriculture benefit other sectors like mining and tourism? Corporate captains of industry interested in specific value chains like oil processing or milk processing will barely consider such fundamental holistic questions. Given that government ministries also function as silos (Agriculture, Health, Mining, ICTs, Industry & Commerce, Local government, foreign Affairs, Education, etc.,) they do not have capacity to tackle such over-arching questions holistically.

An independent broker will consolidate an investment portfolio that embraces different government departments, industries, farmer unions and other sectors. Membership-driven groups like chambers of commerce and farmer unions cannot be expected to satisfy such a comprehensive mandate because their eyes are on fishing out members as opposed to being inclusive.

The role of the independent broker can also extend to guiding development organizations into diverse areas of operations. Currently, due to lack of such guidance, most development organizations continue implementing their programs based on recommendations from their donors independent of national priorities.  There is currently chaos in the market as some NGOs compete with private players like agro-dealers and seed companies as well as with government departments. An independent broker can assist by ensuring evidence is used to craft business models that do not suffocate existing industries.

Independent brokers can lure the diaspora

Some Africans in the diaspora are not investing home because they still have grievances with their governments, depending on circumstances through which they ended up in the diaspora. Persuading them back cannot be done by government officials like Ambassadors. They need a different independent institution where they can present their ambitions for consolidation and matching with local businesses at home.  Those who were driven out by political reasons cannot immediately forget what happened and come back unless a neutral person or institution heals the wounds and builds new bridges.

It is no longer just about advertisement or hiring expensive public relations firms but understanding ecosystems that bring together commodities, interests, communities and people. A broker or Gwevedzo / Munyai will play a very important role in opening minds, clarifying opportunities and nudging people into positive relationship building. Fortunately, a Gwevedzo/ Munyai or mediator has always been part and parcel of African economies and societies for generations.  His/her role has traditionally been to connect and build bridges between families and communities. Even if parents may not like each other after accusing each other of witch-craft, the Gwevedzo/Munyai would ensure new relationships are rebuilt through marriages of their children if they fall in love.

How the independent broker can be supported

The independent broker should initially be supported by government and the private sector but once set up should have an independent business model.  The fiscus can only support start-up phases and ultimately the broker’s business model should include creating a fluid investment analysis portfolio which swings with the fast changing situation influenced by climate change, inflation as well as consumer taste and preferences. Tracking all this information for investors and policy review will become a source of income for the broker.

As part of directing investments, the broker should become part of the implementation arm for government investment plans. A government investment plan is meaningless without fluid trends of what is happening on the ground. The broker will ensure policy makers understand the big picture and its important details, both of which are often hidden from policy makers because they are not close to forces that are shaping the future of agriculture and natural resources. Through engaging with all actors, the broker becomes aware that people at the edges of the economy like SMEs and informal markets know more and have more real-time data than the people at the top of government or companies.  In this fast-paced economic reality, opportunities can only be explained through conversations guided by smart  neutral brokers. You definitely cannot have your cake and eat it.

 

Charles@knowledgetransafrica.com  / charles@emkambo.co.zw / info@knowledgetransafrica.com

Website: www.emkambo.co.zw / www.knowledgetransafrica.com

Mobile: 0772 137 717/ 0774 430 309/ 0712 737 430

Linear agricultural policy approaches that should not spill over into 2020

A couple of questions can motivate African policy makers to think critically and reflect about possible starting points for transforming African agriculture from 2020 and beyond. There is no longer any doubt that most imported policy recommendations have failed to fully develop African economies. To that end, as 2020 beckons African agricultural economists and policy makers should ask themselves hard but very authentic questions if they are to really contribute positively to meaningful development.

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More value addition in production zones

In spite of development agencies working in rural Africa for decades, agricultural commodities have continued to flow from rural to urban centres for value addition. The year 2020 should see a reversal of this unfortunate trend. If development agencies were really focusing on development, by now Zimbabwean farmers would be value-adding sunflower at local business centres and growth points like Gokwe, Magunje, Muzarabani, Chitekete and many others closer to farming areas.  Engineers should have designed appropriate medium scale machinery that use diesel, hydro or solar power.

Each household that produces sunflower would be getting its allocation of cooking oil and animal cake with excess cooking oil finding its way into urban markets where it would out-compete expensive cooking oil from corporates. That is the kind of transformation African economies want as opposed to following the colonial route where raw materials used to travel to cities only to come back into rural areas as unaffordable finished products.  Stock feed from sunflower cake can stimulate other value chains like piggery and cattle production. These are also pathways for introducing appropriate technology as well as other business opportunities around solar energy and relevant customized infrastructure.

Producing and selling raw commodities directly to the market has only guaranteed average profits for farmers for decades.  For instance, there is no reason why potato crisps cannot be produced in production zones such as Nyanga in Zimbabwe. It is not sustainable to continue persuading farmers to produce for contractors and the fresh market because they will eventually stop due to skewed business terms.  Why are farmers being persuaded to aggregate groundnuts and deliver to the Grain Marketing Board (GMB) only for peanut butter processing companies to pick those nuts from GMB and produce peanut butter which is then sold back to groundnut producers?  Peanut butter can easily be produced at local business centres like Munengiwa Enterprises in Gokwe South.  This is how African countries can reduce urban unemployment as young people go back to rural areas to utilize cheap land, water and other resources. That will be the genesis of true economic transformation backed by rural industrialization.

Why should salted Maputi be produced in cities when it can easily be produced in rural business centres like what is happening at Chinehasha business centre in Chiweshe community of Zimbabwe? In what mimics toll-value addition, a local business person is processing maize grain into Maputi for local farmers who simply bring their maize grain for roasting into Maputi for a small fee and they take back their processed Maputi for school children’s tuck. More groundnuts are added into the maputi unlike in cities where a few grains of groundnut are added to Maputi (Kungonyunyurudza).

Why should high quality sugar cane come all the way from Honde Valley and Murewa to Mbare in Harare for raw consumption with no attempts to produce sugar at source?  Why are engineers failing to come up with small sugar mills?  Research could only look at the differences in sugar content between garden sugar cane which grows very well in the rainy season and industrial sugar cane produced through irrigation in Africa’s Lowveld.  Why should mango, tomatoes and other commodities travel 192km from Mutoko to Harare when Mutoko centre is becoming a town?  If you see green mealies travelling 604km from Chiredzi to Harare and farmers travelling 550km with commodities from Fig tree to Harare it’s a naked signal of poor market development in the country. There is no way such farmers will make money.

Business models hidden in plain sight

There are many examples of businesses that are keeping communities alive in many parts of Africa but are not receiving policy attention and support. Instead, policy makers seem interested in high profile interventions tied to Foreign Direct Investment (FDI) yet commendable innovations are taking place at the grassroots. Why should goats and cattle travel more than 600km all the way from Binga for slaughter in Harare (Koala)?  There should be abattoirs in production zones and local levels.  Local farmers and communities are not enjoying offals, Mazondo and Musoro of their cattle because everything is taken to big cities.

Wheat from Jotsholo in Matebeleland North province is being delivered at GMB Aspindale in Harare (more than 800km away) only for bakeries from Marondera to come and pick wheat flour from Aspindale for baking bread which then finds its way back to Matebeleland North.  Only lazy thinking can fail to notice something really wrong with this arrangement. In addition, corporate bakeries tend to have too many overheads which prevent wheat farmers from being paid a fair price. Local bakeries do not have over-heads in the form of positions like CEO, Finance Manager, HR Manager, Distribution Manager and an army of managers below who all constitute an unsustainable over-head for a struggling economy.

Transformative potential of mass food markets

By ignoring the role of mass food markets, African countries are under-valuing their economies. That attitude must change in 2020. It is through mass markets that policy makers can see agricultural commodities transitioning from being luxuries to necessities. For instance, Africa’s fast food industry will not survive without potatoes.  The poultry industry will also go down if potato production and supply is negatively affected because chicken and chips has become a famous staple for the young generation. In addition, there is no potato crisps industry without potatoes.   The hospitality industry will be plunged into mourning if potatoes are not available.

More importantly, boiled potato and butternuts are becoming substitutes for porridge for young children. The high cost of wheat flour is raising the demand for tubers like potatoes and sweet potatoes. Government can intervene by promoting breeding and multiplication of cheaper potato seed so that rural areas that are currently depending on mass markets which distribute potatoes from production zones can also start producing potatoes in their back yards and gardens the way sweet potatoes have been agronomized. There is no reason why NGOs that are supporting agriculture should continue ignoring potatoes that have meaningful economic, nutritional and social benefits.

Transforming African economies from the bottom

As demonstrated above, there is enormous potential for African countries to begin their transformation by supporting what is already working. While high profile project attract more buzz and media attention, they rarely translate into authentic and sustainable transformation including the promised employment creation. On the other hand, when fully supported, local communities can come up with appropriate solutions in their production zones.  Unfortunately, African policy makers have embraced predominantly western ideas about development. Their world view assumes community and traditional agricultural practices are less developed and therefore have to be integrated from the top into the so-called global economy irrespective of local contexts.

Yet the cost of inputs cannot be the same for Binga which is a dry area and Honde Valley which depends on fruits. As if that is not enough, national dialogue tends to attract representatives with no experience on what is happening on the ground. In 2020, African governments have to desist from moving information through protocols and statutory instruments which do not consider community voices. Africa will not be developed through a linear development model that rests on the perspectives and capabilities of elites at the expense of ordinary people’s sensibilities.

Charles@knowledgetransafrica.com  / charles@emkambo.co.zw / info@knowledgetransafrica.com

Website: www.emkambo.co.zw / www.knowledgetransafrica.com

Mobile: 0772 137 717/ 0774 430 309/ 0712 737 430

 

The merits of a sectoral approach to developing African economies

Challenges facing each African economy are so many and so diverse that trying to address them all at once is like chasing too many hares and at the end failing to catch one. That is why taking a sectoral approach makes sense. For instance, there is no longer any doubt that agriculture is at the centre of most African economies except a few countries where mining and tourism competes with agriculture in terms of contribution to the Gross Domestic Product (GDP). For various reasons, agriculture tends to have a multiplier effect on other economic sectors

agriculture.JPG

What is the entry point?

Absence of clear entry points in reviving agricultural sectors is a major challenge for many countries.  It is like trying to lift a large pole that has fallen. Do you start from the middle or the other end? This is worsened by the fact that policy makers are not deeply reflecting about their economies in order to draw lessons from the recent past. To that end, they find it difficult to balance the previous phase with the current phase. In Zimbabwe, for instance, the 1990s were characterized by high agricultural production from a few commercial farmers with millions of smallholder farmers being economic spectators.  Food security and export incomes were high but this was not enough to address economic and social injustices in which only a few people owned the means of production as well as markets.

The above scenario justified the land reform as a way of balancing economic and social justice. Land reform produced a lot of farmer categories like communal, A1, A2 and many others. After addressing economic injustices by redistributing land, an enduring question has remained: how can we use agriculture to trigger sustainable economic growth? What can we do to harvest the fruits of land reform?  Redistributing land should not be the end of the story. It is not about endless land audits and redistribution exercises. There is already too much land lying idle without evening talking about land to be repossessed from those under-utilizing it.

It could even be better to leave some of the land fallow for future generations so that they decide how to use it at the appropriate time?  Future policy makers may decide to turn some of the land into plantations of indigenous fruits like masawu, matohwe, mazumwi and others, depending on new tastes and preferences.  Besides contributing to ecological imbalances, industrial agriculture is regrettably nudging policy makers to be in a continuous land acquisition and redistribution mode.  Yet the main focus should be about utilizing available land including water and other related resources. What kind of support is being given to farmers that are already doing well? Answering this question leads to solutions.

Agriculture still has better comparative advantages

Compared to other sectors like mining, agriculture has several advantages. Where in mining, individual actors are called panners or Makorokoza and thus criminalized, in agriculture smallholder farmers are part of value chains. Agriculture has multiple pathways through which ordinary people can become economic actors. You can start growing and selling commodities from your home. You don’t need a certificate of incorporation to begin selling your agricultural commodities as opposed to the gold sector where you only have to sell the minerals to registered buyers. Individuals who decide to participate in wildlife tourism without proper registration can easily be labelled poachers.

More importantly, agriculture has less barriers to citizen participation – that is where employment creation opportunities are abundant. African countries also have more control over agricultural commodities compared to processes through which minerals are priced, demanded and sold. The flexibility in the use of agricultural resources allows Africans to rotate crops and swiftly change land uses yet minerals are not that flexible.  When you are looking for diamonds you cannot begin expecting to see gold in the same mining claim. The flexibility associated with agricultural production has enormous potential to trigger economic revival and growth.

 Start from what is alive and kicking

Each agro-based African country should start by fully assessing its economy and strengthening what is working.  For instance, in Malawi, Zambia and Zimbabwe, informal agriculture markets and smallholder farmers represent what is alive and can be revived at lower costs. These actors continue using available resources to produce food with no need for foreign currency. On the other hand, big processing companies are operating at below their capacity due to dependence on antiquated machinery and inadequate raw materials. In the same vein, production by large scale farmers that depend on irrigation is being hampered by persistent load shedding.

Another vibrant sphere is small scale value addition, for example peanut butter processing, mahewu industry, small scale oil expressing and juice making, among others.  These are producing diverse local food products anchored on dynamic demand. Conversely policy makers are listening to some urban middle class consumers who are complaining about the shortage of soft drinks that need foreign currency when ordinary people have moved on and are producing local beverages, cooking oil and other products that apparently have a growing market and do not need foreign currency.

There is no reason why policy makers and financial institutions continue shying away from supporting the evolution of a big mahewu industry as opposed to supporting imported beverages that are losing market share to local beverages.  What is also alive and gaining traction is indigenous poultry which is quietly becoming an entire industry with powerful value chains. On the other hand, policy makers and development agencies are still obsessed with exotic poultry breeds. Building a strong indigenous poultry industry will it taking over from the broiler industry that is exerting pressure on maize and other resources required to manufacture broiler feed, some of which have a foreign currency component.

Not to be outdone is a resilient home-grown industry producing different categories of appropriate agricultural equipment in areas like Siyaso and other local industries that are fabricating metal and steel to produce what is needed and affordable – scotch-carts, wheel barrows, peanut butter processing machines, hammer mills and many others required by the new agriculture landscape and actors.

What informs national decisions and budgetary allocations?

While one assumes what is alive and kicking should be prioritized in national budgetary allocations, that is not the case. From national agricultural budgets, it is not clear how much goes to agriculture markets.  If we are to move activities and actors from where they are to the next level, there is need for a focused vision that answers questions like: when we upgrade existing agricultural markets, which levels are we going to?  It can’t be shopping malls and supermarkets that are smaller economic actors compared to informal markets. From a value chain perspective, what is the destination for promoting small grains? It should aim beyond consumption.

As currently conceived, Zimbabwe’s command agriculture needs a clear vision beyond satisfying consumption needs.  For instance, the national maize consumption is said to be 1.8 million per annum.  But that estimation does not take into account several maize by-products like the burgeoning maputi industry or the green mealies industry.  If the maputi industry is taking 25% of the maize and green mealies 15% of the 1.8 million metric tons, it means only 55% of the 1.8 million metric tons is available for mealie meal.  This is where a maize-based planning is always found wanting because it focuses on sadza yet there are many other things happening.

Likewise, what formulae is used to determine national quantities of wheat consumed annually? To what extent do all African households need bread as part of their daily meals?  Everyone wants bread but not everyone can afford it.  Policy makers are not considering effective demand and willingness as well as ability. They just assume because everyone needs bread, more wheat should be produced or imported.  What id households have substituted bread with rice and other commodities of which a pot can feed a family of six satisfactorily more than a loaf of bread. Besides, bread needs other expensive additives like margarine, eggs and others while rice can be consumed simply with tomato soup.

Who benefits from soya bean command?  As long as there are few players in the oil processing industry, African policy makers need to be careful about continuing to spoon-feed monopolies.  It is better to promote small scale oil processing in farming areas and growth points. Besides broadening the competitive environment, this also encourages rural industrialization. There is a danger of pouring resources into reviving large scale processing companies that have reached their ceiling. Injecting resources into former big processing companies when production is low will tempt the companies to misuse the funds. When industries ask for foreign currency in order to continue functioning that is not a solution. The Grain Millers Association should not be given foreign currency to go around the globe importing grains when such resources are badly needed at production level.

The same effort directed at mechanization at production level should be extended along value chains.  What mechanization is happening and can be supported at the processing level? What are the requirements?  What is working? What products are being processed in the informal economy?  That is an indication of demand.  Indigenous fruits are available in abundance where they grow naturally.  How can we commercialize them to grow our economy? These are God-given answers to our challenges yet we are ignoring them, preferring formal food systems that provide inadequate solutions.

 Re-imagining a new role for African trade promotion agencies

Zimbabwe’s ZIMTRADE is globe-trotting looking for export markets but it is not supporting clear pathways for turning smallholder farmers into exporters. The destination for the majority of smallholder farmers remains Mbare and other informal markets that are now congested. Does ZIMTRADE expect farmers to move commodities directly from Mbare to Angola, Namibia, India, Turkey and other external markets? At their level, informal markets are already facilitating cross-border regional trade where commodities move from Zimbabwe to Zambia, Malawi to Zimbabwe and Mozambique to Malawi and Zambia, among many other neighboring countries.

Institutions like ZIMTRADE should closely study these patterns and pathways and use them to develop fully-fledged regional trading processes unlike conducting studies about what is needed in different countries when such information can easily be provided by those countries through their embassies. In fact, the same information is supplied to all competing African countries and may not be a source of competitive advantage on its own. Strengthening the domestic trade footprint is more important than spending resources gathering information about what is needed in which country when such information becomes stale before any action is taken at the ground. It is through a robust sector by sector approach that sustainable pathways for reviving African economies can be achieved, including streamlining roles.

 

Charles@knowledgetransafrica.com  / charles@emkambo.co.zw / info@knowledgetransafrica.com

Website: www.emkambo.co.zw / www.knowledgetransafrica.com

Mobile: 0772 137 717/ 0774 430 309/ 0712 737 430

Comparative analysis of imported knowledge and indigenous knowledge

Due to continuous dependence on imported western knowledge, most African countries have not invested in understanding their own local knowledges. For instance, while these countries continue to lament that they do not have foreign currency and advanced technologies, they are not taking time to reflect and compare what they have in abundance with what they lack. Once they do that they will discover how land, water, sunshine, forests and many other resources are more valuable than foreign currency.

kta

 

 Imported Knowledge Indigenous Knowledge
Associated with academic education that alienate people from their local communities. The more one gets formally educated, the more s/he loses identity and roots. Embedded in local context, culture and identity – all these are baked into reliable routines.
Formal companies and corporates are a key feature of imported knowledge. SMEs and informal markets are dominant examples of indigenous entrepreneurs.
Cities are part of western knowledge as shown by infrastructure like roads, electricity and airports, among other Western structures in which imported knowledge is embedded. Imported knowledge in cities draws on resources like culture, labor and natural resources from rural areas where unfortunately little value addition is happening using local knowledge compared to cities where western knowledge is largely used to add value to those resources.
Western knowledge is valueless without indigenous knowledge systems used to produce and safe-guard natural resources. You can bring the best technologies into cities but without commodity supplies from rural areas technologies are valueless.

 

Food system are generated from indigenous economies and brought into western knowledge for value addition.  The most important resources are culture, values and traditions. Valuing all these resources brings comparative advantages for African economies.
Western knowledge measures agricultural commodities through weighing – scales, kilograms, hectares, litres, etc.

Commodities are also valued mostly in monetary terms to a point of saying a cow is worth so many US dollars.

IKS uses buckets, baskets as well as human senses like taste, smell, touch, hear and sight that are more inclined to IKS. Instead of using monetary terms only, IKS has a lot of value related to social beliefs, economic beliefs and even tradition (if we sell a family bull, how will we replace it?). How do farmers value their commodities in order to come up with a price?
Cities talk in terms of unemployment. What do we mean when we say someone is unemployed? How can a city with 96% unemployment continue functioning? How is the city surviving with such high levels of unemployment? In rural areas such levels of unemployment or incapacity may be related to drought or floods. Rural communities are linked to natural resources and do not talk in terms of employment and unemployment at both individual and community. They speak more in terms of asset ownership in relation to agriculture as well as the needs of individuals and communities.
Imported knowledge talks in terms of free trade areas and selling of commodities but knowledge is not considered part of the economic and commodity focus. But there is no clarity on how knowledge traded as part of global trade just like using commercial trade of goods and services. African countries do not have specific avenues for tracking trading of knowledge between countries and commodities.   IKS has strong pathways for knowledge and information exchange combining natural resources, culture, religion, values and other critical factors.

 

African countries have borrowed definitions of the economy and economic growth from imported knowledge. Much of economic growth uses indicators like employment creation, income levels and population growth as well as ICT penetration. But we don’t have knowledge as an indicator or component of economic growth. IKS thrives on social indicators. Whereas the measurement of Western economies is based on economics, African growth paths are defined by social parameters. Social aspects, which we have not defined at the expense of social indicators include culture, tradition and the whole society. All this has its own growth paths from rural to urban areas.
Western platforms are meant to facilitate payment for commodities. The whole notion of platforms was meant for trading commodities without using cash but we have abused it by using it for trading money not commodities. African countries now have a challenge around the adoption of technology. Mobile money is not an innovation because we have failed to put technology to good use or domesticate it to support our traditional transaction modes.
Uses a dollar a day to measure poverty datum line. IKS uses social indicators like depression among men whose wives go to the diaspora or the small house effect on economic depression. These social indicators are directly linked to the indigenous economy. The roots of an indigenous economy and home-grown economy are social not economic factors.
Imported knowledge has become a public good and that is what African universities are investing in instead of venturing into the new and unknown African knowledge. The business cycle for pure knowledge has reached a ceiling and could be seen in the form of sales going down. A major advantage with Africa is that much of the knowledge is yet to be unearthed and has a lot of value. For Africa it’s more about coping this knowledge than creating new knowledge using new inventions.  Wisdom is the basis of the economy.
Defines growth as turning land into buildings like sky scrapers for investors or markets. IKS leaves prime land for producing food systems.  Growth should make IKS pure so that the world can come and learn from Africa on how to build an economic power house based on IKS.
Promotes monocultures in production, consumption and lifestyles. Restoring African culture is a good starting point. For instance, what makes a rural African country or district  unique? IKS also recognizes indigenous institutions like traditional leadership structures.

 

Promotes continuous importation of raw materials and human resources from Africa IKS would rather invest in valuating our resources and knowledge and then we become champions of exports by selling our products not labor and add value to our commodities.
Believes in central policy making and resource management. IKS is conscious to the fact that devolution should not just be about political power. It is about identity and culture. Resources need to be managed at all levels including policy.  Devolution is about opening pathways to receive voices from all angles as well as innovations and initiatives that just need to be supported.
Imported scientifically proven knowledge may not change within the next five to 10 years. It represents a comfort zone for academics who are more interested in proven and reliable routines. IKS recognizes that if we remain stuck with proven knowledge of the past, we will not improve. We have to go beyond and venture into the unknown while building on what works well.

 

 The power of mastering the knowledge value chain

Few initiatives are as important as paying attention to the interface between formal and informal knowledge as well as Western and African knowledge. Processes are critical and so is external knowledge while relationships are important in gaining knowledge.  There is no longer any doubt that African countries need a collaborative knowledge base driven by more than 80% of the local people. That is why a clear understanding of the knowledge value chain is critical. It is important to appreciate what you have and try to improve on your weaknesses. While academics find it easy to theorize from a distance, development is about addressing equity and superiority issues between the state and ordinary people, young people and poor people. Formal and informal economies have different knowledge systems and processes. There are also different processes between the public and private sector.

 

Charles@knowledgetransafrica.com  / charles@emkambo.co.zw / info@knowledgetransafrica.com

Website: www.emkambo.co.zw / www.knowledgetransafrica.com

Mobile: 0772 137 717/ 0774 430 309/ 0712 737 430