Exporting Raw Products Without Adding Value Enslaves Africans

Exporting Raw Products Without Adding Value Enslaves Africans

Dr Subiri Obwogo • 6 June 2019
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Three years ago, I’d travelled to Uganda and came across an article published in The Citizen. It was written by Uganda President Yoweri Museveni and it touched on a subject close to my heart— value addition of agricultural products and minerals.

I saved a copy of the article and today I want to revisit the subject. The article argued that when Africa countries export raw products— crops, minerals, among others— to Europe or elsewhere without adding value, they are effectively losing jobs to those countries. He termed this scenario modern slavery.

He used textile industry as an example. A kilogram of ginned cotton sells at $1.37 but when it’s turned into yarn, the price is $3. When woven into fabric, it sells at $5. The final garment that you and me proudly wear to office or church every Sunday sells between $8-10, up from the initial cost of a kilo of ginned lint cotton ($1.37).  

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When I was growing up, cotton was the only cash crop that grew in my home and I remember how we’d spent afternoons in the scorching sun plucking out the downy white fibre. My dad would then take it to the ginnery in Muluanda where it would be weighed. He would then wait for six months before getting paid.  

The bottomline is that when we sell lint cotton (after ginning) we’re losing jobs in spinning, weaving, printing and tailoring. This scenario applies to virtually all products such as coffee, tea, oilseeds (soybeans, maize, sunflower) and minerals such as copper and gold.

Sometimes it’s annoying when you think about it. About two-thirds of the population in sub-Saharan Africa is under 25-years and a staggering 29million young people are entering the job market every year. So, why do we continue employing others?

But then, besides value addition, another elephant in the room is low yield/ productivity.  On average, we produce only a fraction of what other developed economies produce per hectare. This applies to any value chain you can think of: maize, potatoes, milk, sugarcane, chicken meat, eggs, among other products.

For example, although the Irish potato is the second most important crop in Kenya after maize, while the Netherlands produces 52.6 tonnes of potatoes per hectare, Kenya does 7.9 tonnes, which is 15 per cent of what the Dutch farmer does. Kenya is among the 10 large producers of potatoes in Africa, but it lags behind South Africa (36 tonnes per hectare), Egypt (26 tonnes) and Ethiopia (13.8 tonnes).

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Low yields are related to poor adoption of relevant technologies such as irrigation, fertiliser, access to finance and mechanisation, among others.

In fact, application of fertiliser is lowest in Africa. The use of fertiliser per hectare in the USA, EU, India, China and Latin America (Brazil) is 132kg, 150kg, 157kg, 364kg and 175kg respectively, compared to average of 17 kg in sub-Saharan Africa. Globally, the average use per hectare is 135kg. In Uganda and Kenya, the application rate is 2.5kg and 38.2kg per hectare respectively (Knoema 2016 data).

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Which reminds me, “When work is a pleasure, life is joy! When work is duty, life is slavery.”