In this feature, I use the wheat sub-sector in Zambia to show that despite all the rhetoric about sector diversification, agriculture as a whole is still a neglected sector. Previous Governments, including the current Patriotic Front led Government have conveniently advanced agriculture narrowly around political lines (maize-centric) as opposed to wider economic considerations of various crop varieties that can contribute to not only job creation and income disbursement to local grower, but also value addition and exports growth. I argue wheat can be a wonder crop but continues to receive peripheral attention in policy and practice. There are reasons, and one points to failure to understand the role and importance of agriculture in its entirety. Using the wheat sub-sector, I show how.
The 7th Development Plan (2017 – 2021) mentions wheat three times: as a high value export crop, as a commodity which witnessed increased region consumption and that in “to exploit this opportunity, Zambia needs to increase the current production and productivity levels.” Meanwhile, the Economic Recovery Plan (2020 – 2023) anchored on “Restoring Growth and Safeguarding livelihoods through Macroeconomic Stability, Economic Diversification and Debt Sustainability” mentions wheat twice. In this document, wheat is mentioned in relation to diversification away from maize: that there is need to invest in “processing of other crops other than maize such as cassava, soya beans, rice, wheat, cotton, vegetables and tobacco.” Mentioned thirty-nine times, agriculture is clearly crucial to Zambia’s Economic Recovery Plan, but this in no way shows how the Government will create conditions necessary to realize the agro-vision. If the Government is true to its word, then conditions for the promotion of high value crops such as wheat must be made from production to processing in the food industry, including specific policy support to millers.
It is true that wheat consumption in Sub-Saharan Africa (SSA) is increasing rapidly, faster than any other major food grain. Recent projects show that demand for wheat in developing countries will increase by 60% in the year 2050, and that by 2025, wheat consumption in Africa will reach 76.5 MMT of which 48.3 Million Metric Tons would be imported accounting for 63.3% of wheat demand at the current status quo. Between 2000 and 2009, per capita wheat consumption in SSA increased at a rate of 0.35 kilogram (kg)/year, outpacing maize and rice. Total wheat consumption increased by nearly 650,000 Metric tons (MT)/year. With population projections alone, wheat consumption in Sub-Saharan Africa is expected to increase at an even faster rate in the coming decades: 770,000 MT to 1.28 million MT per year between 2020 and 2030.
In Zambia, recent reports show that wheat production was around record 190 thousand tonnes (between 1971 and 2020). Whilst this trajectory is commendable, it only reflects a small part of the wider wheat value-chain. To realize the full potential of wheat, conditions must be created across its chain, including at value addition and process level – in the food industry where more jobs and increased income disbursements can be realized. The wheat sub-sector provides complete value-chain opportunities from input supply, primary production and to value addition in the food industry. But the current Government policy continues to stifle the development of the wheat sub-sector. Policy oscillation from imposing import bans to lifting it, and to poor producer support makes us believe that despite the huge economic potential of wheat, the commodity will continue to play peripheral role in Zambia’s quest for agriculture and economic diversification. One outcome of import bans has been creation of monopolies in the supply of wheat. And even where the commodity is locally produced, selling is often tagged in foreign currency specifically US dollar, which affects much-needed FOREX reserves and most importantly throw millers out of business.
Regionally, Zambia continues to experience high wheat prices into mills (around $450 compared to Angola’s $280), accompanied by duty and surtax charged at 15% and 5% respectively. This affects not only wheat throughput, but also the extent to which the sector can realize its full potential. Between 2016 and 2020, Zambia experienced an annual wheat deficit of about 54 metric tonnes, yet a policy focus on import and export bans continue to take effect at different times. Combined, these dynamics force millers to make huge investments in storage facilities as opposed to expanding their milling capacity. This robs the sub-sector of the massive opportunities that exist nationally and regionally. Unfortunately, without financial “muscle,” millers risk closing their mills or reducing on capacity.
These bottlenoses can be addressed through a clear review of the agricultural sector, highlighting where Government Kwachas can effectively be invested beyond traditional crops. As it stands, it can be said that there is a huge failure in the Zambian agriculture sector, which is a failure to create the conditions for the fulfilment of agricultural potential – in their entirety. In the next feature, I will focus on steps that can help address wheat sector bottlenecks.
About the Author: Dr Simon Manda is a Senior Researcher for Trade and Development at the Centre for Trade Policy and Development. He is also a Visiting Research Fellow at Oregon State University, USA, a Fellow at the Inaugural Pan-African Scientific Research Council, and a Lecturer at the University of Zambia.
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