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African agro-processors advocate for policies that boost local manufacturing

African agro-processors advocate for favourable policies in local manufacturing

Rice processing in South East Nigeria

Experts at the Africa Food Systems Forum (AGRF) in Dar es Salaam, Tanzania, are urging African governments to create and revise policies to safeguard the processing and agro-industrialisation of locally produced agricultural products.

According to the President of MeTL Group of Companies in Tanzania, Mohammed Dewji, Tanzania, a significant cotton producer, has only three textile firms while exporting cotton to China for final product manufacturing due to local taxes hindering competitiveness.

The Deal Room, launched at the AGRF, is a matchmaking platform facilitating business deals and commitments in the agriculture and agribusiness sectors.

It provides companies access to finance, mentorship, and market entry solutions to support their growth objectives.

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Wanjohi Ndagu, Partner and Investment Director at Pearl Capital Partners Ltd. in Uganda, highlighted how some African governments favor imports even when local farmers have surplus harvests. He called for policies that protect farmers and local production.

Several African countries export raw agricultural products but import processed products.

For instance, Ivory Coast and Nigeria are net exporters of natural rubber, which is later imported as car tires, footwear, and industrial goods.

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Tanzania, Mozambique, and Ivory Coast export cashew nuts but import roasted and processed cashew nuts and other value-added products. Kenya exports raw avocados while importing avocado cosmetic products.

Rwanda stands out as a success story, creating a conducive environment for agro-processing investment through favorable policies.

The Strategic Plan for Agriculture Transformation in Rwanda has transitioned the sector from subsistence to a knowledge-based, value-creating sector.

Rwanda's one-stop center expedites business registration, licenses, permits, and other processes in just eight hours, while other African countries may take several months to over a year for similar procedures.

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Rwanda offers investors in the agriculture sector up to seven years of tax holidays and reduced corporate income taxes on exports.

The country's Manufacture and Build to Recover Program (MBRP) provides incentives for the manufacturing, agro-processing, construction, and real estate development sectors. MBRP offers tax exemptions for machinery, raw materials, and construction materials for manufacturers.

Brent Malahay, Chief Strategy Officer at Equity Group, encouraged investors to leverage the bank's "Africa recovery and resilience plan."

This initiative aims to empower, finance, and connect East African Community value chains with global supply chains.

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It capitalises on the region's access to critical raw materials, supports industrial capacity needs, and integrates a growing market.

Isobel Coleman, Deputy Administrator at the United States Agency for International Development (USAID), announced a $4 million investment in VALUE4HER, AGRA's Deal Room product.

VALUE4HER is a continental initiative focused on strengthening women's agribusiness enterprises and promoting advocacy across Africa.

These developments underscore the importance of appropriate policies and support mechanisms in fostering agro-processing and adding value to Africa's agricultural sector, ultimately contributing to economic growth and development.

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