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Food trade deficit poses a major challenge for Togo

Monday, June 27, 2016

The populations of Togo (7 million) and Switzerland (8 million) are quite similar. Likewise, the area covered by the two countries is not too different – 56,785 km2 for Togo and 41,285 km2 for Switzerland. On the other hand, Togo has 12 times more agricultural labour force than Switzerland and, despite this, Switzerland is well ahead of Togo in terms of consumption of fertilizers per hectare (15 times), number of agricultural machines used on arable area (4,000 times), productivity of cereals per hectare (6 times) and consequently of value added per agricultural worker (32 times)1. This means that a kilo of cereal produced in Togo is valued five times (32/6) more when produced in Switzerland due to product quality, compliance with norms and standards and market vicissitudes.

Such comparative disadvantages make Togo dependent on other countries to feed its people. Agricultural productivity is still poor: 1.2 tons per hectare for cereals against an average of 1.4 tons for Sub-Saharan Africa and 5.4 tons in the Organisation for Economic Co-operation and Development  (OECD) countries. Agro-industrial transformation with less than 5% of the local market share, remains embryonic.

In 2015, food imports in Togo reached $283 million against $135 million in exports. The food trade deficit of $148 million (Chart 1) in 2015 arises mostly from processed foods (38%), cereals (25%) and seafood (23%). Togo is a net importer of meat and fish despite its strategic position bordering the Atlantic Ocean, and cereals despite a significant trade surplus of corn. The deficit in cereal trade arises by 50% from rice imports, whose consumption is increasingly spreading. Its import reached 135,607 tons for $18 million in 2015.

Togo’s food trade deficit is particularly significant to Asia and Europe. The country is highly dependent on Europe for alcoholic beverages, animal and milling products, and on Asia for cereals. Togo’s food trade deficit and uncompetitiveness is largely due to failure to utilise modern agricultural techniques. It is for such reasons that the African Development Bank President Akinwumi Adesina has called for greater investments in science, technology and innovation in favour of African agriculture2.

Over the past 50 years, food trade balance between Togo and the rest of the world shifted from positive to negative. Between 1965 and 1978, Togo’s food trade surplus fluctuated between $5 million and $45 million. Since then, food trade deficit has skyrocketed to become almost irreversible. Yet for most of the ’80s and ’90s and until the early 2000s, there have been many attempts to re-establish a balance in food trade, with deficits varying sharply between $9 million and $90 million (Chart 3).

In the last five decades, food imports rose at an annual rate of 7.4%, significantly higher than that of exports (4.4%) and GDP per capita (3.6%). If this trend continues without concrete actions, food imports could climb and reach $860 million in 2030, more than three times the amount from exports. The payment of these imports will strain the country’s resources and the foreign currency reserves.

To address these challenges, Togo adopted a new agricultural policy and a strategic plan for agricultural transformation by 2030. This was in February 2016. Agricultural transformation is a key priority for the AfDB. Its approach, Feed Africa: Strategy for Agricultural Transformation 2016-2025, aims at turning Africa into a net exporter of agricultural products and doubling its market share in agro-industry by 2025.

In this regard, the Government of Togo plans to promote, with the support of the AfDB and other partners, the development of agro-industrial growth poles.

[1] Theannual value added per agricultural worker is about US $32,000 in Switzerland and US $996 in Togo.

[2] Speech Delivered by President Akinwumi Adesina of the African Development Bank at the 7th African Agricultural Science Week and the Forum for Agricultural Research in Africa (FARA) General Assembly, held in Kigali, Rwanda, June 13, 2016.

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