Wheat in Sub-Saharan Africa

Background

Wheat consumption in Africa has been rising faster than in any other region around the world. This piece will focus on wheat in sub-Saharan Africa. For those interested in learning more about Egyptian wheat, an August 2014 Gro Intelligence piece on the topic can be found here.

In 2014, the population of Sub-Saharan Africa was 50 percent greater than it had been 14 years prior. And last year, Sub-Saharan Africans were consuming one-third more wheat per person than they had in 2000. These trends combined have led to a doubling in total wheat demand in that time period.

There are several reasons driving Africa’s increased appetite for wheat including urbanization, rising incomes, food aid, globalization in cuisine, and fluctuations in the relative price of other staple crops such as corn. Demand for wheat-based foods have reached all-time highs in many countries both on the household level—as sales of items like pasta increase in grocery stores—and on the restaurant level, as international restaurant chains continue to find big business in Africa.

Local wheat production has not been able to keep up. Sub-Saharan Africa consistently produces less than half, and often as little as one-third, of the wheat it consumes. While domestic consumption has doubled since the turn of the century, production over the same period only grew by 50 percent.

Although this increase has been insufficient, it is far from insignificant. One particularly interesting aspect of the growth in production is that it has been largely driven by a growth in productivity. Wheat production has grown by 50 percent, but the amount of land dedicated to the crop only grew by 15 percent—a positive sign for the future of African wheat productivity.

Wheat gains have been very much regional, with East Africa leading the pack in total production as well as the amount of land dedicated to wheat. West and Central Africa produce negligible amounts of wheat, and Southern Africa’s overall wheat harvest area and production has actually been in a state of decline over the past 15 years.

Lackluster production has translated to an increase in imports. Much of this flow comes from the global top-producers of wheat, a list that includes the European Union (EU), India, Argentina, Ukraine, Russia, and Pakistan. While China produces the second-largest amount of wheat in the world, almost all of it is consumed domestically, leaving little available for export. Regions like the EU, the United States (US), Canada, Russia, and Australia—with their comparatively smaller populations—consistently produce large surpluses which they export to countries around the world.

There is no indication that African wheat demand is slowing down. The United Nations (UN) Food and Agriculture Organization (FAO) projects an increase in Sub-Saharan African per capita wheat consumption, while the United States Department of Agriculture (USDA) has identified West Africa and the rest of Sub-Saharan Africa as some of the largest growth markets for wheat exports through 2024. Given current trends and expectations, the FAO projects that Sub-Saharan Africa will continue to rely on imports, predicting that the net trade balance for the staple grain will grow from current levels of 20 million tonnes to 33 million tonnes by 2050.

Sub-Saharan Africa’s reliance on wheat imports leaves the region vulnerable to global price and weather shocks, which could wreak havoc on regional food security while also draining countries of precious foreign reserves. These unfavorable realities are set to continue in the coming years unless there is a concerted effort to boost wheat production across the continent.

Bread Buyers or Breadbaskets?

Global price fluctuations are far beyond the control of Sub-Saharan African countries. What is in their control, however, is how much wheat they choose to produce.

That is not to say that every country in the region should quickly and aggressively take up wheat production, because not every country can produce a competitively priced product. According to a 2012 study by the International Maize and Wheat Improvement Center (CIMMYT), eight Sub-Saharan African countries have at least 500,000 hectares of land that could competitively and profitably produce wheat without irrigation. These countries include Angola, Ethiopia, Kenya, Madagascar, Tanzania, Democratic Republic of the Congo (DRC), Zambia, and Zimbabwe. In these eight countries, the amount of wheat that could potentially be produced by cultivating that suitable land would actually exceed current consumption levels. Similarly, the World Bank identified 3.84 million hectares of land suitable for wheat production in Sub-Saharan Africa, the vast majority of which is in East Africa. This is almost equal to the amount of land dedicated to the cultivation of wheat in Argentina, one of the world’s major producers of the crop.

In all of these studies, however, two regions consistently come out at the bottom - West and Central Africa. Wheat consumption is growing quickly in these areas, but unfortunately, the climate, soil and/or irrigation infrastructure that exists today is not conducive to wheat production.

Several parts of Southern Africa have been pinpointed as suitable for non-irrigated wheat production, and several more could effectively produce the crop with irrigation. However, production and area harvested in the region’s historical powerhouse South Africa have been in decline over the past fifteen years, as has production in neighboring Zimbabwe. The wheat sector in places like Zambia, Namibia, and Mozambique has been growing, but at very modest rates. Southern Africa’s wheat trade gap has been widening as a result.

Meanwhile, East African prospects are bright, as production in places like Ethiopia has sprinted ahead thanks to favorable growing conditions. Wheat thrives in cool temperatures, and can suffer under high heat or excessive rainfall. The high-altitude, dry and cool climate of many parts of East and Southern Africa are therefore ideal for the crop.

Sub-Saharan Africa’s top three consumers of wheat are located on opposite ends of the continent: South Africa in the south, Nigeria to the west, and Ethiopia in the east. Each of these countries has a dynamic, rapidly changing wheat sector, and each of these wheat sectors is in stark contrast to one another. But all three together help paint a vivid and comprehensive picture of what is happening in wheat across Sub-Saharan Africa.

South Africa

South Africa is Sub-Saharan Africa’s third biggest consumer of wheat and its rates of per capita consumption are some of the highest in the region. The country is unique, however, in that its levels of per-capita consumption have been stable since 2000. Growth in the country’s domestic wheat demand stems mainly from population growth.

Despite growing levels of wheat consumption in the country, South African wheat production has been in steady decline due to a decrease in global competitiveness that resulted from the liberalization of the country’s wheat sector in 1997. In 1996/7, about 1.3 million hectares of land were dedicated to the cultivation of wheat in South Africa. By 2014/15, this figure had dropped to under 500,000 hectares for the first time in recent memory. South Africa, historically the region’s top producer of wheat, has now ceded the top spot to Ethiopia. The simultaneous domestic consumption increase and production decline has led the country to triple its wheat imports since 2000.

Wheat retail prices are now at record highs, as production falls, imports rise, and the South African rand weakens. Policymakers, in an attempt to combat high prices, are encouraging cheap imports, making it even more difficult for South African wheat farmers to compete. As a result, more and more of the country’s producers are abandoning the grain for more profitable crops.

South Africa has the ability to produce much more wheat than it currently does, but its farmers lack the necessary incentives. If the country’s tariff and subsidy schemes continue to encourage the production of other crops, farmers will continue their shift away from wheat, growing ever more reliant on imports.

Nigeria

Despite being the second largest consumer in Sub-Saharan Africa, Nigeria barely produces any wheat. As a country of 174 million people, overall wheat demand is high, even with the country’s relatively low levels of per capita consumption. Although per capita consumption is relatively low, it is growing quickly—swelling by 50 percent between 2000 and 2014.

Nigeria and its West African neighbors lack a climate and geography suitable for high levels of wheat cultivation without irrigation, and as a result, increasing wheat production in Nigeria comes with challenges. However, in collaboration with CIMMYT, researchers from the Lake Chad Research Institute are producing and distributing new and improved seed varieties that fare better in Northern Nigeria. More land is gradually coming under wheat production in the region, but gains have been very modest thus far.

Much of the land that could theoretically grow wheat in Nigeria would have to do so using irrigation, and water management is a major hurdle in the country’s agricultural sector. Only about one percent of Nigerian farmland is currently irrigated. In order for Nigeria to produce wheat, it would have to dramatically improve and expand its irrigation capacity and infrastructure.

In 2014, Nigeria produced only 70,000 tonnes of wheat, less than 2 percent of total consumption. The country is almost entirely dependent upon imports for domestic consumption, and these imports have doubled since 2000, mirroring the rate of consumption growth.

Unfortunately, wheat is far from being the only food item that Nigeria imports. Staggering amounts of rice, fish, and sugar are also brought into the country—and importing these four goods (including wheat) costs

Nigeria about $11 billion each year. The tab for wheat on its own is more than $1.5 billion each year, and most of this imported wheat comes from the US.

The Nigerian government has begun to react, introducing policies designed to help curb imports and save foreign reserves. In 2012, the government introduced a 15 percent tariff for wheat grain and a 65 percent levy for wheat flour. When this alone proved to be insufficient, the government announced its intention to require that all bread in Nigeria include 10 percent cassava or sorghum flour by 2016.

Nigeria’s unfavorable wheat growing conditions mean that the country will be relying on imports for some time to come. Improvements in Nigerian irrigation capacity, as well as the formation of preferential trade agreements with budding African wheat producers, could be a better way forward for Nigerian wheat.

Ethiopia

Ethiopia’s demand for wheat is voracious. Since 2000, overall demand for the grain has doubled, making the country the top consumer of wheat in Sub-Saharan Africa. This growth has been driven both by population expansion, as the number of people in the country increased by nearly 30 million since 2000. Per-capita consumption has climbed by more than a third over the past 14 years.

Unlike other countries in the region, Ethiopia is keeping up with demand. Since 2000, production increased by 140 percent, outpacing the growth in consumption. And as of 2014/15, Ethiopia has 1.8 million hectares under wheat cultivation, producing 4.4 million tonnes. Ethiopia produces more wheat, and dedicates more land to the crop, than any other country in Sub-Saharan Africa.

Despite these major strides forward, Ethiopia’s overall demand still outstrips production. In response to the alarming increase in staple grain prices during the early 2000s, the government announced in 2006 that in an effort to promote food security, it would ban the export of corn, sorghum, teff, and wheat. Since 2008 the Ethiopian government, through the Ethiopian Grain Trade Enterprise (EGTE), has been responsible for importing wheat into the country, which is then sold to millers at subsidized prices. These restrictive policies place downward pressure on the price that Ethiopian wheat farmers can receive for their product, which may present a hurdle to the broad goal of increasing production.

However, the growth in Ethiopian wheat production even amidst policy uncertainties is indicative of the crop’s potential in the country.

Ethiopian wheat is predominantly cultivated by smallholder farmers. While their yields have been steadily improving, they are still somewhat low by international standards. The government’s Agricultural Transformation Agency (ATA) has identified wheat as one of its priority crops and plans not only to lead the country to self-sufficiency in wheat production, but to also become a net exporter of the crop. In addition to improving farmers’ links to markets, the ATA is attempting to improve agronomic practices in the country, offering farmers better access to technology and inputs— which they estimate could improve yields by 50 percent.

Furthermore, Ethiopia can actually dedicate much more land to wheat than it currently does. A 2013 study by CIMMYT concluded that the country could profitably produce wheat in a variety of its ecological zones. The study went on to estimate that Ethiopia’s “current wheat area and production are less than 20 percent of the simulated highly profitable wheat area and production.” The study concluded that Ethiopia could, through strong levels of intensification, profitably produce up to 28 million tonnes. Ethiopia has the potential to meet domestic demand, and then some.

Conclusion

Africa’s appetite for wheat is unlikely to slow down anytime soon. And while parts of the continent are easily able to increase their production, others are not so fortunate. Although not every country has the means or ability to produce wheat, there are several regions that can increase production to meet regional demand and lessen reliance on foreign imports.