Ukraine produces five times more food than it consumes itself - but at the same time occupies less than 5% of the African food market, where more than 25 thousand people die of hunger every day. The opening of the first Ukrainian agrohub in Ghana is the first real step towards changing this situation, but without a profound change in the philosophy of trade, there will be no tangible result.
Why Africa is a strategic market for Ukraine
Africa is the continent that suffers the most from food shortages in the world. For comparison: currently Ukraine exports agricultural products worth approximately $27 billion per year, while the Netherlands - $108 billion, while having 11 times less agricultural land. The difference lies solely in the depth of processing.
Systematic expansion of Ukraine's presence in the African market is both saving lives and enormous economic prospects for our business.
The main obstacle is political instability and the lack of rule of law in many countries on the continent. Attempts to enter the African market en masse have been made before, and most of them ended in serious losses for business:
Ukrainian merchant ships carrying grain were stopped and robbed by pirates;
even after successful and safe unloading, companies simply were not paid for the goods;
attempts to invest in the construction of production facilities directly in Africa also resulted in the loss of invested funds.
At the same time, competitors are acting extremely harshly. For example, Russia has created special armed formations in Africa to forcibly protect its food exports. Ukraine, on the other hand, must follow an exclusively legal path - to involve international institutions (in particular, UN structures, such as FAO) and global financial institutions as reliable guarantors of security.
The key change that needs to be implemented is a categorical refusal to supply exclusively cheap raw materials in favor of exporting products with high added value, for example:
Turkey: supplies Africa not with raw grain, but with ready-made pasta, flour and cereals;
UAE: imports African raw materials, processes them at its facilities and supplies Africans with ready-made food.
To transform agricultural exports, Ukraine needs to attract $85-90 billion in investments in the processing industry over the next 10 years. This will allow it to reach production and export volumes of over $120 billion. The ideal logistics scheme: process raw materials at factories in Ukraine, send goods to the African hub, and from there distribute finished products throughout the continent.
The opening of a trade hub in Ghana is positively assessed, calling it an important step forward. However, it is noted that the location is far from optimal. West Africa is an extremely complex region with permanent internal conflicts, so the hub will most likely only be able to serve the needs of Ghana itself.
A much more effective strategic location would be North Africa. At one time, Morocco proposed creating a powerful distribution hub on its territory. This country was ready to centrally purchase Ukrainian products and independently distribute them across the continent, relying on its financial capabilities and strong regional influence.
The main thing is not to stop there, systematically expand the geography and improve the mechanisms of Ukraine's presence in this extremely important market.
Source: https://dengi.ua/ua/agro/9760010-ukrayinskij-agroeksport-v-afriku-mozhe-kolosalno-zbilshitisya
