A rosy outlook for horticulture business in East Africa

The latest reports from various consulting groups on the long-term prospects for the East Africa's http://www.contadorharrison.com/east-african-community-a-rising-regional-economic-%E2%80%A8power/ economy has highlighted sectors that are set for huge growth in the next decade as fisheries, agriculture and horticulture. In two different reports, it was noted that the number of middle class consumers in East Africa could increase steadily as a result of continued economic growth and expanding urban and semi urban areas. According to one of the report, the number of middle class combined consumers in Uganda, Tanzania, Rwanda, Burundi and Kenya is expected to increase to more than 50 million in 2015, while the portion living in urban areas will exceed 50 percent of population that is forecast to exceed 200 million by 2050. Another report claims that the prospects for the horticulture industry are especially promising, as middle class consumers are expected to increasingly diversify their food choices to include more fruits and vegetables with Kenya and Uganda leading the way. Despite the region’s being a rich agricultural area, more than 50% of the fruits like apples currently being sold at main markets across the region and close to 28% percent of vegetables are imported.

What is more encouraging is that the revenues from horticultural produce sales are higher than for other crops such as rice grown in Mwea in Kenya and Mwanza region in Tanzania. Cereals, which could contribute greatly to poverty alleviation through significant income gains in countries like Rwanda and Uganda are underdeveloped. In Uganda, horticultural farming has developed rapidly over the past five years especially in areas close to densely populated towns like Namulanda area on Kampala-Entebbe road. Just like in Kenya and Tanzania, most small farmers in East Africa trying to sell to supermarkets or major shopping outlets have been handicapped by extremely poor supply chains and logistic nightmare. While engaging a client who wanted an advanced software system to handle procurement in his organization a few weeks back, I learnt that traders in East Africa dominate the procurement of produce from farmers and sales to wholesale markets. This means they end up pocketing the bulk of the available profit margin. Me think that member countries of East African community need to encourage horticultural production and help farmers access wholesalers and main markets. There is also need to improve transportation infrastructure, agricultural extension services and farmer access to credit financing and developing high yield parent seeds.

Anyone who has been to all five East African countries knows that traditional retail markets and street vendors need to improve hygiene and sanitary standards. Also wanting are infrastructures that need redevelopment including but not limited to roads, pavements, buildings, stalls and cold chain systems. Such redevelopment would create an efficient procurement and delivery system to connect producers, processors and packers. The other challenge for the region is to increase the supply of fresh produce from small farmers at urban areas markets through public investment in agricultural extension services to train farmers to produce according to the need of the market. Due to poor education systems, most business people in the region including farmers have not embraced market intelligence in levels of the supply chain. This means only a few facilitate business links between producers and farmers with wholesalers and main markets through exhibitions and at times worthless meetings. Reliable transport plans like the planned Mombasa- Kigali railway set for completion in 2018, will be vital for vegetables and fruits that are highly perishable and horticultural crops are often produced in remote, high altitude areas where the proposed railway infrastructure will be present.