On June 28, the USAID East and Southern Trade and Investment Hubs, the Eastern Africa Grain Council and the Zambian Commodity Exchange facilitated a regional trade platform in Lusaka, Zambia to connect East African grain buyers with grain sellers from Zambia, Malawi, South Africa and Zimbabwe. The 235 participating grain buyers and sellers signed contracts for a total of 382,640 metric tons at a value of $93.9 million.
In addition to helping stem the immediate food crisis in East Africa, the event created business partnerships for future grain sales. Hub-supported grain associations like EAGC and ZAMACE now have a successful trading mechanism and model, and government support for the removal of regional trade barriers, including export taxes on grains.
“As a Government we declare that we will no longer have any export bans, and we announce the removal of 10% export tax on all grain commodities. We ensure the simplification of export documents and also commit to work with all Governments in the region to support regional trade and to reduce on the rules on the certificate of origin” Said Felix Mutati, Minister of Finance, Zambia. He added that “My Ministry commits to work with industry to remove the logistical challenges faced by Zambian Exporters” Said Felix Mutati, Minister of Finance, Zambia.
Nearly 40 million people in the eastern and southern region of Africa are currently facing a food security challenge. Food prices in the major markets of East Africa are at historic highs; maize prices in Dar-es-Salaam, Nairobi and Kampala are between 55% and 75% higher than the corresponding period in 2016, with prices in Kenya at their highest since 2010. In Dar es Salaam, the price of maize flour is at least 145% above average. Low-income families that rely on maize flour as their key staple food are affected the most.
The upcoming short-rain harvest won’t be able to quench demand or restore food security. The East African Community (EAC) needs trades solutions now.
In Lusaka and elsewhere, the USAID Hubs are helping guide traders and suppliers on deal structure and transaction support and working with regional intergovernmental organizations and other government stakeholders to remove key trade barriers and the temporary lifting of duty on grain imports (e.g., a temporary lifting of Zambia’s export ban and the lifting of the EAC Common External Tariffs by the Government of Kenya).