Morocco's Potential as an Agricultural Center
During the inauguration of the first Ukrainian agricultural hub in Africa, held in Ghana, Leonid Kozashchynk, the president of the Ukrainian Agricultural Union, emphasized the complexities of establishing agricultural platforms in regions like West Africa. He pointed out that Ghana, while located in a relatively stable area, is still fraught with internal conflicts, making it less than ideal for such initiatives. In contrast, Kozashchynk highlighted Morocco's previous proposal to host a similar hub on its soil, citing the North African nation's financial capacity and regional influence to effectively manage the distribution of Ukrainian agricultural products across Africa.
Kozashchynk noted that Morocco was prepared to invest in the purchase of grains and other agricultural outputs from Ukraine, demonstrating a willingness to assume risks associated with such a venture. Despite the launch of the hub in Ghana being a positive development, he asserted the necessity for further expansion and the establishment of a more extensive presence in the African market. He underlined the dire food insecurity faced by the continent, where over 25,000 people die daily from hunger-related causes, most of whom are in African nations. With Ukraine producing five times more food than it consumes domestically, Kozashchynk views the extension of Ukraine's market reach in Africa as both a humanitarian opportunity and a significant economic prospect.
Navigating Challenges in African Markets
In discussing the challenges Ukraine faces in penetrating the African agricultural market, Kozashchynk identified political instability and a lack of rule of law in several countries as primary obstacles. He recounted instances where Ukrainian grain vessels encountered piracy and theft, highlighting the risks of doing business in these regions. Additionally, he mentioned prior attempts by Ukrainian businesses to invest directly in African agriculture, which resulted in financial losses due to various complications.
Highlighting the competitive landscape, Kozashchynk pointed out Russia's effective strategies in establishing a foothold in Africa, suggesting that Ukraine must adopt a different approach. He advocated for the inclusion of international organizations, particularly United Nations agencies like the FAO, and global financial institutions to provide security for commercial operations. Currently, Ukrainian agricultural exports account for only 5% of Africa's needs, indicating a vast potential for growth if the trade strategy shifts from exporting raw materials to providing value-added products.
Kozashchynk drew parallels with successful exporting nations such as Turkey, which does not merely sell raw grains to Africa but rather processed products like pasta and flour, thus maximizing profit margins. He also mentioned the United Arab Emirates' model of importing raw materials from Africa, processing them, and then selling them at significant profits. By transforming its agricultural sector, Ukraine could potentially increase its annual agricultural exports, which currently stand at approximately $27 billion. In comparison, the Netherlands, with only one-eleventh of Ukraine's agricultural land, manages to export $108 billion by refining and rebranding raw products for the global market. To shift Ukraine's agricultural fortunes, Kozashchynk stressed the need for substantial investments in manufacturing, estimating a requirement of $85 to $90 billion over the next decade to ultimately achieve an export target exceeding $120 billion. The ideal strategy he proposed involves processing raw materials locally, exporting to a central African hub, and subsequently distributing finished products across the continent.
As reported by hespress.com.
