Africa is often praised for its agricultural potential, but a new report reveals that the continent is losing a staggering amount of money every year due to the hidden costs of its agrifood systems. These costs include environmental damage, health impacts, and social inequalities that affect millions of people.
The report, published by the Food and Agriculture Organization (FAO), estimates that Africa incurs or loses $952.5 billion annually on issues related to agricultural production and consumption. This amounts to about 40% of the continent’s GDP, according to the World Bank. Eastern Africa suffers the most, with a loss of $264.9 billion, followed by Western Africa with $231.9 billion and Northern Africa with $197.8 billion.
The report defines agrifood systems as “the activities, processes, people and institutions involved in producing, processing, transporting, marketing, consuming and disposing of food and food-related items.” It argues that these systems generate significant benefits for society, such as food security, nutrition, and livelihoods, but also have negative impacts that are often overlooked or ignored by decision-makers.
One of the main sources of these hidden costs is the environmental degradation caused by unsustainable farming practices, such as deforestation, soil erosion, water pollution, and greenhouse gas emissions. The report estimates that these costs amount to $222.8 billion per year in Africa or 23% of the total hidden costs.
Another major source of hidden costs is the health burden of diseases caused by unhealthy dietary patterns, such as obesity, diabetes, cardiovascular diseases, and some cancers. The report estimates that these costs amount to $409 billion per year in Africa or 43% of the total hidden costs. In addition, undernourishment, which affects over 250 million people in Africa, adds another $18 billion to the health costs.
The report also highlights the social costs of agrifood systems, such as the poverty and inequality of agrifood workers, who often face low wages, poor working conditions, and limited access to social protection. The report estimates that these costs amount to $320.7 billion per year in Africa or 34% of the total hidden costs.
The report calls for a transformation of agrifood systems to reduce these hidden costs and increase their benefits. It proposes a method called true cost accounting (TCA), which aims to measure and value the full range of impacts of agrifood systems on the economy, society, and the environment. The report suggests that TCA can help raise awareness, prioritize solutions, and guide actions for sustainable agrifood systems.
The report acknowledges that TCA is not a perfect tool and that more data and research are needed to improve its accuracy and applicability, especially in low- and middle-income countries. However, it argues that TCA can provide a useful framework for assessing the trade-offs and synergies of different policy options and interventions.
The report also provides some examples of good practices and innovations that can help reduce the hidden costs of agrifood systems, such as agroecology, circular economy, digital technologies, and social protection. It urges governments, businesses, civil society, and consumers to work together to create a more equitable, resilient, and sustainable agrifood system for Africa and the world.
The report is part of a series of publications by FAO on the state of food and agriculture. The next edition, expected in 2024, will focus on case studies to illustrate how TCA can be applied in different contexts and sectors.
Source: Business Insider Africa
