Dr Fred Kawuma - Trade and Coffee in Afrca--Challenges and Opportunities for Economic Transformation of the Coffee Value Chain

1. Trade and Coffee in Africa--
Challenges and Opportunities
for Economic Transformation of
the Coffee Value Chain
Presentation in Panel 5 of the Technical Sessions
during the G25 African Coffee Summit,
25th-27th May 2022, Nairobi, KENYA
By Frederick S.M. KAWUMA, PhD
African Coffee Ambassador
[Former Secretary-General of the Inter-African Coffee Organisation (IACO)]

2. Abstract
• Background/Introduction
• History of African coffee trade
• What are the achievements/successes that can be celebrated?
• What are the Current Challenges in the African Coffee Regional
Market?
• What are the Prospects for the African Coffee Regional Market?
• What are the inhibitors in achieving the prospects?
• What can and should be done to address the challenges?
• What is the way forward?

3. Brief History of Coffee and an
Overview
• Africa is the origin of coffee [café Arabica & café
Canephora]
• Coffee developments in Africa as part of the colonial
enterprise;
• African countries were not set up with systems to
allow trade between themselves but with Colonial
masters, to provide raw materials; and
• Significance of coffee in the African economy.

4. Achievements/Successes to be
Celebrated
• Emergence of a local entrepreneurial spirit operating with
resilience;
• Increase in cafés or coffee-themed restaurants, making
coffee attractive and trendy across Africa;
• Beginnings of an integrated coffee value chain within the
individual countries;
• Reported improvements in the quality that is traded;
• A growing pool of coffee professionals (agronomists,
quality analysts/experts, baristas, etc.) as well as local
investors;
• Increasing presence of local brands in local supermarkets
and grocery stores; and
• Evidence of increasing domestic consumption.

5. Current Challenges in the African
Coffee Regional Market
• Limited trade in coffee between African countries;
• The value chain is grossly underdeveloped (broadening the
product line, as well as an efficient use of coffee by-
products);
• Lack of common standards for coffee trading, and where
standards exist there is poor enforcement;
• Lack of a spirit of excellence in doing things or doing
business;
• Lack of efficiency due to infrastructure, logistics and other
issues; and
• Limited creativity and innovation (abundance of copycat
practices, and mediocrity).

6. Prospects for the African Regional
Market
Possibilities for incubation and product trials for
breaking into regional and international markets;
Growing middle-class with an interest in the café-
culture, hence prospects for increase in domestic
demand for coffee;
Impressionable young population that can be
groomed to become significant coffee consumers
=> a formidable market;
Transformation of the regional coffee value chain and
creation of ancillary industries that support coffee
production, processing, storage, transportation, and
trade; and
Stimulus for creativity and innovations that will emanate
from Africa and grab the world’s attention–just like was the
case with mobile money.

7. Numerou
s non-
tariff
barriers
Lack
of
skills
Limited
access to
informatio
n
Unsupportive
cultural
practices
Access to
affordable
financing
mechanism
s
Lack of
exposure to
international
best
practices
Limited R&D
and
Intellectual
capital
registration
Unpredictable
policy
environment
Inhibitors
Technological
barriers
Limited
social
capital

8. What Can and Should be Done to
Address these Challenges?
• Who are the main actors and what are their roles?
• What should these actors do?
• How can the private sector work as catalysts to
drive the required change?
• What is the way forward?

9. The main Actors and their Roles
• Private sector/Entrepreneurs
• Production, processing and marketing (main value-chain actors);
=> Promotion of Drink African Coffee, Build Africa – IACO’s
DACBA initiative
• Establishment of an African Coffee Exchange;
• Investment in African maritime logistics
• Relevant Government Ministries, Departments and
Agencies
• Facilitate and provide a supportive environment (good policies,
extension services, certification of inputs, transport
infrastructure, removal of trade barriers, etc.)
• Regional bodies and RECs
• Address cross cutting issues (harmonisation of policies,
processes, standards, etc., that are supposed to support regional

10. How can the private sector work
as catalysts to drive the required
change?
• Corporate leadership should proactively promote acceptable
cultural practices (e.g., promotion of excellence and
professionalism) and develop networks that enhance this on a
wide scale;
• Explore models that enhance increased participation and
greater exposure to international best practices;
• Industry associations to proactively seek avenues to
enhance social capital and to promote available networks.
Initiate networks such as an African roasters guild, etc.;
• Develop a strategy for knowledge creation and knowledge
sharing; and
• Develop partnerships for skills development in the different

11. How can the private sector work
as catalysts to drive the required
change?
• Investment in Maritime logistics to facilitate intra-African
trade;
• Take advantage of opportunities for affordable financing
mechanisms, particularly matching-grant mechanisms;
• Explore partnerships with manufacturers to break the
technological barriers to support investments in the
transformation of the coffee value chain in Africa, incl.
promotion of consumption of African coffee;
• Document policy constraints with proposed actions and
request IACO’s support in engaging the relevant authorities;
and
• Engage with the committees that monitor non-tariff barriers

12. What resources would be required
in order to achieve the desired
goal?
• This is a multi-million-dollar question;
• There are short-term, medium-term and long-
term actions, each requiring to be considered
appropriately; and
• Estimates can be made on the basis of other
activities that others have undertaken which might
have similar costs, otherwise some project
planning experts, in each case, could be of help.

13. The Way Forward?
• Individual investors/entrepreneurs can apply the
hedgehog principle, identify the low hanging fruits
and invest in specific ventures that will address some
of the challenges while providing returns on
investment!
• A comprehensive strategy is required. Perhaps a task-
force could be created to purse the implementation of
the above, with the view to develop a Task Force
comprising the Private Sector and IACO/AfCFTA/AU
to develop projects that will objectively analyse the
issues and provide a road-map for implementation in
each case, for presentation at the next G25 Summit.

14. Ahsanteni Sana
Merci beaucoup
Thank you
fkawuma@gmail.com
+256-776-700190
+256-755-700190