Food prices must drop in Africa. How can this be achieved?
Food is particularly expensive for households in sub-Saharan Africa – relative to their incomes. Prices are 30-40% higher than in the rest of the world with comparable per capita GDP levels. In West Africa, markets provide at least two-thirds of household food supplies and households spend an average of 55% of their budgets on food. “Transforming the food economy is key to lowering prices,” explains Thomas Allen from the Sahel and West Africa Club Secretariat (SWAC/OECD) in an article published on the OECD Development Matters blog. First, productivity gains are needed to drive down prices. Second, challenges in the downstream segments of food value chains, i.e. in food processing, logistics and marketing must be addressed. Third, strengthening and facilitating regional trade will help reduce transaction costs and achieve economies of scale. And finally, more investment in price monitoring systems is needed, notably for non-cereal commodities.