2 Sep, 2018

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Dr. Gondwe key source of competitiveness in agricultural value chains is availability and access to physical infrastructure.
Head of the Agribusiness Department at LUANAR, Dr. Sera Gondwe, has emphasized on the need for infrastructure development if the agriculture industry is to develop in the country.

Dr. Gondwe was presenting research findings on ‘Infrastructure Models and Economics for Propelling Agribusiness’ during the recent Agribusiness Conference organised by the Bankers Association of Malawi at Bingu International Convention Centre in Lilongwe.

She said development of the agricultural sector does not only depend on technology advancement but also infrastructures which include operational framework or basic physical and organisational arrangements needed for a nation or business to operate.

Dr. Gondwe further said key source of competitiveness in agricultural value chains is availability and access to physical infrastructure citing Irrigation, energy, pre or post-harvest storage facilities on the farm, trading and exchange facilities such as telecommunications and structured markets, agro-processing, packaging facilities as well as transportation and Bulk storage.

“Institutional or soft governing rules included regulations, financial (enhancing flow of funds- bureaus, collateral registries, settlement systems), organisational structure, system of delivery of goods and services to people (market),” said Dr. Gondwe.

She further said inadequate infrastructure can significantly reduce growth and productivity along the chain.

“Electricity blackouts which characterize the supply of electricity energy was cited as the most constraint to private sector investment, the poor conditions of most of the road, rail and airport, are a hindrance to the private sector operations. This hinders investments in several other sectors,” she said.

Dr. Gondwe added that poor access to ICT services is also negatively affecting the investments in several other sectors of the economy including banking and registration services.

The study recommends a match for productivity and specific service provision is necessary to commercialise and value add.

“Private sector involvement required to invest in infrastructure and hence environment to motivate them to engage is necessary for policy and regulatory; Investments in commercialisation requires collaborative efforts, to respond to end market demands; Financing is still a key challenge to upgrading the value chains and hence opportunities for the banking sector to innovate to meet the demand for the services,” said Dr Gondwe as she was explaining on the key considerations by the study.

World Economic Forum’s Global Competitive Index shows that Africa is one of the least competitive regions and mostly due to poor infrastructure. Research by Ulimwengu et al., 2009 also states that roads encourage agricultural productionand development dynamics such as market access and transactions costs. While World Bank states that lack of storage and postharvest processing infrastructure leads to high postharvest losses (estimated to be 21 per cent for grains and 50 per cent for other more rapidly perishable products (FAO), Malawi.