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NewsDay

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Why data is AfCFTA's strongest currency

Opinion & Analysis

How can African countries hope to make the African Continental Free Trade Area (AfCFTA) work when there are no systems to facilitate trade within countries and across borders?

African countries cannot compete successfully in regional and global markets when local trade remains fragmented due to the absence of reliable systems. Without robust data and evidence systems, African nations cannot accurately value their natural resources or assess the true performance of their agricultural sectors.

At present, most countries rely on production-side estimates measured in tonnes harvested. But what is the market value of those tonnes? If 10 000 tonnes of a commodity have been produced, how much income and revenue have they generated? How does that translate to contributions to GDP and GNP?

There is a significant gap because more than 70% of agricultural trading remains unsystematised. Governments often focus on quantities delivered to strategic institutions such as the Grain Marketing Board (GMB), but what about the volumes flowing through mass markets? A substantial proportion of agricultural trade occurs on these markets, yet there are no national systems capturing trading dynamics or the amount of money changing hands within these ecosystems.

Using data to build business models

The characteristics of crops and livestock that naturally perform well in specific regions are already known. In many cases, regions that produce certain commodities experience seasonal gluts while other areas face shortages.

How is this information packaged and shared between low-producing and high-producing regions to connect markets and build viable business models?

A farmer may be struggling to sell 10 000 cabbages while another market elsewhere in the country faces a severe shortage. Such mismatches persist because many African countries remain reliant on traditional information-sharing systems. Meanwhile, self-organised territorial mass markets are often ahead in generating and using market intelligence. Information and knowledge remain trapped in multiple silos.

How does someone in Hwange or Lupane know what commodities are available in Mbare and access them without travelling there? In many cases, by the time farmers receive information about potential buyers, their produce has deteriorated and is no longer marketable or consumable.

Information asymmetry and knowledge silos have existed for decades, slowing the performance of supply chain actors such as farmers, traders and vendors.

For example, a sudden and poorly communicated increase in tomato prices due to shortages can disrupt the budgeting processes of food vendors and slow commodity uptake. For vendors, the way a commodity is sold directly affects profitability and business sustainability. If a crate of tomatoes that cost US$40 yesterday suddenly rises to US$45, vendors may be forced to adjust their selling units from US$1 for 10 tomatoes to US$1 for five. Consumers take time to adapt to such changes, resulting in prolonged negotiations and slower sales while the tomatoes continue losing value.

What is informing production practices?

Government, development organisations and private companies have invested considerable effort in increasing production. However, what is informing that production? How are decisions are made regarding quantities to produce and target markets?

The absence of timely data collection and sharing continues to undermine the agricultural sector. There are few organised systems and institutions linking market demand to production decisions in ways that support sustainable business models.

When farming ceases to make business sense, agriculture and food systems become vulnerable. Many farmers lose confidence and eventually abandon production altogether. Establishing efficient systems for gathering and sharing market data is, therefore, essential. Such systems support real-time decision-making without imposing high costs on agricultural value chains.

Transforming markets through digital solutions

These challenges underscore the need for digital technologies.

Drones can provide aerial views of mass markets and border posts, but they cannot capture the details of trading activity — who is buying what, which commodities are in highest demand and at what prices transactions are taking place.

Real transformation will come from establishing digital marketplaces that are integrated with physical markets. Such platforms can translate physical trading activities to real-time digital information.

A trader in Gwanda should be able to see what is being traded in Mbare and place an order immediately, rather than spending several days searching for a specific commodity. Digital platforms can bridge information gaps, reduce transaction costs, improve market efficiency and strengthen regional trade.

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