Page 57 - Msingi Afrika Magazine Issue 19

Innovate Afrika

Private equity funds are also piling
into Africa, with much of their
funds supplied by development
banks and foundations convinced
that there’s money to be made in
this modernisation drive. Yet, of the
multiple investments private equity
firms have made in local African
dairy production, few are succeed- Selling milk by the roadside in Borana, Kenya. Photo: Masresha Taye
ing (Table: Private equity funds
and dairy in Africa). Dubai-based
Midcom, for example, tried to buy
into the dairy business in Uganda their milk. “It hurts. The milk we and neighbouring Kenya, there is
in 2013, with backing from the throw away could have been for the one simple, effective measure that
World Bank’s International Finance calves or our children.” can be immediately taken: a stop on
Corporation and the Rise Fund, a imports of powdered milk.
US-based private equity fund man- Contrast this situation with that of There are several options that
aged by TPG. It’s subsidiary, Pearl Uganda, where a 60% tariff pro- African governments can take
Dairies, claimed it would not only tects small dairy farmers on dairy immediately to put the brakes on
become a major player on the na- imports. Today smallholder dairies, imports of powdered milk if there
tional market, but that it would build composed of small-scale cattle is political will. But many African
an export business to neighbouring farmers and herders and small- governments are going in the oppo-
African countries. But a trade spat scale dairy vendors and processors, site direction, in negotiations with
with Kenya, where the local dairy supply 80% of the milk consumed Europe for the Economic Partner-
industry is controlled by the family in Uganda. With regional tariffs ship Agreements or even in Africa’s
of the president, sent the company keeping milk powder imports out own Continental Free Trade Agree-
into a tailspin. In March 2021, Pearl of East Africa, small dairy farm- ment (AfCFTA), which undercut
Dairies announced it was shuttering ers in Uganda have been able to the possibilities their countries have
its Ugandan dairy plant and shifting effectively supply a surge in demand to protect local dairy production.
to organic honey production for over the past two decades, and The governments of the big surplus
export to Europe. they have done so with indigenous milk-producing countries in Europe,
cattle breeds and traditional farm- North America and Australia/New
Development banks, donors and ing practices. The country’s few Zealand are also maintaining their
governments are wasting money and dairy companies have, on several relentless pressure on Africa to ab-
resources trying to industrialise local occasions, tried to use their political sorb more dairy from their corpo-
dairy production in Africa when connections to get laws passed to rations, even as these policies leave
there is huge untapped potential in undermine this so-called “infor- their own dairy farmers in crisis.
traditional systems, which are being mal sector”, but farmers and small
held back by imports. Herders in vendors have allied to stop them. When dairy imports are curtailed,
Burkina Faso, for example, once Nationwide protests of farmers and smallholder dairies in Africa will
supplied the entire nation with vendors forced the government to step into the void and meet the local
fresh milk. But imports of cheap back away from a ban on raw milk demand, as they have wherever such
fat-filled milk from Europe have all sales in both 2007 and 2014. measures are put in place. They can
but destroyed their production over do so without adopting Europe’s in-
the past decade. “I’ve tried selling Dairy as a central part of the dustrial dairy farming practices and
my milk, but most of the time it struggle for food sovereignty breeds of livestock. In fact, Africa’s
goes to waste and ends up being local livestock systems and breeds
poured away,” says Hamidou Bandé, There is no justification for the of animals are highly efficient in
president of Burkina Faso’s Nation- billions of dollars that exit Africa securing milk and livelihoods for
al Herders’ Union. He keeps 300 every year to pay for dairy imports. local communities and much more
cows but now only sells their meat Dairy can and should be produced adapted to the context of climate
Ankole Long-horned cattle, indigenous to because he cannot find a market for locally. As can be seen in Uganda, change than the industrial models.
the Ankole region in Uganda. Photo: Nobert
Petro Kalule
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