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Lupine Publishers | Onion (Allium cepa) Production in Urban and Peri-Urban Areas: Financial Performance and Importance of This Activity for Market Gardeners in Southern Benin

Abstract

Food safety has always been and continues to be a major concern for all countries of the world. This concern is all the more perennial in the developing countries like Benin with a low economic level and still rudimentary and extensive agriculture. To reduce a little bit of food insufficiency, is developed urban and peri-urban agriculture based mainly on market gardening. This study focused particularly on the production of onion in southern Benin. It aims to analyze its performance, to understand the importance of this activity but also to see what are the obstacles faced by these producers. Three municipalities were investigated: Grand-Popo, Cotonou and Sèmè-Kpodji. A total of 60 farmers were surveyed at 20 per municipality. Quantitative and qualitative tools were combined for the analysis of data collected through individual and group interviews. A joint analysis approach was used to achieve specific objectives. It consists to combine speech analysis, participant observation with statistical tools such as the frequency distribution, the regression model and calculation of performance indicators. It follows from all of these analyzes that onion production is profitable from a financial point of view. This performance is enhanced by factors such as age, experience and membership of a producer group. Similarly, the farmers claimed for majority that onion occupies a special place in their market garden production. This production improves their socio-economic and food situations. However, the constraints that undermine the more onion production and thus constitute important producer concerns are financial, institutional, organizational, property constraints and those directly related to production. Farmers therefore, expect a little more effort from agricultural policies to improve the development of this sector.
Keywords: Onion, Performance, Importance, Barriers, Southern Benin

Introduction

The agricultural sector provides essentially food security and livelihood in Benin, with 70% of the population earning their income from agriculture [1]. This sector is even more important for developing countries like Benin, where it is one of the pillars of the economy [2]. Nowadays, it is increasingly recognized that in the developing world, nearly three billion people live on less than US $2 per day [3]. Majority of this population are smallholder farmers producing staple food crops with little prospects of generating higher incomes. Hence, diversification into high-value horticulture is essential for increasing farm incomes, alleviating poverty and improving livelihoods [4,5]. Globally, food production is still a challenge [6,7], especially with the projected rise in world population to over 9 billion by 2050 and increased urbanization in cities [8]. There is therefore still some justification for increasing agricultural production in the coming years [9,10]. Urban vegetable production is an intensive agricultural strategy through which urban dwellers secure income and improve their livelihoods [11].Urban and periurban agriculture (UPA) has been defined differently by Mougeot [12,13], Moustier [14], and Van Veenhuizen [15], but they all lay stress on agriculture’s relationship with the city as a resource and destination for outputs [16].
Onion (Allium cepa L.) is one of the most important commercial spice crops of the world belongs to Amaryllidaceae family [17]. Moreover, essential oil and sulfur compounds have been found in onion which is responsible for unique odour, flavour, and taste [18]. Based on the interested situation in health food development, the properties of onion and its extract as a functional agent have been demonstrated in many previously [19]. Onion (Allium cepa L.) has been valued as food and medicinal plant since ancient times [20]. It is widely cultivated secondly to tomato, and is a vegetable bulb crop known to most cultures and consumed worldwide [21]. The major onion producing countries of the world are China, India, USA, Turkey, Japan, Spain, Brazil, Poland and Egypt [22]. In Benin West African country, this culture has become very important especially in urban areas where the market gardeners devote more land to the production of onion. It is in order to make an inventory and understand onion production in southern Benin that this study was conducted. Specifically, the study aims to analyze firstly the profitability of onion production, secondly to appreciate the importance of onion production in southern Benin and ending by identifying the difficulties facing the farmers.

Materials and Methods

Study zone

The municipalities of Grand-Popo, Sèmè-Kpodji and Cotonou are located in south of Benin and cover respectively 289km², 250km² to 79km². The town of Grand Popo is located in the southwestern department of Mono. It is limited to the north by the Athiémé, Comé and Houéyogbé communes, south by the Atlantic sea, to the southwest by the communes of Ouidah and Kpomassè and west by the Republic of Togo. Located between the parallel 6° 22 ‘and 6° 28’ north latitude and the meridian 2° 28 ‘and 2° 43’ east longitude, the commune of Sèmè-Kpodji is in the Department of Ouémé, the Southeast of the Republic of Benin on the Atlantic coast. It is limited to the north by the city of Porto Novo and Aguégué, south by the Atlantic sea, to the east by the Federal Republic of Nigeria and to the west by the city of Cotonou. The town of Cotonou in turn is located on the barrier beach that stretches between Nokoué Lake and the Atlantic sea, consistitued of alluvial sands of about five meters maximum height. It represents the only municipality in the Littoral department is bounded to the north by the municipality of Sô-Ava and Nokoué Lake, south by the Atlantic sea, to the east by the town of Seme-Kpodji and West by that of Abomey-Calavi. These towns are from a set that has a sub-equatorial climate except Sèmè-Kpodji bathed in a Guinean Sudanese climate. We find in these areas, the sandy type of soil, leached and hydromorphic. The municipalities of Grand-Popo, Sèmè-Kpodji and Cotonou have various socio-cultural group included the mina, the Goun, the Xwla and Toffins.

Methodology

To conduct this research, three (03) municipalities were selected in southern Benin. These towns were chosen partly because of their significant contribution to the onion production of the department to which they belong, and secondly because of the large number of onion producers they contain. We have Grandpopo, Sèmè-Kpodji and Cotonou. Therefore, (60) producers made object of investigation at the rate of twenty (20) producers per commune. This sample consists only of onion producers. Note that the sample was achieved in a simple random in order to give all producers the same probability of being selected. Table 1 show the composition of the sample per commune: The collected data is related not only to the characteristics of the producers, but also to expenditure and revenue of producers. The information has been collected on the basis of a questionnaire and a pre-prepared interview guide.

Table 1: Composition of the sample per commune.
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Source: Results of investigation, 2018.

Data analysis

In this study, the performance of onion production in southern Benin was assessed using several indicators of financial performance. To this end, it is inspired by the work of Dédéwanou [23]. Several profitability indicators were therefore calculated, namely: Gross Product Value (PBV), Added Value (VA), the Gross Operating Income (RBE) and Net Operating Income (RNE). From Adégbola [24] and Bockel [25] studies, these indicators can be calculated as follows:
a) Product Gross Value (PBV): Denoting by Q the quantity of onion obtained and PU the selling price of the kilogram, the Gross Product Value (PBV) is given by: PBV = Q*PU.
b) The PBV is for this purpose the revenue made by the producer.
c) Added Value (VA): It corresponds to the difference between the Raw Product Noise Value and the value of intermediate inputs (CI). Intermediate consumption represents expenses related to the acquisition of insecticides, herbicides, and baskets. Its formula is given by: VA=PBV-CI.
d) The added value is obtained by deducting from the PBV, all expenses directly related to the production. Note that the added value is the wealth that the producer creates. This wealth contributes to the Gross Domestic Product of the country.
e) Gross Operating Income (RBE): It is given by the formula: RBE=VA-(Labor compensation + financial expenses + taxes). To estimate the RBE, it was considered only the hired labor.
f) Net Operating Income (RNE) This indicator represents the balance of RBE less the value of depreciation. Its formula is given by: RNE=RBE-Amortization.
g) The RNE expresses the gain (or loss) Economic agent once acquitted all current operating expenses. RNE, expresses the economic gain (or loss) given the investments made previously. Therefore RNE is obtained by deducting from the PBV all expenses related to production.
h) This study is also proposed to analyze the determinants of the profitability of onion production. For this purpose this study was based on the work of Tovignan [26] and Allagbe [27]. A multiple linear regression model has been developed on the basis of sixty (60) onion producers. Thus, the multiple linear regression formula can be written as follow:
y =α0 +α1xi+ εi
Where: y is the dependent variable, xi the explanatory variables, α is a constant called “intercept” and Ɛi the error term of the model.
The evaluation of the importance of onion production consists to determine changes in socio-economic and food orders induced by this production in the three investigated municipalities. To do this, in a collection of producer’s speeches about perceived improvements since they produce onion was done. The analysis fundamentally was based on the discourse of these producers and through participant observation. More simply, the analysis consists to explain the effects induced by the production of onion in a social context through producer’s speeches and participant observation. These explanations were supported by the comments of some significant producers. The frequency distribution and the farmer’s speeches allowed identifying the barriers of onion production in the study areas.

Presentation of the variables included in the model

Two types of variables are included in the regression model turned. We have on the one hand, the dependent variable and the other explanatory variables. The dependent variable is the Net Operating Income of producers. It was therefore question of identified and analyzed the factors influencing the income of onion producers. So many variables called ‘’ explanatory ‘’ were introduced in the regression model. The explanatory variables included in the model are: age of the producer (Age), household size (Mena), the number of agricultural household assets (ActifM), the level of literacy (Alpha), educational level (Inst), seniority (Anc), membership of a group (APPG), the cultivated area (Sup), the mode of land access (ACCT) and fixed costs (CF).
There are a lot of reasons for the incorporation of these variables in the regression model.
a) Age: Age is a variable expressed in years. Several studies identify age as a parameter determining the profitability of agricultural production. Indeed, the more the producer is aged, the more he gains experience enabling him to improve the financial performance of its operations. This variable has been introduced into the model to see if it has an influence on the net income of onion producers in South Benin. The age would have a positive effect on the financial performance of onion production.
b) Mena: This variable refers to the number of persons who form the household of the producer. Household size is a potential source of labor and allows producers to increase production. It therefore positively influences the net income of the onion producer.
c) ActfM: This variable represents the number of agricultural workers of producer household. The number of assets would have a positive effect on the profitability of production because the market garden production, especially onions requires a lot of labor.
d) Alpha and Inst: Education can acquire a base regarding the management of a exploitation. So, educated onion producers will have a higher income than their uneducated counterparts. The effect of literacy and education on the net income would be positive.
e) Old: This is the number of the producer seniority year. Over the producer has a number of high year of seniority, the more he has strengths and knowledge that will enable him to improve his onion production. It therefore positively influences the net income of the onion producer.
f) APPG: This variable represents the membership or not of the producer to a group. It is a binary variable taking the values 1 if the producer is a member of an onion producer group or 0 if not. This variable could have a positive effect on financial performance of the production, in the sense that the producer’s group members have the support of extension services as well as that of some development programs and projects in order to improve their performance.
h) ACCT: This variable represents the farmer’s access mode to the ground. This variable is set to 0 if the producer has access to land by inheritance; 1 if access rental. The fact that the onion producer owns the piece of land to his work, it could have an influence on his income because the latter will invest the necessary capital. A positive or negative sign of the coefficient for this variable would be expected.
i) CF: Fixed costs represent costs of production. Over were these expenses less producers take advantage of his farm. These variables will therefore have a negative effect on net income of onion producers.

Table 2: Summary of the model variables and the expected signs.
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Source: Results of literature searches, 2018.
Table 2 shows a summary of all the variables included in the model with their expected signs. Note that two software’s were used in this section. SPSS has achieved descriptive statistics and STATA software was used to perform econometric regression.

Results and Discussion

A zoom on onion production and consumption

The following Table 3 shows the countries that produce most of onion in the world. China and India are the primary onion growing countries, followed by the USA, Egypt, Iran, Turkey, Pakistan, Brazil, the Russian Federation, and the Republic of Korea [21]. Onion productivity is highest in the Republic of Korea (66.16t/ ha), followed by the USA (56.26t/ha), Spain (53.31t/ha), and the Netherlands (51.64t/ha). With world production of 74,250,809 tonnes from an area of 4,364,000 hectare, the average productivity across the world is 19.79t/ha. The international trade in onion exports is 6.77 million tonnes. The Netherlands is the highest onion exporter (1.33 million tonnes) followed by India, China, Egypt, Mexico, USA, Spain, and Argentina. Bangladesh, Malaysia, the Russian Federation, the UK, Japan, and Saudi Arabia are the major onion importing countries in the world [21]. According to Bethesda [28], West Africa represents less than 2% of the world output of onion. However, it represents 10±25% of the vegetables consumption in West Africa: its culture is ancient in the region and extends through several agro-ecological zones, ranging from arid Sahelian countries to humid coastal countries [29]. In Benin particularly, the production of the onion is relatively young (40-50 years) [30].

Table 3: The ten largest producers of onion in the world.
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Source: FAO, 201221.
If there is no recent and clear statistics of the volume of domestic onion production, it should be noted that the production has been in galloping development of around 70,000 tonnes against 15,000 just 20 years ago. According to Baco [31] and Affomasse [32], the average area of onion production is 1 ha in Benin representing 57% of total area under vegetable crops. Onion is the market garden predominant crop in Benin since it is grown by more than 80% of vegetable growers. Similarly, the onion is a product consumed by all the urban and rural beninese. Urban consumption is estimated at 3.3kg of onions per year per person. This demand represents a commercial demand for 7000 tonnes per year. The consumption of rural populations against is estimated at 1.1 kg of onions per year per person, a rural consumption of about 14 000 tonnes. Although the production of onion is growing, the country is unable to meet domestic demand of around 45,000 tonnes [33] throughout the year, which explains the need to import the remaining, mainly by Niger, Gaya-Malanville border [34].

Source of supply and sector’s actors

Niger, Burkina Faso, Nigeria and Benin are the biggest onion supply sources to West African consumers. Niger is the largest producer and exporter of onion in West Africa and its commercial network allows to supply the major coastal markets of the sub region. In Benin, for against the import of this speculation is more important because domestic production cannot meet the needs of people. However, nationally the most productive zones are Malanville, Karimama and Grand-Popo followed by large cities (Cotonou, Sèmè-Kpodji, Ouidah, Dassa and Glazoué) that also produce a considerable quantity of onion as urban or suburban vegetable. The production of onion, like most agricultural crops in Benin knows two periods: a period of abundance (January to May) characterized by high availability of onions on the market. Currently, importers of other countries (Nigeria, Burkina Faso, Nigeria) are sourcing local onion to neighboring countries. The second period, that of solder (August to December) is characterized by the scarcity of onions and increasing the product price on the market. In Benin, onion varieties are encountered onion Galmi (or white Galmi onion), purple Galmi (or onion Agades) and Dendi onion of Malanville (red onion or local onion). Of these varieties, the white Galmi remains the favorite onion for Beninese consumers. Besides his characteristics that one knows (bigger than the red onion, relatively smooth, easier to maintain, less spicy (less acidic)), it is its organoleptic qualities that are most appreciated (the pleasant flavor that it gives to the sauce and the fact that it does not blacken). Regarding the sale price of onions, it knows a big fluctuation depending on the period as specified above. Thus, the bag of 100kg of acceptable quality onion (red onion Galmi) and the most appreciated (white Galmi onion) respectively cost 14,500 CFA and 19,500 CFA in times of plenty against respectively 50,000 CFA and 75.000 CFA in lean period. Table 4 shows the selling price of 100 kg bag of different onion varieties in the study area.

Table 4: selling price of 100 kg bag of cultivated varieties of onion.
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Source: Results of investigation, 2018.

The actors in the Value Chain (VC): a multitude of stakeholders

The onion sector is composed of a large number of actors can be subdivided into four groups. It is the operators of the value chain; supporters of the chain; institutional actors; stakeholders and external facilitators
a) The operators of the value chain are most concerned. They are upstream of the value chain and are for the most part the first owners of the product. They represent producers, sellers or resellers, customers or buyers, processors, intermediaries, wholesalers and retailers.
b) The supporters of the chain are those that are not directly related to the process of production or marketing. They are actors who sell their services to producers, processors and traders. This is usually suppliers of inputs (seeds, fertilizers, pesticides), moneylenders or credit providers, pumps sellers and gasoline retailers, MFIs, intermediaries, carriers, of agricultural laborers, carters to transport the onion over a short distance etc.
c) Institutional actors are the actor’s group that provides institutional support in the context of a continuous improvement and regulation of the sector activities. These include state structures (MAEP, CECPA, SCDA, customary chiefs, customs, police, gendarmerie, research and extension services etc.). The finding done is that these groups of actors do not really invest in the development of the sector.
d) Stakeholders and external facilitators are actors who aim to improve the socio-economic life of rural populations. They provide financial and technical support primarily to producers. These are NGOs, development projects and programs, and specific fund donors.
Downstream of the chain, there is a last group of actors which is relatively large: The consumers. Onion Consumers can be at any level of the chain. He may be the producer and in this case he practices subsistence farming or firm that process onion for example. It is important to note that in this sector, the actors play complementary roles. The value chain would not be good if each group of actors not playing its role effectively. The following Figure 1 shows schematically the various actors in the onion value chain in Southern Benin: In fact, some of the onions harvested by farmers are sold to rural collectors or directly to local markets. Intermediaries and wholesalers, for their part, buy onion for the most part from rural collectors or local markets. The purchased stock is then transported to urban markets (for example the Dantokpa,Malanville and Parakou markets). However, it should be noted that some producers sell their crops directly in these urban markets. The following circuit (Figure 2) shows the onion commercialization process described by respondent’s producers. All actors in the chain are present and the complementary relationship they have in the onion value chain.

Figure 1: Groups of actors in the Onion value chain in Benin.
Source: Results of investigation, 2018.
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Figure 2: Process of marketing of onion value chain.
Source: Results of investigation, 2018.
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Potential and motivations of onion producers

The onion production in both North and South Benin is favored by some natural assets available in the country. It is:
a) Agro-ecological potential of Benin (soils, climate, topography, vegetation, drainage network).
b) The geographical location of Benin (proximity to other producing countries such as Niger, Nigeria, Burkina Faso and other countries onion importers like Togo).
In addition to the natural potential, certain provisions promote onion production in Benin. We can talk about:
a) Mechanized irrigation through pumps for irrigation, from the shallow groundwater.
b) Interventions of many projects to support the intensification and promotion of fruit and vegetable crops.
c) Applied search to identify ways of improving vegetable production.
d) The producer’s enthusiasm for onion cultivation due to its high profitability.
e) The supply in specific inputs (Improved seeds, products pesticides, fertilizers...) from the 2000s.
f) Existence of market garders communal groups.
g) The existence of an international market and many village markets.
Especially for urban producers surveyed (Cotonou, Seme- Kpodji and Grand Popo) these are the following benefits that motivate these market gardeners to engage in the cultivation of onion.
a) The high financial profitability of onion production
b) More favorable conditions for the intensification of production systems, due to land pressure and pluriactivity that promote the enhancement of complementarities.
c) The geographical proximity to markets (Dantokpa market for example) reduces transportation costs compared to remote rural areas.
d) The reduction of energy and time in getting goods to consumers: transport, storage, especially for fresh produce.
e) The reduction of post-harvest losses due to the proximity of production areas.
f) Better product quality in terms of freshness for perishable products.

Socioeconomic and demographic characteristics of the surveyed producers

In southern Benin, specifically in the municipalities of Grand-Popo, Sèmè-Kpodji, and Cotonou onion production is predominantly male (78.3% of men against 21.7% of women). These producers have an average age of 28 (±08) with a tenure of 06 years (±04). Moreover, in the study area average household has 04 persons (±02) and 03 (±01) agricultural assets. Levels of literacy and education of the surveyed producers are more or less acceptable in public Grand-Popo, Sèmè-Kpodji and Cotonou. Note also that 50% of producers are active members of a group against a second half not belonging to a producer group. Overall, there are 81.7% literate farmers and 91.7% educated farmers. In the study zone, onion producers have an average area under crop of 2785.48 m2. These areas are obtained either legacy (61.7%) or rent (38.3%). To operate their farms, producers face two types of loads in their exploitations. These called ‘’variables’’ and those ‘’fixed’’. These charges are respectively 93 CFA/m2 and 5.76 CFA/m2. Table 5 shows the statistical variables characterizing respondents.

Table 5: Statistical variables characterizing respondents.
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Source: Results of investigation, 2018.

Financial Performance of onion production

To assess the financial performance of onion production, analysis of operating farmers account was made. Thus, the results of the analysis reported in Table 4 shows that onion production is profitable in southern Benin as the average Net Operating Income calculated is positive (689 CFA/m2>0). These results are consistent with those of MAHRH [35] and Fanou [36] whose studies finally led to the conclusion that onion production is profitable. Table 6 below shows the operating account of onion producers. Note that the financial performance indicators used were calculated in CFA/m2.

Table 6: Financial performance indicators calculated.
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Source: Results of investigation, 2018.

Determinants of onion production profitability

The multiple linear regression model performed to identify the determinants of the onion production profitability is generally significant at the 1% level (p=0.0000<1%). Variables such as age of the producer, the cultivated area, the level of literacy, membership in a group, the experience, and fixed costs are those which influence the onion production profitability in southern Benin. The variables of the model that are not significant are: household size, the number of farm assets, access to land and the level of producer instruction. Age has a positive significant effect on the threshold of 1% on the profitability of onion production. We therefore deduce that more the producer is old, more sometimes he took advantage of its business. The producer thus gains experience with time. Which experience allows him to improve the financial performance of his exploitations? However, these producers are very few open to new technologies that are proposed to improve their income. They therefore remain conservative. This conclusion stems from the fact that seniority has a negative significant effect on the threshold of 1% on the profitability of onion production. It is the same for literacy that has a negative and significant effect on the threshold of 1% on the profitability of onion production in southern Benin. These results are contrary to those obtained by Labiyi [37] which identify education as a determinant of economic efficiency of resource allocation in soybean production in Benin. Membership of the producer group has a positive and significant effect at the 10% threshold on the profitability of onion production.
Thus, onion producers who are members of a group have higher net profits than the others because they will benefit from certain advantages. We can highlight the sharing of information, mutual assistance and the expertise that a producer can take the other being a member of an onion producer group. These results are consistent with those of Tovignan [26] who found that producers who are members of a group have a higher net profit than others who do not belong to any group. Unlike the membership of a producer group, the wheat area has a negative and significant effect on the threshold 5% on the profitability of his exploitations. Thus, over the cultivated area, the less the onion producer benefits from his activities. The producers do not manage to meet the obligations belong to large farms. Note that these results contradict those obtained by Tovignan [26] who deduced that producers who have a large area under cotton production have a higher net profit than those having a small area. It is the same for the fixed charges that have a negative effect and significant at the 5% level on the profitability of the production of onion. Therefore, the more these expenses amounted less the producer benefits from his plantation. Table 7 shows the results of estimation of multiple linear regression model performed.

Table 7: Estimated multiple linear regression models.
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*** = Significant at 1%; ** = significant at 5%; * = Significant at 10%
Source: Estimation Results, 2018.

Source: Estimation Results, 2018.

Onion importance for farmers: The onion producers constitute the largest actors group in the in the sector. Therefore, this production contributes to job creation for over 75% of agricultural assets during market gardening seasons in different regions of the study area. At the household level, onion cultivation is an important source of income and contributes to food and income security for producers. The onion is often the biggest source of cash income and helps to meet the needs of families. At Grand-Popo, as in all the investigated cities (Cotonou, Seme-Kpodji), deferred selling garden products, particularly onion is a powerful lever to support the food security of urban populations. As an activity of counter-season, onion belts allow producers not only to self-employed, to ensure household food security but also to receive significant revenue.
98% of surveyed producers recognized that onion production has resulted in many changes in their socio-economic life. In general, improving purchasing power has had a positive impact on food security, education and health situation of farmers. The onion income often also generates new income-generating activities such as petty trading, farming and others. Culturally, onion helps to prepare for marriage or pilgrimage to Mecca. Woman A and Man B two onion producers of Grand Popo and Cotonou asserted: ‘Onion production is very important to us. With this production I am more and more autonomous. I depend less on my husband. I don’t expect him anymore before buying coal or kitchen utensils. I do all my small expenses through this production income and I can even pay my tontine which was very difficult for me when I was not market gardner’ (A).’Onion is very profitable. I produce a lot of vegetables but little counter-season onion i produce, I can invest in my livestock and it is the same money that allow me paying my three children’s scholar fees each year’ (B).

Importance for input suppliers and other service providers

To carry out their activities, onion producers have much contact with a range of actors that are upstream in the value chain. Producers purchase pumps and pipes, gasoline, seeds, plows and small equipment, fertilizers and pesticides. Then, there is all kinds of economic relations between producers and suppliers, including the informal credit provision. The majority of the production costs regarding labor. Indeed, the onion sector creates many jobs, often for the poor. There is a redistribution of income from large producers to small producers, landless people in rural exodus through the agricultural labor. In most cases, producers raise funds to run production without financial institutions credit. Man C a Cotonou seed seller confirms these observations through these words:
‘In general market garden production allows us seed sellers to us to quickly sell our products in the city. Most of the time, people come to take the seeds of garden crops like onion and tomato. Many people feed through production. Carriers, agricultural equipment vendors, laborers ... ‘ (C)

Health and nutritional importance for producers-self consumer

Conclusion

Onion production is a very important sector which may be considered not only to ensure food security of urban populations but also to improve the living conditions of the producers. This production proves very financially profitable for producers in southern Benin. In addition to its financial performance, it also impacts on social, health, nutritional and environmental producers living. It allows a large number of producers and a considerable number of actors as service providers to have substantial income. However, it would be interesting for agricultural policies to develop actions to limit constraints of this production in southern Benin.

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Since the beginning of the COVID-19 pandemic, economies throughout the world have been suffering as strict lockdown policies and massive drops in aggregate demand have created the sharpest economic contraction since the great depression. Sub-Saharan Africa has been hit especially hard, with imports falling by 21% and exports by 36% since the beginning of the crisis. Sub-Saharan Africa has historically been only weakly connected to the global trading system. The overwhelming majority of African nations exports have long either been natural resources or low value agricultural commodities. A few African nations have seen the beginnings of rapid trade growth allowing parts of Africa to begin escaping the cycle of underdevelopment. However, the COVID-19 pandemic has created severe disruptions to global supply chains threatening long term damage to these economies. In part one of today’s podcast episode, I will discuss how the collapse in global air travel has hit Ethiopia’s air transportation and cut flower industry hard. In part two, I will discuss how the barriers to human mobility, especially across borders has cut into the trade network of Senegal’s Mouride Brotherhood. Finally, in part three of the podcast episode I will discuss rising trade barriers and how they threaten industries such as Rwanda’s nascent export oriented ready made garment industry.
Ethiopian Airlines was founded as a joint partnership with an American airline and the Ethiopian government in 1945. Through Ethiopia’s dark history of poverty, famine and war Ethiopian Airlines remained one of the most constantly functioning institutions in the country. Since the beginning of Ethiopia’s economic boom in the early 2000s, Ethiopian Airlines has evolved into the most profitable airline in sub-Saharan Africa, earning $2.6$2.6) billion in revenues $260 million in profits in 2019. Moreover, the government has invested heavily in the country’s air infrastructure. In 2008, Bole International Airport, the primary airport if Addis Ababa, was the 13th busiest airport in Africa. Since then air traffic has increased 4-fold since then, turning Bole International Airport into the third busiest airport in Africa. As a result, Ethiopia is one of the best connected nations in Africa, and air travel within Ethiopia is relatively cheap and convenient. Air transportation has deep linkages to the rest of the Ethiopian economy beyond the $3.6 billion in foreign exchange it generates for the country.
Ethiopia is a landlocked country, with most of the nearest ports controlled by geostrategic enemies and unstable nations. As a result, air cargo plays an important role in Ethiopia’s economy, especially for the export of cut flowers. Ethiopia’s high altitude and tropical location gives it ideal year round mild weather perfect for growing flowers. However, cut flowers lose 15% of their value every day after being cut, and are only profitable if flown. Although Ethiopian airlines has invested in specialized air freight cargo planes, all of Ethiopia’s cut flowers were flown in passenger planes, and nearly half of cut flowers continue to do so. The cut flower industry, which generates nearly $300 million in revenues a year and employs over 100,000 people, has been severely disrupted by COVID-19. Ethiopia moved fast to close Ethiopian borders, practically ending all international passenger flight to Ethiopia. The effects on the cut flower industry were severe, costing the cut flower industry $25 million, and Ethiopians to waste flowers as compost. COVID-19 has had a severe impact on every industry dependent on air cargo as a huge share of air shipments continue to rely upon regular passenger flights.
The movement of people has been even more hindered by COVID-19 than the movement of goods. As a result, COVID-19 has had an especially hard impact on international trade mediated trough trade diasporas, such as that of the Mouride Brotherhood. The Mouride Brotherhood was founded in 1883 by Amadou Bamba. One of its most distinctive features is the emphasis the Mouride Brotherhood places on hard work. Until the 1980s, this manifested itself as disciples, or Talibes, working for long hours without pay on peanut farms operated by the Marabouts, or spiritual leaders of the Mouride Brotherhood. However, environmental degradation since the 1980s forced large numbers of Mourides to migrate to cities, and foreign nations. The Mourides creation new organizational structures to replace the agricultural cooperatives known as Dahiras, regular prayer meetings, where Marabouts gathered donations from disciples to provide social insurance for Mourides and fund charitable works. However, urban Dahiras served a secondary function where information about business opportunities easily spread, bonds of trust were built between Mourides, and assistance provided to newcomers to cities to start their own businesses.
The Dahiras helped turn the Mourides into a commercial force in Senegal. Members of the Mouride Brotherhood today controls peanut trade, transportation, real estate, and smuggling networks in and out of Senegal. Moreover, the Mourides have emerged as a powerful trading diaspora outside of Senegal. Mourides make up a vastly disproportionate share of the street vendors in New York City, and the tourist sites of Europe. These street vendors are connected by a network of Mouride wholesalers spanning the world buying goods at the cheapest prices. Members of the Mouride brotherhood benefit from Kara International, a money transfer system operated by Mourides to make it possible for entrepreneurs to deposit, withdraw and transfer money across the world while the strong bonds of trust within the Mouride Brotherhood allow for small businessmen receive loans without collateral. The trading system of the Mouride Brotherhood rely upon constant interaction and travel. The regular meeting of Dahiras, essential for building trust, have been forced online by COVID-19. The tourism industry that the Mourides depend upon has completely collapsed due to lockdown policies. Mouride wholesaler merchants in China have faced growing harassment during China’s lockdown, while travel between markets made impossible. The informal Mouride financial networks rely upon individuals physically transporting cash between nations. In a thousand ways, the policies necessary to contain COVID-19 create frictions that hinder the smooth operation of the Mouride trade network.
Many threats to trade in African trade predate COVID-19. There is a growing mood of protectionism due to Donald Trump’s trade war, and since COVID-19 otherwise globalist leaders such as Biden, and Macron have called for supply chains to be localized. However, infant industries from least developed countries such as Rwanda are the most vulnerable to such protectionist moves. Rwanda has consistently been one of the fastest growing countries in the world since the 1994 genocide. However, one of the major obstacles to continued rapid economic growth in Rwanda is its isolation from global markets. Rwanda is a densely populated and landlocked nation, reliant on the export of tea and coffee. One area where Rwanda has had substantial success in diversification is in its ready made garment industry. Between 2008 and 2018, exports of clothing from Rwanda increased from 344,000 to $7.7 million, taking advantage of the low cost of Rwandan labor and easy access to high quality leather.
One of the key reasons for the success of Rwanda’s RMG industry was duty free access to American markets through the African Growth and Opportunity Act (AGOA), which gives duty free access to non-traditional exports from African nations. However, tariff free access to the United States is dependent upon political conditions in Rwanda and the United States. In 2018, the East African Community, which Rwanda is a part of, voted to band the import of used clothing. In 2017, East Africa imported $274 million of used clothing, with 67% of the population purchasing used clothes. However, a desire to promote infant industry and elite embarrassment at poor people wearing castoffs caused the East African Community to ban the import of used clothing. Donald Trump and US trade negotiators, making a problematic situation disastrous, moved to remove AGOA trade preferences from East Africa. While most EAC countries backed down from the used clothing ban, Rwanda didn’t to devastating effects to its clothing industry. US imports of Rwandan clothing declined by 60% , and overall exports by 26%. While trade barriers are harmful to all involved, the damage is greatest to least developed countries.
International trade is essential for least developed nations such as Ethiopia, Senegal and Rwanda to escape from poverty. However, COVID-19 and a rising mood of protectionism threaten Africa’s ability to compete. As the world returns to normalcy, policy makers in the developing world and the developed need to make a concerted effort to ensure these trade links are restored. Globalization has been essential to lifting tens of millions of people to escape extreme poverty, and it would be an unmitigated disaster if we were to allow any of the temporary disruptions to globalization caused by COVID-19 to become permanent.
Selected Sources:Catalysts and barriers to cut flower export, R Belwal, M ChalaDiscovery of the flower industry in Ethiopia: experimentation and coordination, Mulu Gebreeyesus, Michiko IizukaAir transport and destination performance-a case study of three African countries (Ethiopia, Kenya and South Africa) , ET NjoyaInformal trading networks in west africa: The mourides of senegal/the gambia and the yoruba of benin/nigeria, S Golub, J Hansen-LewisINTERNATIONAL NETWORKS OF A TRADING DIASPORA : THE MOURIDES OF SENEGAL ABROAD, VICTORIA EBlNNational Trade Policies and smuggling in Africa: the case of the Gambia and Senegal , SS Golub, AA MbayeSenegal Country Study
www.wealthofnationspodcast.com
https://media.blubrry.com/wealthofnationspodcast/s/content.blubrry.com/wealthofnationspodcast/Ethiopia_Senegal_Rwanda-Trade_Barriers.mp3

Ashton Addison [Timestamp: 0:00]
I'm Ashton Addison from EventChain for Investment Pitch Media and FinTech News Network. And today on Blockchain Interviews, we have Pradeep Goel, the CEO of Solve.Care. Pradeep, welcome to the show. It's a pleasure to have you here today.
Pradeep Goel
Thank you, Ashton. It's a pleasure to be here today. I look forward to the conversation.

Ashton Addison [Timestamp: 0:17]
Likewise. I'd love to kick off the interview by having you give a bit of an overview on what is Solve.Care, the goals of your platform, and how you're exactly disrupting the health tech industry.
Pradeep Goel
Well, the fundamental premise of Solve.Care is that we want to offer the patient and provider a better, more direct peer-to-peer communication model that can live inside the compliant and governance model that exists around the world. In simple sense, what we are saying and what we are trying to do is that the current healthcare systems, centralized as they are, fail to serve the needs of the patient and the doctor in a manner that could be fundamentally improved. And if we can use the blockchain and the decentralized model of information management, communication management and transaction management, we apply it to healthcare. We can empower the patient to take better care of themselves, but without being alone in this journey. We can enable the provider with the tools that they need to interact with the patient and with the other healthcare sponsors, such as employer or insurance companies, without becoming data entry clerks. And we can still allow for a proper governance in fact, better governance of healthcare when it is needed, and it is needed in the form of employer-sponsored benefits or government-sponsored benefits or insurance-paid benefits. And the governance layer does not need to be antithetical or orthogonal to the interest of the patient or the doctor. So we're trying to achieve the impossible, which is to align the interests of the patient and the doctor and the healthcare administrator, as opposed to having them work against each other because the business model and the technology infrastructure that is in place today is designed to make them adversarial to each other. And in doing so, we believe that patient should be at the heart of the healthcare journey. Who are we really caring about here? The patient. Is healthcare meant to be about administrative processes, or is it meant to be around financial processes, or is it really meant to be around making the patient well, or keeping the patient well or getting them back to work quickly? And we seem to have built a lot of processes and systems over the last three, four, five decades, that seemed to think about the patient as an afterthought. So addressing the patient, putting the patient at the center of the healthcare journey, giving them control and making them a sovereign decision maker, rather than a beneficiary of healthcare benefits--that's the vision behind Solve.Care.

Ashton Addison [Timestamp: 2:48]
That's a great intro, Pradeep. So Solve.Care seems to be doing pretty well, and I'm curious on the effects of, so far through 2020, you know we've had this health pandemic. Have you seen an uptick in interest in patients and health care practitioners getting involved with Solve.Care throughout this year?
Pradeep Goel
Absolutely. The pandemic has reshaped business and life as we know it. And I think the future is more uncertain than clear. But what we have seen is a shift. We have seen a shift towards care delivery and efficiency of care delivery. But we have also seen a shift towards protecting the physician, giving the physician more tools to be an effective physician. And we have also seen the physicians gravitate towards adopting technology faster and more aggressively than they perhaps would have in normal circumstances. So there is a disruption in the healthcare delivery model. You know, we have heard about stories about either the hospitals are full, but there's a converse story--the hospitals are also empty. Because the people are afraid to go to the hospital and get care that they would have normally gotten care. We are seeing massive delay in normal care delivery cycle. Of course, the hospitals may be full, emergency rooms might be full with COVID-19 patients, but in terms of regular procedures that are needed to keep patients healthy and keeping them alive and keeping them safe, those procedures have all taken a backseat. So there is a huge disruption to the healthcare delivery model. We are seeing some return to normalcy, but not really. Compared to what it used to be, the current healthcare delivery system is delivering a fraction of the services they used to deliver, you know, only a few months ago. So the need hasn't changed, but the delivery model has been disrupted. So what does that mean for Solve.Care? So we are a platform. And our platform is a decentralized platform that allows patient, doctor, other stakeholders in healthcare delivery, finance and governance model, or the ecosystem to interact with each other in a proper secure and governed manner. So we were able to quickly pivot our platform's use cases from the past delivery model to a new delivery model. So example of that would be more [...] in the future. So we are seeing a different kind of demand. The demand is intense and it's different. And it is a testimony to a well-designed, decentralized platform like ours that we could pivot within weeks from the old delivery model to the new delivery model.

Ashton Addison [Timestamp: 5:24]
As a decentralized platform and a global operation, how do you deal with the different workings of the healthcare industries internationally, you know, with Eastern Europe and the UK and United States? They must have dramatically different health care protocols.
Pradeep Goel
Absolutely. The whole notion is that whatever we do in healthcare must be reliable, fact-based, evidence-based and auditable, and one of the most amazing things about using a decentralized blockchain-type fabric is that we can take and configure both the healthcare and the benefit protocol, and allow it to be transparent for every participant in the network to verify that the network is operating in a manner that is supported by evidence of clinical guidelines or corporate rules or the local and regional and country protocols. So, it is different, in the sense that there are nuances to each country and each region that is governed by local authorities or national authorities, but we allow that to be transparent and configurable, and therefore, it is relatively more safe and it's actually a lot more safe. And it's relatively easy for us to go into a different country, configure the protocol to their specification and give them the sense of comfort whoever that needs to be assured be it the insurance commissioner or the health association or the medical society or the diabetes, you know, governance organization. These organizations are able to quickly verify that an immutable but transparent protocol is in play that they can get behind. So long and short of it is healthcare is local like politics, but the platform is designed to be very, very population needs specific. So depending on the need of a population be it in Nigeria or in Nogales, Arizona, we can configure the healthcare protocol for that country, for that disease, and for that population group.

Ashton Addison [Timestamp: 7:22]
Very cool. And I know that Solve.Care has a couple of different solutions that they're working on, but I saw that you recently launched the Global Telehealth Exchange. So congratulations to that. Could you talk a little bit about the Health Exchange? Are there any requirements for patients to use the Exchange and is it available on all kinds of devices already?
Pradeep Goel
So the Global Telehealth Exchange is a very, it goes back to my previous comment that the delivery model has been disrupted and is rapidly evolving, and I think it'll evolve for the better. We are clearly seeing evidence of that. We are seeing the physicians become more online and deliver more telehealth. We are seeing patients demand immediate and better access to physicians not just who are locally and geographically accessible, but who are accessible based on their skill and their availability and cost. So we decided that as we look ahead and we look at the future of healthcare delivery model, we know that while the old model has a lot of value to add, we can add tremendous new value by allowing a greater patient access and a greater physician self-administration. So there are three fundamental goals behind the Global Telehealth Exchange, which is just another network on our platform. So we can configure very different styles and network and GTHE as we call it, the Global Telehealth Exchange is another network. And in this network, we are allowing for patient to have visibility into which physician, based on skill, language, availability and cost, might suit their needs. That's why it's called the Exchange. Physicians can publish a certain avatar, a digital avatar of their skills and their qualifications and their cost and their requirements to be able to deliver care, be it regional, or be it global avatar. Depending on how the physician has published their regional, national, or global avatar, that avatar can match with the patient's needs. And the Exchange does that automatically based on very sophisticated algorithms. And those algorithms take into account various factors: Who is the patient? Where's the patient located? What is the need? What's the urgency of the need? How much? What is their cost tolerance? Are they paying or is it subsidized? And we match that to the available avatars of physicians automatically. And then we facilitate the entire process of healthcare delivery in the sense of requesting an appointment, approving an appointment, reminding the appointment, collecting the payment for the appointment, doing the appointment online, doing the follow-up care, issuing the post-appointment continuity of care, and engaging family members and loved ones of the patient to continue with care as the patient is remote and likely at home. So we have built this entire ecosystem with the patient in the center of it. But our mantra is actually quite simple. We want to bring joy back to medicine for the physician to take them away from the function of being data entry clerks. As a personal anecdote, I just recently took my adult son to a very famous pediatrician. We had a 40-minute appointment with him which it took us about seven months away to get it. Took him seven minutes in the appointment to log into his EMR system. Then most of the time he spent entering the data into the EMR. We spent in terms of interaction, probably eight, nine minutes out of 40 minutes, and he barely had time to talk to my kid. So this is what they shouldn't be doing. We are turning our doctors into data entry clerks and we're forcing them to spend the time behind the screen, not in front of the patient. And we are putting that experience back in the physician's life--that don't worry about the bureaucracy, we'll take care of it all for you. You just practice medicine, which is what you signed up to do. And on the patient side, we're making it easier for them to find the physician. There are lots of rules that apply, depending on where the patient lives and what the avatar of the physician is we had to match it. And then that goes into all kinds of rules and regulations and compliance issues. But ultimately, the vision is that the world is moving towards a more flexible delivery model. And the GTHE platform will accelerate a more flexible care delivery model than we have ever seen in the past.

Ashton Addison [Timestamp: 11:39]
Super interesting, Pradeep. Now this global telehealth is getting competitive, and especially now that with people, you know, on lockdown in certain places, they can just access doctors from their home. What would you say is going to be one of the key success factors for Solve.Care in terms of long term growth and success as a global telehealth provider?
Pradeep Goel
So our business model is that we allow our clients and our partners to sponsor care networks that address clinical needs of a population or administrative needs or telehealth needs. And our value proposition is that when a patient has a Care.Wallet in their hand, they can join as many networks as they need and those networks interact through the Care.Wallet. So having Global Telehealth Exchange, while extremely compelling as a global platform for connecting doctors and patients, we also have Diabetes Care Network; we are designing and building a Mental Health Network; we are looking at a variety of other networks that have already been built or are being built. We have built a network with Uber and Lyft on the non-emergency medical transportation. And all these networks interact, so I as a patient get to choose which network services I need across all these network sponsors. And that's very powerful. So while we see the Global Telehealth Exchange as the matchmaking ground for doctors and patients worldwide, and break down all kinds of administrative and logistical barriers, that's just one part of the equation. The other part of the equation is, based on the needs of the patient clinically, financially, administratively, they can also connect into all the other networks and all of those networks become my personal ecosystem of care. So we see that our long term future will center around better access for the patient and sovereignty and control over their data; much more efficient and enjoyable experience for the provider where we can put the smile back on their face in terms of practicing medicine and taking care of their patients; and eliminating a tremendous amount of administrative cost and friction. But ultimately, what's the goal? It's not to save money. It's to make the patient healthier. It's for you and I to stay healthy, and for our parents, when they do need care, to get it quickly and effectively and get back to their life. So as long as we remember what this is all about--this is about making an impact on humanity, rather than just fixing a part of the problem. So I always tell my team this: what we have started is a journey that will outlive all of us. We are going to shepherd it. We'll be the custodians of this journey. But many generations ahead have to keep working on this, but we are putting in the foundation of a complete transformation of healthcare.

Ashton Addison [Timestamp: 14:24]
Incredible, Pradeep. And if there are patients or health care providers, or just any community members that are looking to learn more about Solve.Care, what's the best way for them to get involved?
Pradeep Goel
So we have a lot of presence online. We have, of course, our website. We have a very active community of patients, doctors and enthusiasts on Telegram Solve.Care channel. We have certainly our Facebook, Twitter, LinkedIn feeds, but I think the easiest way to get involved is to reach out to us. And whether you are a physician looking to practice medicine more effectively and more enjoyably, or you're a patient looking for ways to care for yourself and your loved ones better, or you are a healthcare administrative organization wanting to take better care of your population, be it Medicare or Medicaid or NHS or large insurance company or a large multinational trying to take care of your employees or small employer with 10 employees that you want to take better care of, we have care networks that can fit your specific need. And if we don't have one, we will sit with you and we'll design one. But there is tremendous potential to work together. And Solve.Care sees itself as a platform equivalent to other large technology platforms like Salesforce which enable proper commerce. And we are enabling proper care. So in some ways, you can look at the parallel between Solve.Care platform and other global understood and used platforms and recognize that we are building the equivalent of that in healthcare.

Ashton Addison [Timestamp: 15:54]
That's great, Pradeep. Well, I will leave those links in the description box below. Thank you so much for your time. And learning about Solve.Care, it's been truly a pleasure. All the best with the platform moving forward, and let's follow up in the near future.
Pradeep Goel
Thank you very much. It's a pleasure to be here. And I hope everyone stays safe and takes care of themselves, and we look forward to being back in the future. Thank you, Ashton.

https://preview.redd.it/8kgx3u4eejl51.png?width=1019&format=png&auto=webp&s=b0cbceff02a707287a70dc1597ea623d4b8b04b6

Since the beginning of the COVID-19 pandemic, economies throughout the world have been suffering as strict lockdown policies and massive drops in aggregate demand have created the sharpest economic contraction since the great depression. Sub-Saharan Africa has been hit especially hard, with imports falling by 21% and exports by 36% since the beginning of the crisis. Sub-Saharan Africa has historically been only weakly connected to the global trading system. The overwhelming majority of African nations exports have long either been natural resources or low value agricultural commodities. A few African nations have seen the beginnings of rapid trade growth allowing parts of Africa to begin escaping the cycle of underdevelopment. However, the COVID-19 pandemic has created severe disruptions to global supply chains threatening long term damage to these economies. In part one of today’s podcast episode, I will discuss how the collapse in global air travel has hit Ethiopia’s air transportation and cut flower industry hard. In part two, I will discuss how the barriers to human mobility, especially across borders has cut into the trade network of Senegal’s Mouride Brotherhood. Finally, in part three of the podcast episode I will discuss rising trade barriers and how they threaten industries such as Rwanda’s nascent export oriented ready made garment industry.
Ethiopian Airlines was founded as a joint partnership with an American airline and the Ethiopian government in 1945. Through Ethiopia’s dark history of poverty, famine and war Ethiopian Airlines remained one of the most constantly functioning institutions in the country. Since the beginning of Ethiopia’s economic boom in the early 2000s, Ethiopian Airlines has evolved into the most profitable airline in sub-Saharan Africa, $2.6$2.6) billion in revenues $260 million in profits in 2019. Moreover, the government has invested heavily in the country’s air infrastructure. In 2008, Bole International Airport, the primary airport if Addis Ababa, was the 13th busiest airport in Africa. Since then air traffic has increased 4-fold since then, turning Bole International Airport into the third busiest airport in Africa. As a result, Ethiopia is one of the best connected nations in Africa, and air travel within Ethiopia is relatively cheap and convenient. Air transportation has deep linkages to the rest of the Ethiopian economy beyond the $3.6 billion in foreign exchange it generates for the country.
Ethiopia is a landlocked country, with most of the nearest ports controlled by geostrategic enemies and unstable nations. As a result, air cargo plays an important role in Ethiopia’s economy, especially for the export of cut flowers. Ethiopia’s high altitude and tropical location gives it ideal year round mild weather perfect for growing flowers. However, cut flowers lose 15% of their value every day after being cut, and are only profitable if flown. Although Ethiopian airlines has invested in specialized air freight cargo planes, all of Ethiopia’s cut flowers were flown in passenger planes, and nearly half of cut flowers continue to do so. The cut flower industry, which generates nearly $300 million in revenues a year and employs over 100,000 people, has been severely disrupted by COVID-19. Ethiopia moved fast to close Ethiopian borders, practically ending all international passenger flight to Ethiopia. The effects on the cut flower industry were severe, costing the cut flower industry $25 million, and Ethiopians to waste flowers as compost. COVID-19 has had a severe impact on every industry dependent on air cargo as a huge share of air shipments continue to rely upon regular passenger flights.
The movement of people has been even more hindered by COVID-19 than the movement of goods. As a result, COVID-19 has had an especially hard impact on international trade mediated trough trade diasporas, such as that of the Mouride Brotherhood. The Mouride Brotherhood was founded in 1883 by Amadou Bamba. One of its most distinctive features is the emphasis the Mouride Brotherhood places on hard work. Until the 1980s, this manifested itself as disciples, or Talibes, working for long hours without pay on peanut farms operated by the Marabouts, or spiritual leaders of the Mouride Brotherhood. However, environmental degradation since the 1980s forced large numbers of Mourides to migrate to cities, and foreign nations. The Mourides creation new organizational structures to replace the agricultural cooperatives known as Dahiras, regular prayer meetings, where Marabouts gathered donations from disciples to provide social insurance for Mourides and fund charitable works. However, urban Dahiras served a secondary function where information about business opportunities easily spread, bonds of trust were built between Mourides, and assistance provided to newcomers to cities to start their own businesses.
The Dahiras helped turn the Mourides into a commercial force in Senegal. Members of the Mouride Brotherhood today controls peanut trade, transportation, real estate, and smuggling networks in and out of Senegal. Moreover, the Mourides have emerged as a powerful trading diaspora outside of Senegal. Mourides make up a vastly disproportionate share of the street vendors in New York City, and the tourist sites of Europe. These street vendors are connected by a network of Mouride wholesalers spanning the world buying goods at the cheapest prices. Members of the Mouride brotherhood benefit from Kara International, a money transfer system operated by Mourides to make it possible for entrepreneurs to deposit, withdraw and transfer money across the world while the strong bonds of trust within the Mouride Brotherhood allow for small businessmen receive loans without collateral. The trading system of the Mouride Brotherhood rely upon constant interaction and travel. The regular meeting of Dahiras, essential for building trust, have been forced online by COVID-19. The tourism industry that the Mourides depend upon has completely collapsed due to lockdown policies. Mouride wholesaler merchants in China have faced growing harassment during China’s lockdown, while travel between markets made impossible. The informal Mouride financial networks rely upon individuals physically transporting cash between nations. In a thousand ways, the policies necessary to contain COVID-19 create frictions that hinder the smooth operation of the Mouride trade network.
Many threats to trade in African trade predate COVID-19. There is a growing mood of protectionism due to Donald Trump’s trade war, and since COVID-19 otherwise globalist leaders such as Biden, and Macron have called for supply chains to be localized. However, infant industries from least developed countries such as Rwanda are the most vulnerable to such protectionist moves. Rwanda has consistently been one of the fastest growing countries in the world since the 1994 genocide. However, one of the major obstacles to continued rapid economic growth in Rwanda is its isolation from global markets. Rwanda is a densely populated and landlocked nation, reliant on the export of tea and coffee. One area where Rwanda has had substantial success in diversification is in its ready made garment industry. Between 2008 and 2018, exports of clothing from Rwanda increased from 344,000 to $7.7 million, taking advantage of the low cost of Rwandan labor and easy access to high quality leather.
One of the key reasons for the success of Rwanda’s RMG industry was duty free access to American markets through the African Growth and Opportunity Act (AGOA), which gives duty free access to non-traditional exports from African nations. However, tariff free access to the United States is dependent upon political conditions in Rwanda and the United States. In 2018, the East African Community, which Rwanda is a part of, voted to band the import of used clothing. In 2017, East Africa imported $274 million of used clothing, with 67% of the population purchasing used clothes. However, a desire to promote infant industry and elite embarrassment at poor people wearing castoffs caused the East African Community to ban the import of used clothing. Donald Trump and US trade negotiators, making a problematic situation disastrous, moved to remove AGOA trade preferences from East Africa. While most EAC countries backed down from the used clothing ban, Rwanda didn’t to devastating effects to its clothing industry. US imports of Rwandan clothing declined by 60% , and overall exports by 26%. While trade barriers are harmful to all involved, the damage is greatest to least developed countries.
International trade is essential for least developed nations such as Ethiopia, Senegal and Rwanda to escape from poverty. However, COVID-19 and a rising mood of protectionism threaten Africa’s ability to compete. As the world returns to normalcy, policy makers in the developing world and the developed need to make a concerted effort to ensure these trade links are restored. Globalization has been essential to lifting tens of millions of people to escape extreme poverty, and it would be an unmitigated disaster if we were to allow any of the temporary disruptions to globalization caused by COVID-19 to become permanent.
Selected Sources:Catalysts and barriers to cut flower export, R Belwal, M ChalaDiscovery of the flower industry in Ethiopia: experimentation and coordination, Mulu Gebreeyesus, Michiko IizukaAir transport and destination performance-a case study of three African countries (Ethiopia, Kenya and South Africa) , ET NjoyaInformal trading networks in west africa: The mourides of senegal/the gambia and the yoruba of benin/nigeria, S Golub, J Hansen-LewisINTERNATIONAL NETWORKS OF A TRADING DIASPORA : THE MOURIDES OF SENEGAL ABROAD, VICTORIA EBlNNational Trade Policies and smuggling in Africa: the case of the Gambia and Senegal , SS Golub, AA MbayeSenegal Country Study
www.wealthofnationspodcast.com
https://media.blubrry.com/wealthofnationspodcast/s/content.blubrry.com/wealthofnationspodcast/Ethiopia_Senegal_Rwanda-Trade_Barriers.mp3

Since the beginning of the COVID-19 pandemic, economies throughout the world have been suffering as strict lockdown policies and massive drops in aggregate demand have created the sharpest economic contraction since the great depression. Sub-Saharan Africa has been hit especially hard, with imports falling by 21% and exports by 36% since the beginning of the crisis. Sub-Saharan Africa has historically been only weakly connected to the global trading system. The overwhelming majority of African nations exports have long either been natural resources or low value agricultural commodities. A few African nations have seen the beginnings of rapid trade growth allowing parts of Africa to begin escaping the cycle of underdevelopment. However, the COVID-19 pandemic has created severe disruptions to global supply chains threatening long term damage to these economies. In part one of today’s podcast episode, I will discuss how the collapse in global air travel has hit Ethiopia’s air transportation and cut flower industry hard. In part two, I will discuss how the barriers to human mobility, especially across borders has cut into the trade network of Senegal’s Mouride Brotherhood. Finally, in part three of the podcast episode I will discuss rising trade barriers and how they threaten industries such as Rwanda’s nascent export oriented ready made garment industry.
Ethiopian Airlines was founded as a joint partnership with an American airline and the Ethiopian government in 1945. Through Ethiopia’s dark history of poverty, famine and war Ethiopian Airlines remained one of the most constantly functioning institutions in the country. Since the beginning of Ethiopia’s economic boom in the early 2000s, Ethiopian Airlines has evolved into the most profitable airline in sub-Saharan Africa, earning $2.6 billion in revenues $260 million in profits in 2019. Moreover, the government has invested heavily in the country’s air infrastructure. In 2008, Bole International Airport, the primary airport if Addis Ababa, was the 13th busiest airport in Africa. Since then air traffic has increased 4-fold since then, turning Bole International Airport into the third busiest airport in Africa. As a result, Ethiopia is one of the best connected nations in Africa, and air travel within Ethiopia is relatively cheap and convenient. Air transportation has deep linkages to the rest of the Ethiopian economy beyond the $3.6 billion in foreign exchange it generates for the country.
Ethiopia is a landlocked country, with most of the nearest ports controlled by geostrategic enemies and unstable nations. As a result, air cargo plays an important role in Ethiopia’s economy, especially for the export of cut flowers. Ethiopia’s high altitude and tropical location gives it ideal year round mild weather perfect for growing flowers. However, cut flowers lose 15% of their value every day after being cut, and are only profitable if flown. Although Ethiopian airlines has invested in specialized air freight cargo planes, all of Ethiopia’s cut flowers were flown in passenger planes, and nearly half of cut flowers continue to do so. The cut flower industry, which generates nearly $300 million in revenues a year and employs over 100,000 people, has been severely disrupted by COVID-19. Ethiopia moved fast to close Ethiopian borders, practically ending all international passenger flight to Ethiopia. The effects on the cut flower industry were severe, costing the cut flower industry $25 million, and Ethiopians to waste flowers as compost. COVID-19 has had a severe impact on every industry dependent on air cargo as a huge share of air shipments continue to rely upon regular passenger flights.
The movement of people has been even more hindered by COVID-19 than the movement of goods. As a result, COVID-19 has had an especially hard impact on international trade mediated trough trade diasporas, such as that of the Mouride Brotherhood. The Mouride Brotherhood was founded in 1883 by Amadou Bamba. One of its most distinctive features is the emphasis the Mouride Brotherhood places on hard work. Until the 1980s, this manifested itself as disciples, or Talibes, working for long hours without pay on peanut farms operated by the Marabouts, or spiritual leaders of the Mouride Brotherhood. However, environmental degradation since the 1980s forced large numbers of Mourides to migrate to cities, and foreign nations. The Mourides creation new organizational structures to replace the agricultural cooperatives known as Dahiras, regular prayer meetings, where Marabouts gathered donations from disciples to provide social insurance for Mourides and fund charitable works. However, urban Dahiras served a secondary function where information about business opportunities easily spread, bonds of trust were built between Mourides, and assistance provided to newcomers to cities to start their own businesses.
The Dahiras helped turn the Mourides into a commercial force in Senegal. Members of the Mouride Brotherhood today controls peanut trade, transportation, real estate, and smuggling networks in and out of Senegal. Moreover, the Mourides have emerged as a powerful trading diaspora outside of Senegal. Mourides make up a vastly disproportionate share of the street vendors in New York City, and the tourist sites of Europe. These street vendors are connected by a network of Mouride wholesalers spanning the world buying goods at the cheapest prices. Members of the Mouride brotherhood benefit from Kara International, a money transfer system operated by Mourides to make it possible for entrepreneurs to deposit, withdraw and transfer money across the world while the strong bonds of trust within the Mouride Brotherhood allow for small businessmen receive loans without collateral. The trading system of the Mouride Brotherhood rely upon constant interaction and travel. The regular meeting of Dahiras, essential for building trust, have been forced online by COVID-19. The tourism industry that the Mourides depend upon has completely collapsed due to lockdown policies. Mouride wholesaler merchants in China have faced growing harassment during China’s lockdown, while travel between markets made impossible. The informal Mouride financial networks rely upon individuals physically transporting cash between nations. In a thousand ways, the policies necessary to contain COVID-19 create frictions that hinder the smooth operation of the Mouride trade network.
Many threats to trade in African trade predate COVID-19. There is a growing mood of protectionism due to Donald Trump’s trade war, and since COVID-19 otherwise globalist leaders such as Biden, and Macron have called for supply chains to be localized. However, infant industries from least developed countries such as Rwanda are the most vulnerable to such protectionist moves. Rwanda has consistently been one of the fastest growing countries in the world since the 1994 genocide. However, one of the major obstacles to continued rapid economic growth in Rwanda is its isolation from global markets. Rwanda is a densely populated and landlocked nation, reliant on the export of tea and coffee. One area where Rwanda has had substantial success in diversification is in its ready made garment industry. Between 2008 and 2018, exports of clothing from Rwanda increased from 344,000 to $7.7 million, taking advantage of the low cost of Rwandan labor and easy access to high quality leather.
One of the key reasons for the success of Rwanda’s RMG industry was duty free access to American markets through the African Growth and Opportunity Act (AGOA), which gives duty free access to non-traditional exports from African nations. However, tariff free access to the United States is dependent upon political conditions in Rwanda and the United States. In 2018, the East African Community, which Rwanda is a part of, voted to band the import of used clothing. In 2017, East Africa imported $274 million of used clothing, with 67% of the population purchasing used clothes. However, a desire to promote infant industry and elite embarrassment at poor people wearing castoffs caused the East African Community to ban the import of used clothing. Donald Trump and US trade negotiators, making a problematic situation disastrous, moved to remove AGOA trade preferences from East Africa. While most EAC countries backed down from the used clothing ban, Rwanda didn’t to devastating effects to its clothing industry. US imports of Rwandan clothing declined by 60% , and overall exports by 26%. While trade barriers are harmful to all involved, the damage is greatest to least developed countries.
International trade is essential for least developed nations such as Ethiopia, Senegal and Rwanda to escape from poverty. However, COVID-19 and a rising mood of protectionism threaten Africa’s ability to compete. As the world returns to normalcy, policy makers in the developing world and the developed need to make a concerted effort to ensure these trade links are restored. Globalization has been essential to lifting tens of millions of people to escape extreme poverty, and it would be an unmitigated disaster if we were to allow any of the temporary disruptions to globalization caused by COVID-19 to become permanent.
Selected Sources: Catalysts and barriers to cut flower export, R Belwal, M Chala Discovery of the flower industry in Ethiopia: experimentation and coordination, Mulu Gebreeyesus, Michiko Iizuka Air transport and destination performance-a case study of three African countries (Ethiopia, Kenya and South Africa) , ET Njoya Informal trading networks in west africa: The mourides of senegal/the gambia and the yoruba of benin/nigeria, S Golub, J Hansen-Lewis INTERNATIONAL NETWORKS OF A TRADING DIASPORA : THE MOURIDES OF SENEGAL ABROAD, VICTORIA EBlN National Trade Policies and smuggling in Africa: the case of the Gambia and Senegal , SS Golub, AA Mbaye Senegal Country Study
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Lupine Publishers | Onion (Allium cepa) Production in Urban and Peri-Urban Areas: Financial Performance and Importance of This Activity for Market Gardeners in Southern Benin

Abstract

Introduction

Materials and Methods

Study zone

Methodology

Data analysis

Presentation of the variables included in the model

Results and Discussion

A zoom on onion production and consumption

Source of supply and sector’s actors

The actors in the Value Chain (VC): a multitude of stakeholders

Potential and motivations of onion producers

Socioeconomic and demographic characteristics of the surveyed producers

Financial Performance of onion production

Determinants of onion production profitability

Source: Estimation Results, 2018.

Importance for input suppliers and other service providers

Health and nutritional importance for producers-self consumer

Conclusion

Pulling Up the Drawbridge to Trade: How COVID-19 and Rising Protectionism Are Blocking Trade From Ethiopia, Senegal and Rwanda

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Pulling Up the Drawbridge to Trade: How COVID-19 and Rising Protectionism Are Blocking Trade From Ethiopia, Senegal and Rwanda

Pulling Up the Drawbridge to Trade: How COVID-19 and Rising Protectionism Are Blocking Trade From Ethiopia, Senegal and Rwanda

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