Agriculture contributes over one-third to Africa’s GDP, however, hidden costs amount to a staggering $952.5 billion annually and Eastern Africa faces the highest losses at $264.9 billion.
Although agriculture is often regarded as the foundation of many African economies, accounting for over one-third of GDP, it is also a sector plagued by hidden costs related to agrifood systems, which ultimately drive up food prices.
According to research by the Food and Agriculture Organization (Fao), Africa loses or incurs $952.5 billion a year on problems directly related to agricultural output to feed the world, with eastern Africa bearing the brunt of this loss at $264.9 billion.
The Fao annual State of Food and Agriculture Report, which was published this week includes a presentation of the study, which shows that although agricultural production and consumption seem like straightforward transactions, there are significant hidden costs that are supposedly higher in developing nations than in developed ones.
Historically, nations have overlooked the hidden costs of agriculture, and the GDP losses that come with agricultural production, but these costs are gradually becoming far more significant than the advantages that come from agricultural production.
The UN organization has put a monetary value on the losses brought about by several factors, such as undernourishment, altered land and water usage, greenhouse gas (GHG) emissions from farming, and loss of economic output as a result of “unhealthy dietary patterns.”
According to Fao, the hidden costs associated with food systems are estimated to be worth $12.7 trillion annually globally. This represents around 10% of the world’s GDP, given that agriculture contributes only 4% of it.
According to the analysis, the productivity losses associated with the burden of illnesses brought on by unhealthful eating patterns account for the largest hidden cost of agrifood systems worldwide. These account for around 73% of all hidden expenditures worldwide, or $9.3 trillion annually.
Poor eating habits are the most expensive in Africa, where they cost the continent $391 billion annually and an additional $18 billion in sickness from undernourishment.
Compared to other parts of the world, Africa’s agrifood systems bear the second-highest hidden cost: the loss caused by the poverty of agrifood workers, which accounts for $284.8 billion, or almost 30% of all hidden costs, annually on the continent.