Horn of Africa Livestock Export Trade — A business at a crossroads

The $1.5 billion Horn of Africa (HoA) livestock export industry is at a cross-road. The choices are clear but the outcome remains in doubt.(1) Particularly for Somalia.

Resurgence of Trade Bans

In October 2015, after multiple warnings and at least one Ministerial Decree, the UAE made a decision to ban livestock import from Somalia due to the continual and recurrent spread of livestock disease from the Somali livestock export quarantines whose express purpose is to ensure that diseased livestock are not exported. In an October 2015 meeting that I held with Ministry officials, they made it clear that this ban is not likely to end soon.

This is not about politics, but the spread of disease to importing countries. In this case, there’s no geopolitical forces here operating against Somalia and the HoA’s pastoralists. It’s simply a desire to protect the consumers and livestock of the importing country. Why have the quarantines failed? The Somali quarantines are largely controlled by large international livestock trade companies. These companies have formed partnerships with Somalis on the ground which is notable and can provide the impetus for a solution. However, there are severe conflicts of interest in quarantine operations which result in the spread of disease. A veterinarian who works for the quarantine-owning livestock trader is under pressure to ship as many head of livestock as possible and as a result is likely to bend under this pressure and uninspected or diseased livestock can be exported. This has happened repeatedly since the establishment of the first quarantine which I designed and built in Djibouti.

The original vision was to have an independent inspection service manage and operate the quarantine, but politics ruled the day and soon it was livestock traders who controlled the Djibouti quarantine, and who subsequently built several others in Somalia, all of which have staff who they hire and who report to them performing livestock inspections at the quarantines.(2)

A ban from the UAE is on its own, not such a big deal. The market is rather small, absorbing several hundred thousand heads a year. But it is an indicator of a sick business—in urgent need of repair. The Kingdom of Saudi Arabia, by far the largest importer of Somali, Ethiopian, Djiboutian, and Sudanese livestock has expressed repeated verbal and written concern both in public fora and through diplomatic channels and has urged the Federal Government of Somalia and quarantine operators to implement a solution to this situation.

Rift Valley Fever — a disaster about to happen?

Livestock import bans by Saudi Arabia and others could be hastened if Rift Valley Fever epizootic ( 3 ) becomes a reality as anticipated during the current El Niῆo event hitting the HoA as this article goes to press. Epizootics are caused by the hatching of mosquito eggs which harbor the RVF virus in flood plains. When the mosquitos mature, they bite both livestock and humans and transmit the virus which causes the disease. The hatching of the eggs is precipitated by floods caused by the combination of high eastern Pacific and western Indian ocean sea surface temperatures which trigger an El Niῆo event in the Horn of Africa. This year, the Pacific oceans’ temperatures are higher than they’ve been in 20 years. The Indian Ocean temperatures are also more than 1C higher than normal (4). Epizootics of RVF tend not to occur unless livestock herd immunity is sufficiently low, thus approximately 6 years is the minimum time between epizootics. It has now been 7 years since the last RVF epizootic which occurred in 2007 – 2008 in the HoA. Floods are bad enough, but its RVF that causes severe disruptions in livestock export trade. For an epizootic to occur there must be extensive flooding in a locale where RVF has previously occurred. Therefore, despite the presence of an El Niῆo, an RVF epizootic is not a sure thing.

The disease is native to Africa and spread to the Arabian Peninsula which experienced its first epizootic in 2000–2001 killing more than 300 people in Saudi Arabia and Yemen. This precipitated fear-based and reactionary livestock import bans including from Saudi Arabia which lasted for years, even though there was no current epizootic of RVF in the Horn of Africa.

A serious outbreak or epizootic of RVF in the HoA will almost certainly result in bans by import GCC countries which could be lasting, effectively crippling the economy of Somalia and forcing a return to the days of the past when black market trade prevailed. In fact, it could seriously affect Somalia’s recovery and reverse the country’s growing peace and stability since 50% of the Somali economy and 60–70% of its foreign exchange earnings are based on livestock export trade. Due to the current situation in which livestock disease has been regularly imported from the HoA, if a ban is placed due to RVF, it is likely to last until proper systems are in place in the exporting countries which ensure freedom from disease and which are sufficiently robust to be able to provide proof that each individual animal livestock shipped is healthy and disease-free. (5)

Rocket Scientists need not apply

There’s no need for Rocket Science to create a viable solution. However, what is required is rock solid integrity, top-tier professional management, secure, tamper proof systems and most importantly, independent livestock export quarantine operations and management. In this case, independent means independent of livestock traders and operating under government supervision with adherence to World Animal Health Association (OIE) standards. Livestock exporters have no business inspecting their own livestock and declaring them to be disease free. Governments can fill this role, but then when there are problems and disease is exported the only recourse for the importers is to ban import from that country.

An independent livestock trade service provider is therefore the best solution. Working under government supervision, the company can be sanctioned and held accountable should it export diseased livestock. If the company has repeated infractions, it can be replaced. This simple separation of roles and responsibilities improves corporate governance gives importing countries confidence that the government is in control and serious about ensuring disease export is stopped once and for all. Fortunately, the governments of the region, including the central government in Somalia as well as that of Kenya see this approach as a viable solution. What is needed to make it happen is two things: 1) a strong support from HoA governments and 2) far-sighted private investment.

Future Opportunities in the livestock and meat export sector. The livestock export industry is the lifeblood of the 17 million pastoralists throughout the HoA region. For right minded investors, the opportunities abound. Global demand for meat and livestock is at an all-time high and is currently in a growth phase the likes of which have never been seen. The live animal import market in the GCC and ME is expected to grow by 6 – 7 million head annually over the next 10 years. And globally, as people move from poverty to middle class, they change their diet from one of plant-based protein to meat. The OECD points out that with globalization and the increasing benefits of information technology boom, the middle class is growing like never before. There were 1.8 billon middle class in 2009 and they are expected to reach 4.9 billion people by 2030—an increase of over 3 billion middle class largely meat eating people in the space of only 20 years! A Bright Future if we do our part now

The greater HoA region with its vast livestock population of nearly 300 million head (including Sudan) shows enormous promise for development and value addition, bringing billions of dollars and supporting millions pastoral livelihoods in HoA nations, provided the export trade in livestock and meat can be responsibly and professionally managed so that we protect our importing partner countries.

Returns on an investment to ensure disease-free trade and add value to livestock in the Horn of Africa are robust with IRRs running 30 – 40%. In addition, there is a strong social bottom line so this represents an exceptional opportunity to do well by doing good.(6)

Finally, disease-free livestock export trade can keep the failed state of Somalia back on the road to recovery making this truly the end of a beginning with a bright future and increased economic stability and security for generations to come.

1. Estimated value of the trade is derived from livestock export trade volume data supplied or produced by Intergovernmental Authority on Development (IGAD), UN Development Program (UNDP), and UN Food and Agriculture Program (FAO) and using historic average sale prices in the Gulf Cooperation Council (GCC) region.

2 . Under World Animal Health Organization (OIE) protocol, final approval for livestock export rests with the nation’s Head of national Veterinary Services who is generally the nation’s delegate to the OIE and who must issue an official Government Veterinary Export Certificate certifying the conditions and procedures followed to ensure freedom of disease prior to livestock export and that the livestock do not have diseases of concern to the importing country.

3 . An epizootic is an epidemic outbreak of disease in an animal population, often with the implication that it may extend to humans. MedicineNet.com http://www.medicinenet.com/script/main/art. asp?articlekey=14877

4. Global Ocean Monitoring: Recent Evolution, Current Status, and Predictions. Climate Prediction Center, NCEP/NOAA. October 9, 2015 http://www. cpc.ncep.noaa.gov/products/GODAS

5. During the last several years, Australia has not exported livestock to Saudi Arabia due to the failure of the Kingdom to sign the Australia Exporter Supply Chain Assurance System (ESCAS) protocol. However, the ESCAS protocol is undergoing change and it is anticipated that exports from Australia to Saudi Arabia might begin once again soon. This development could possibly be hastened by a ban on the HoA.

6 . An IGAD Region Nutrition Security Assessment performed in part by the author, revealed that the best nutrition indices for children between 6 months and 2 years of age in the 8 country IGAD region were among Somaliland and Puntland pastoralists in Somalia. These two regions have exported most of the livestock from Somalia and the rates of stunting among their pastoral populations have declined significantly since the legal livestock export trade resumed in 2007 with the advent of modern livestock export quarantines. UN data indicate that rates in 2014 were approaching developed country rates.

Dr. Chip Stem,
CEO Livestock Trade Services, Ltd.
cstem@LivestockTradeServices.com and cstem1@gmail.com

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