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Digital Subscriptions > Cities Today > The State of African Cities 2018 > Chapter 7 FDI and the African Food Security Paradox

Chapter 7 FDI and the African Food Security Paradox

Africa suffers from a food security paradox in that there are insufficient food supplies in a continent with a very high potential for food production
One-third of all child deaths globally are due to malnutrition

Food security exists when all people at all times have physical, social and economic access to sufficient, safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life (World Food Summit, 1996). The concept covers four dimensions: a) physical availability of food (supply and demand); b) economic and physical access (affordability and preference); c) food utilization (nutrition); and d) food stability (sustainability) over time. Several factors, such as low productivity, economic shocks, political instability and poor weather conditions can affect these dimensions (FAO, 2008).

Food insecurity is one of Africa’s ruthless ails associated with prevailingly high levels of poverty and health problems that have persisted for decades. Acknowledging the lack of resources in the food sector, African governments are increasingly encouraged to attract FDI to improve food security. The present section explores the African food security paradox of insufficient food supplies in a continent with a very high food producing potential. To this end, this study examines the bearing FDI has upon the Food Security Index (FSI) by comparing its impact at the global level to that of Africa. The FSI is a normalized score based on 28 unique indicators developed by the Economist Intelligence Unit, using three parameters: availability, affordability, and quality of food (nutrition). These three food security parameters are generally accepted in food security literature on African countries.

To this end, the effect of total FDI and food FDI (investments particularly in the food sector) upon the overall FSI is tested at both geographic scales. The same analysis is carried out at a deeper level for the FSI sub-indicators affordability, availability, and quality/ safety. For all statistical models, control variables were also included, i.e. agricultural exports, improved sanitation facilities, agricultural import tariffs and the Food Production Index.

Africa has a comparative advantage in the global economy with its vast tracks of arable land, seasonal rainfall and semi-skilled labour in agriculture. Despite these advantages, the continent has struggled with food insecurity for decades. Emerging and pressing threats to food security have been amplified by poverty, rapid urbanization, population growth, food price-hikes, conflict and civil strife, misguided policies, weak institutions and failing markets, climate change, and reduced productivity and investments (Kwasek, 2012; Africa Human Development Report, 2012; SFIW, 2015).

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About Cities Today

The State of African Cities 2018 is published by IHS-Erasmus University Rotterdam and UN-Habitat in partnership with the African Development Bank. The aim of the report is to contribute to development policies that can turn African cities into more attractive, competitive and resilient foreign direct investment (FDI) destinations. Attracting global FDI is highly competitive and crosses various geographic scales, therefore regional cooperation by cities and nations is critical. But FDI is not a panacea since it has both positive and negative effects and careful choices need to be made by cities in their pursuit of FDI, if it is to lead to inclusive economic growth. This report aims to provide guidance on these choices and to facilitate understanding of the complexity of global investment in Africa.