Malawi: Maize Prices in Kenya and Malawi Have Soared, but Tanzania’s Haven’t – Economists Explain Why

Malawi: Maize Prices in Kenya and Malawi Have Soared, but Tanzania’s Haven’t – Economists Explain Why

For more than a year maize prices in Kenya and Malawi have been much higher compared with other countries in the east and southern Africa (ESA) region.

Several factors explain this.

In Malawi, high fertiliser prices which resulted in lower fertiliser usage affected maize supply. This was compounded by adverse weather and trade bans, leading to lower-than-usual production.

In Kenya, high maize prices have been driven up by excessive margins. Sellers are charging prices that are more than the import parity price – the maize price from surplus producing countries, plus transport costs for importing into Kenya.

This is particularly concerning for a country with about 1.2 million of the population facing acute food insecurity.

We are economists at the African Market Observatory, which monitors prices of staple foods and conducts research on market dynamics, including market concentration and barriers to entry, within and across countries in ESA. The analysis is complemented through in-depth field work.

Maize grain prices in selected east and southern African countries (Fig 1)

Maize is the leading staple food in the region. It is commonly traded across borders to meet overall regional demand. Tanzania is the leading producer of non-genetically modified maize and exports to other countries in the region. Since 2023, Tanzania has become an important source of maize exports to the region with bumper harvests due to above average rainfall.

Malawi generally produces enough to meet its requirements while Kenya has consistently been a net importer of maize due to the large population.

If maize markets were working well, the prices in both Kenya and Malawi would consistently reflect the prevailing prices in surplus-producing countries in the region, such as Tanzania, in 2023 and 2024. Competition authorities should take a regional approach to ensure that markets are working well in terms of pricing and trade.

This would entail monitoring markets, assessing barriers to regional trade, and intervening in cases of anti-competitive conduct.

Malawi’s poor harvest

Malawi is typically able to exceed its annual maize requirements of around 3.1 million tonnes. But the country had a poor harvest in 2023. This has been linked to low fertiliser supplies and use in 2022.

The use of fertiliser increases the amount of crop harvested per area of land (crop yield). In May 2022, there was a significant increase in the prices of fertiliser (such as urea) in Malawi due to supply shocks that increased prices across the world. The world prices subsequently declined while fertiliser prices in Malawi remained high, and in general fertiliser prices in the country have been higher than in its neighbouring countries. When compared with five other countries in the region (including Zambia and Kenya), Malawi had the highest fertiliser prices and mark-ups.

Faced with high prices, farmers bought less fertiliser. Fertiliser imports in 2022 were around half of the 2021 volumes (Figure 2).

Delays in fertiliser procurement through Malawi’s Affordable Input Programme added to the problem. The government programme typically provides 250,000 tonnes of fertiliser on a subsidised basis to 2.5 million households.

Some parts of Malawi were hit by Cyclone Freddy in March 2023. But this only affected 440,000 acres (178,061 hectares) of crops. By our estimates, this accounted for about 10% of the overall crop production area.

This means that much of the poor harvest in 2023 was linked to low fertiliser usage.

Malawi fertiliser imports, by year (Fig 2)

Tanzania, for its part, has had a good harvest with an estimated 4 million tonnes of excess maize this year. This is seven times the projected import requirements for Malawi in 2024 and is enough to cover the region’s overall deficit.

If regional markets were working as they should, the price of maize in Malawi would be equal to the price (plus associated import costs) at which maize would be bought from Tanzania. We estimate the import parity price was US$265 per tonne at June 2024 prices. Maize was selling in Malawi for US$433 per tonne, giving a difference of US$168, which is an extra charge, or “excess margin”, of 63%.

The maize price in Malawi is much higher than it would have been had there been normal trading between the two countries.

Kenyan maize dynamics

Kenya’s maize production between 2020 and 2022 averaged almost 3.4 million tonnes per year. To meet its 4 million tonne annual consumption, it has been a net importer of maize.

Kenya imports maize from Tanzania and other countries in the region, including Uganda and Zambia. For instance, in 2023, about 43% (219,260 tonnes) (ITC Trademap)of Kenya’s total maize imports were from Tanzania.

Considering this, Kenya’s maize prices should be similar – that is at import parity levels – to those of its trading partners. But maize prices in Kenya have been much higher than in the rest of the region.

From January 2023 to April 2024 (Figure 3), Kenya’s prices have been marked up substantially above the cost of importing maize from the south-west of Tanzania, which is the maize producing region. In the same period, Kenya’s average price was US$624 per tonne. We calculate the average import parity price as US$359, resulting in average excess margins of about 82% between January 2023 and April 2024.

Kenya’s maize prices (Fig 3)

Most recently, Kenya’s maize price almost halved from over US$600 per tonne in April 2024 to US$315 in May 2024, before increasing to US$374 in June 2024.

This maize price is still above the import parity price from Tanzania at around US$249, meaning that the maize price in Kenya has a 50% excess margin. Overall, Tanzania’s maize prices have been declining since the harvest in April 2023 due to bumper production in 2023 and 2024.

The sharp decline in Kenyan maize prices was likely due to imports from neighbouring countries (such as Tanzania and Uganda) and maize coming on the market that was being hoarded by producers in the hopes of selling maize at higher prices.

This further highlights that maize markets in Kenya are not working well because producers have the ability to distort prices by restricting supply.

The dysfunctional regional markets allow traders and producers to continue to charge higher prices for maize in Kenya. In well functioning regional markets, cheaper maize from neighbouring countries would drive down maize prices in Kenya.

Maize markets in Malawi and Kenya are dysfunctional

Markets in Kenya and Malawi are characterised by excessive margins and high prices for maize and key inputs used in the production of maize. This is made worse by regional markets not working well in terms of pricing and trade.

This requires competition authorities to take a regional approach to monitoring markets and assessing barriers to regional trade and intervene in cases of anti-competitive conduct.

Namhla Landani, Economist at the Centre for Competition, Regulation and Economic Development, University of Johannesburg

Arthur Khomotso Mahuma, Economist and Researcher at the Centre for Competition, Regulation and Economic Development, University of Johannesburg

Source: allafrica.com

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Inside Tanzania’s Life-Saving Birthcare Model
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Inside Tanzania’s Life-Saving Birthcare Model

Inside Tanzania’s Life-Saving Birthcare Model

Tanzania is winning the battle against maternal and newborn deaths, as the latest numbers reveal a significant decline.

“Tanzania is committed to reducing maternal and newborn mortality and ensuring safe deliveries as part of the national development plan. The Safer Births Bundle of Care is one of the key strategies supporting this effort,” said Dr. Benjamin Kamala, the Senior Research Scientist at Haydom Lutheran Hospital and Principal Investigator for the program, leading its implementation across five regions in Tanzania.

A groundbreaking study published in the New England Journal of Medicine shows that the innovative health program in Tanzania – centered on regular, on-the-job training for healthcare workers – reduced maternal deaths by 75% and early newborn deaths by 40%. The three-year study, conducted across 30 high-burden healthcare facilities in Tanzania, tracked approximately 300,000 mother-baby pairs under the Safer Births Bundle of Care (SBBC) programme. The programme focuses on improving care for mothers and babies during the day of birth, the critical time when a woman goes into labor and delivers her baby.

Maternal health is a key focus of the United Nations Sustainable Development Goals (SDGs), specifically Target 3.1, which aims to reduce the global maternal mortality ratio to fewer than 70 deaths per 100,000 live births by 2030.

Tanzania’s program combines continuous, simulation-based training for frontline healthcare workers alongside innovative clinical tools to improve labour monitoring (fetal heart rate monitoring) and newborn resuscitation.It also uses data to drive ongoing improvements, ensuring that healthcare workers have the skills, confidence, and competence to manage birth-related complications for both mothers and newborns.

“We work closely with healthcare workers, equipping them with the necessary tools to improve the quality of care, ensuring they can effectively manage both mothers and babies during and after childbirth,” Dr. Kamala said, which helps them build on over a decade of innovative research and collaboration to improve care during childbirth.

“To give you a sense of the scale of the burden of maternal and newborn mortality in Tanzania when the Safer Births Bundles of Care program was in early development in 2015/16, there were around 556 maternal deaths per 100,000 live births and 25 neonatal deaths per 1,000 live births,” he said.

The published study demonstrates the “transformative impact” of the Safer Births Bundle of Care program conducted across 30 hospitals in five high-burden regions of Tanzania, where there were about 300,000 mother-baby pairs.

Maternal deaths at the start of the program were recorded at 240 per 100,000 live births, with postpartum hemorrhage and hypertensive disorders being the leading causes of death, he said. Over the 24-month study period, this number dropped to approximately 60 per 100,000 live births, representing a 75% reduction. The number of newborn deaths – which are primarily due to breathing difficulties and complications related to prematurity – declined by 40% – from 7 deaths per 1,000 live births to 4 deaths per 1,000 live births.

“These results are remarkable,” Dr. Kamala said.

According to Dr. Kamala, the 75% reduction in maternal deaths was not expected, and a key lesson was the important role of the in-situ team simulations – including for postpartum bleeding – with reflective debriefings that trained facilitators led.

“This seems to be a major part of the success of the program,” he said. “We are delighted by these results and hope that other countries adopt and scale the Safer Births Bundle of Care program… Beyond the numbers, the Safer Births Bundle of Care program has fostered a dramatic culture shift in our healthcare system,” he said. “Healthcare workers are now more confident and better equipped to handle birth-related complications for both mothers and babies.”

Maternal death drop

Dr. Kamala attributed the 60-70% reduction in newborn deaths in Geita and Manyara to several factors.

“Firstly, Manyara was the first site for implementation, giving the region more time to adapt and experience the impact of the program. Most importantly, both regions had a high burden of stillbirths and neonatal deaths, making them ideal targets for focused intervention. As a result, newborn deaths decreased by 60-70%, showcasing a clear positive impact on newborn survival,” he said.

Dr. Kamala said another possible explanation is the differences in the culture of practices, where some health facilities reported inaccurate data due to the fear of blame and shame. However, with the project’s implementation, reporting became more accurate after mplementation. Some regions, such as Tabora, reported an increase in the number of referrals to the study hospitals from other care centers after the program was implemented. These were more likely to be late admissions, which increase the likelihood of poor health outcomes, he said.

After the implementation of the program, there was a 40% decrease in newborn deaths within the first 24 hours after birth, according to the study.

Dr. Kamala said Tanzania’s remarkable progress in reducing maternal mortality by 80% is driven by strategic investments and innovative programs focused on improving maternal and child survival rates.

“Over 2,000 new healthcare facilities have been developed, free health services are being provided to expectant mothers and children under the age of five, and emergency obstetric care – including better transport to hospitals in rural areas are helping to ensure timely, life-saving interventions.

“Most importantly, the Ministry of Health works in collaboration with healthcare workers, hospitals, and development partners to strengthen the skills of frontline healthcare workers, which has been a key factor in driving this progress.

“Political leadership, alongside strategic partnerships and financing, has been crucial in driving progress in maternal and newborn health,” he said.

The program was made possible by the support of the Global Financing Facility for Women, Children, and Adolescents, Norad, UNICEF, and Laerdal Global Health, as well as the Ministry of Health and Haydom Lutheran Hospital. Their partnership and investment enabled the scaling of the Safer Births Bundle of Care to 30 hospitals and supported the research. “The government has now scaled the program to over 150 sites, and there are plans for further expansion to three regions this year and then nationally,” he said.

Dr. Kamala outlined key policy recommendations for other governments can adopt to prioritize maternal health.

“Firstly, it focuses on cost-effective and relatively simple interventions that are essential to preventing maternal and newborn deaths. For example, stronger primary healthcare that is delivered in the community and a well-trained healthcare workforce are also critical. Additionally, working in close collaboration with national, regional, and local health authorities is key.”

He said Tanzania’s approach, where the Safer Births Bundle of Care program was successfully scaled and sustained by aligning the initiative with national guidelines for obstetrical and newborn care. In addition, the creation of mentorship programs and regular supervision has helped to sustain the results.

Looking ahead

Tanzania now plans to expand to three new regions in 2025, followed by a nationwide rollout.

The success of the program has attracted interest from other countries, with Botswana, Ethiopia, Lesotho, and Namibia expressing interest in adapting the program to their healthcare system. In Nigeria, the program has already been launched in two states, Gombe and Borno, marking a significant step in its scaling.

Source: allafrica.com

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