**3.3. Impact of mycotoxins on trade and damage to the African agricultural export market brand**

Mycotoxins affect trade in Africa majorly by reducing the value of commodities offered for sale. Reduced value can manifest at different trade levels through the lowering of prices, inspection cost, disposal, rejection of lots or treatment of lots at additional cost prior to sale, compensation in case of claims and cost of sampling and analysis along the value chain. Not less than 2.3 million bags of maize were found unsuitable for marketing (as well as consumption) during the outbreak of aflatoxicosis in Kenya from 2004 to 2006 [79]. Following another AF alert in Kitui, Kenya in 2009, it was reported that maize prices dropped by half from 1800 to 900 Kenyan shillings [79]. The enforcement of regulatory standards primarily by developed nations which are the main destinations of African agricultural export commodities have resulted in a more critical situation for the African agricultural trade [52, 80]. EU regulation of mycotoxins was expected to reduce African export of nuts, cereals, oil seeds and dried fruits by 64%, reportedly costing 670 million US\$ yearly [81]. Between 2000 and 2014, the cumulative economic loss on domestic and international trade in Gambia was about 23 million US\$, which amounts to a yearly loss of about 1.52 million US\$ [67]. The International Institute of Tropical Agriculture (IITA) [82] reported an annual loss of 1.2 billion US\$ on a global scale due to AF contamination and established that 38% of this loss (450 million US\$) is incurred by African nations.

West African States (ECOWAS) in collaboration with the African Union's PACA and other stakeholders developed the "ECOWAS Aflatoxin Control Action Plan (ECOACAP)" which identified key actionable strategic interventions in order to combat the prevalence of AFs across ECOWAS member States. Policy 4.3 SO3 of this plan recommended that ECOWAS member states increase budgetary allocations and investments to at least 1% of national GDP for the development and enforcement of AFs control efforts [67]. An annual cost of 7.5 million US\$ was calculated by member states of the African Groundnut Council (Mali, Nigeria, Gambia, Sudan, Niger and Senegal) for the implementation of an AF contamination reduction program [90]. The Maize Trust, an initiative principally funded by the government of South Africa, spends over 4 million US\$ per annum on funding projects directly targeted at improving the South African maize industry, and one of the outlined key objectives is to combat mycotoxins in South African maize [93]. Details of other interventions sponsored by other

The Socio-Economic Impact of Mycotoxin Contamination in Africa

http://dx.doi.org/10.5772/intechopen.79328

11

**3.5. Impact of mycotoxins on Africa's self-sustainability and increased dependence** 

Africa worth millions of US\$ can be found from these sources [94, 98, 99].

Interestingly, even the private sector has not been left out. Recently, the spotlight has turned on strengthening coalitions with the private sector, while leveraging on the efforts of different actors for effective management of mycotoxins in Africa. In October 2016, PACA and CTA convened a roundtable event in Entebbe, Uganda to identify concrete areas of collaboration and evaluate avenues for effective public-private sector partnership and engagement in the common agenda for tackling mycotoxin prevalence. CEOs and other representatives from various private establishments such as Cereal Millers' Association—Kenya, AFRI-Nut—Malawi, CTA, Meds For Kids—Haiti, GrainPro—East Africa, PACA, USAID, Nestlé— West Africa, various Women's organisations in Zimbabwe and Uganda, were in attendance,

Africa has been caught in a vicious circle of the cause and effects of mycotoxin contamination and poverty. Mycotoxins aggravates poverty, and due to poverty, many African countries lack the resources to sponsor effective mycotoxin research and mitigation interventions, which further worsens the situation on the continent. As such, majority of the mycotoxin projects conducted on the continent are sponsored by external sources, hence, increasing Africa's dependence of foreign aid. For instance, the US government via the Feed the Future (FTF) initiative of the United States Agency for International Development (USAID) Bureau for Food Security budgeted 2–5 million US\$ per year in 2010, and 15–20 million US\$ per year in 2014, for AF-specific researches in African countries and developing countries in other continents [95]. Ghent University, Belgium sponsored an international thematic network 'Mytox-South' established in 2017, with an initial approved funding of 600,000 EUR. This intends to build/ strengthen the human capacity of researchers from the Southern Hemisphere, leveraging on infrastructure and expertise at Ghent University in order to combat the mycotoxin problem and associated food security and safety issues at global level [96]. The Standards and trade development facility (STDF) sponsored a six month project on strengthening AF control in the Republic of Malawi through the Malawi Programme for Aflatoxin Control (MAPAC) with a budget of 46,265 thousand US\$ [97]. Details on other foreign mycotoxin interventions in

African governments can be found in the PACA report [94].

**on foreign aid**

amongst others [5, 6].

Another major socio-economic impact of mycotoxins on Africa is the damage to the African agricultural tradename. Brand in general terms can be described as an intangible and invaluable feature that distinguishes an entity from its competitors, and comprises expectations, imaginations, emotions and loyalty by the customers [83]. As a matter of fact, in the field of accounting, it is regarded as the most valuable asset on the balance sheet [84, 85]. Damage to brand can have a significant and enduring (and in some cases irredeemable) impact on subsequent business performance, productivity, reputation, financial gains and business prospects. Unfortunately, the mycotoxin issue has caused significant damage to African food and agricultural trade brand, particularly in the export market. Some of the consequences can be observed in the lack of trust for African food/feed commodities, 'redundant scrutiny' (which may result in transaction delays and perhaps more food spoilage), rejections, etc. A case in point was the significant levels of AFs in groundnuts exported from Africa to Europe in 2007 [86], leading to the serious concern about the future of such and other exports from the African continent.

In 2000, 57 cases of border refusal of African exports to the EU were recorded but these cases have increased over the years and as at 2012, 525 cases were recorded [87]. More specifically, from 2002 to 2008, 130 export rejections from Egypt, 90 from Nigeria, 91 from Ghana, 5 from Morocco and 1 from Tunisia were recorded due to mycotoxin contamination [88]. Also in 2008, Rwanda suffered border rejections of sorghum, maize, soybean flour, destined to United Kingdom due to AFs contamination [89]. Between 2007 and 2012, 13 consignments of groundnut and groundnut related products from Nigeria were also rejected by the EU [90]. The National Agency for Food and Drug Administration (NAFDAC) of Nigeria reported that up to 42 semi-processed and processed food products of Nigeria origin destined for the European Union where rejected in 2015 and 2016 for failing to meet standards [91]. Twenty-eight of these items were destroyed, 6 subjected to official detention, 6 withdrawn from consumers and from the market, and 9 were re-dispatched [91]. Based on data from European Commission Rapid Alert System (RASFF), 35% of food/feed commodities rejections by the EU borders in 2014 were due to mycotoxin contamination at levels above the EU legislative limits [76]. It should be noted that the cost of a rejected food shipment is significant (about 10,000 US\$ per lot in demurrage fees) even if the lot can be returned to the country attempting to export [92].

#### **3.4. Impact of mycotoxins on national budget due to mitigation costs**

Some African countries have started to set up interventions to reduce the prevalence of mycotoxins in their jurisdiction, however, most of these interventions have high cost implication with regards to their design and implementation. In 2014, the Economic Community for West African States (ECOWAS) in collaboration with the African Union's PACA and other stakeholders developed the "ECOWAS Aflatoxin Control Action Plan (ECOACAP)" which identified key actionable strategic interventions in order to combat the prevalence of AFs across ECOWAS member States. Policy 4.3 SO3 of this plan recommended that ECOWAS member states increase budgetary allocations and investments to at least 1% of national GDP for the development and enforcement of AFs control efforts [67]. An annual cost of 7.5 million US\$ was calculated by member states of the African Groundnut Council (Mali, Nigeria, Gambia, Sudan, Niger and Senegal) for the implementation of an AF contamination reduction program [90]. The Maize Trust, an initiative principally funded by the government of South Africa, spends over 4 million US\$ per annum on funding projects directly targeted at improving the South African maize industry, and one of the outlined key objectives is to combat mycotoxins in South African maize [93]. Details of other interventions sponsored by other African governments can be found in the PACA report [94].

Kenya in 2009, it was reported that maize prices dropped by half from 1800 to 900 Kenyan shillings [79]. The enforcement of regulatory standards primarily by developed nations which are the main destinations of African agricultural export commodities have resulted in a more critical situation for the African agricultural trade [52, 80]. EU regulation of mycotoxins was expected to reduce African export of nuts, cereals, oil seeds and dried fruits by 64%, reportedly costing 670 million US\$ yearly [81]. Between 2000 and 2014, the cumulative economic loss on domestic and international trade in Gambia was about 23 million US\$, which amounts to a yearly loss of about 1.52 million US\$ [67]. The International Institute of Tropical Agriculture (IITA) [82] reported an annual loss of 1.2 billion US\$ on a global scale due to AF contamination

10 Mycotoxins - Impact and Management Strategies

and established that 38% of this loss (450 million US\$) is incurred by African nations.

**3.4. Impact of mycotoxins on national budget due to mitigation costs**

Some African countries have started to set up interventions to reduce the prevalence of mycotoxins in their jurisdiction, however, most of these interventions have high cost implication with regards to their design and implementation. In 2014, the Economic Community for

Another major socio-economic impact of mycotoxins on Africa is the damage to the African agricultural tradename. Brand in general terms can be described as an intangible and invaluable feature that distinguishes an entity from its competitors, and comprises expectations, imaginations, emotions and loyalty by the customers [83]. As a matter of fact, in the field of accounting, it is regarded as the most valuable asset on the balance sheet [84, 85]. Damage to brand can have a significant and enduring (and in some cases irredeemable) impact on subsequent business performance, productivity, reputation, financial gains and business prospects. Unfortunately, the mycotoxin issue has caused significant damage to African food and agricultural trade brand, particularly in the export market. Some of the consequences can be observed in the lack of trust for African food/feed commodities, 'redundant scrutiny' (which may result in transaction delays and perhaps more food spoilage), rejections, etc. A case in point was the significant levels of AFs in groundnuts exported from Africa to Europe in 2007 [86], leading to the serious concern about the future of such and other exports from the African continent. In 2000, 57 cases of border refusal of African exports to the EU were recorded but these cases have increased over the years and as at 2012, 525 cases were recorded [87]. More specifically, from 2002 to 2008, 130 export rejections from Egypt, 90 from Nigeria, 91 from Ghana, 5 from Morocco and 1 from Tunisia were recorded due to mycotoxin contamination [88]. Also in 2008, Rwanda suffered border rejections of sorghum, maize, soybean flour, destined to United Kingdom due to AFs contamination [89]. Between 2007 and 2012, 13 consignments of groundnut and groundnut related products from Nigeria were also rejected by the EU [90]. The National Agency for Food and Drug Administration (NAFDAC) of Nigeria reported that up to 42 semi-processed and processed food products of Nigeria origin destined for the European Union where rejected in 2015 and 2016 for failing to meet standards [91]. Twenty-eight of these items were destroyed, 6 subjected to official detention, 6 withdrawn from consumers and from the market, and 9 were re-dispatched [91]. Based on data from European Commission Rapid Alert System (RASFF), 35% of food/feed commodities rejections by the EU borders in 2014 were due to mycotoxin contamination at levels above the EU legislative limits [76]. It should be noted that the cost of a rejected food shipment is significant (about 10,000 US\$ per lot in demurrage fees) even if the lot can be returned to the country attempting to export [92].
