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30 May 2023 | Story Dr Mpumelelo Ncube | Photo Supplied
Dr Mpumelelo Ncube
Dr Mpumelelo Ncube is a Senior Lecturer in the Department of Social Work, University of the Free State.


Opinion article by Dr Mpumelelo Ncube, Head of Department and Senior Lecturer in the Department of Social Work, University of the Free State.


The year 2023 marks the diamond jubilee of the establishment of the Organisation of African Unity (OAU), currently known as the African Union (AU), which was founded in Addis Ababa. The visionary founders, including President Kwame Nkrumah and Emperor Haile Selassie, aimed to bring about political change in African states and restore the dignity of African people, who had long suffered under colonial subjugation and disenfranchisement. Their vision encompassed a united Africa, free from oppression, governed by self-determination, and destined for prosperity.

Over time, the OAU transformed into the AU, with the intention of accelerating the dream of African unity and eradicating the social, political, and economic challenges that had begun to define African states. Pan-Africanism emerged as a beacon of hope, inspiring many who understood its significance at the organisation's inception. As we reflect on the ideals cherished by the founding fathers and reaffirmed by their successors in 2002, it is crucial to contemplate four of the seventeen aims articulated during the launch of the African Union in Durban.

Unity and solidarity between African countries and their people

Firstly, the AU aims to achieve greater unity and solidarity between African countries and their people. In pursuit of this goal, notable actions have been taken, such as the establishment of the Peace and Security Council (PSC) to maintain peace in conflict zones such as Mali, Sudan, Somalia, and the Central African Republic. Moreover, in response to the COVID-19 pandemic, the AU set up the Africa Medical Supplies Platform (AMSP) to facilitate the procurement and distribution of medical equipment and supplies throughout the continent. While these achievements are commendable, the majority of the other intentions under this aim lack a concrete plan of action, and the lack of sufficient funding is hampering progress. This presents a cause for concern.

Secondly, the AU pledged to defend the sovereignty, territorial integrity, and independence of its member states. Despite the development of intervention instruments to support this aim, the organisation has been found wanting at critical junctures. One cannot forget the adoption of Resolution 1973 by the United Nations Security Council, which authorised national governments or regional organisations to impose a no-fly zone in Libya, ultimately leading to the assassination of Colonel Muammar Gaddafi. Colonel Gadhafi played a pivotal role in the formation of the African Union and declared his vision for the United States of Africa with a single government and one currency. Surprisingly, three AU member states – South Africa, Nigeria, and Gabon – voted in favour of this resolution. Their actions raised doubts about their commitment to defending the sovereignty, territorial integrity, and independence of the AU.

Africa faces a harsh reality

Africa, a continent with immense potential for growth and development, faces a harsh reality that cannot be ignored. Its burgeoning population holds great promise for contributing significantly to its advancement. Additionally, Africa is blessed with abundant mineral resources, the prudent management of which could sustain the developmental aspirations of its people. Furthermore, Africa's expansive land mass and diverse climate present valuable opportunities to address crucial concerns such as food and energy security. It is perplexing that Africa, a continent three times the size of the United States of America, continues to lag behind in all aspects of development. The continent has enormous potential to foster growth and development and to compete on a global scale. Regrettably, it has thus far failed to harness this potential, leaving the dream of African prosperity, initially envisioned by the founders of the OAU (AU) and their successors, frustratingly out of reach.

As we commemorate the diamond jubilee of the OAU's establishment, let it serve as a reminder of the vision and determination of its founders. Their dreams for an Africa united, free from oppression, and governed by self-determination still resonate today. It is our collective responsibility to ensure that these dreams are no longer scuppered, but rather transformed into a vibrant reality of African prosperity.

News Archive

Producers to save thousands with routine marketing strategies, says UFS researcher
2014-09-01

 

Photo: en.wikipedia.org

Using derivative markets as a marketing strategy can be complicated for farmers. The producers tend to use high risk strategies which include the selling of the crop on the cash market after harvest; whilst the high market risks require innovative strategies including the use of futures and options as traded on the South African Futures Exchange (SAFEX).

Using these innovative strategies are mostly due to a lack of interest and knowledge of the market. The purpose of the research conducted by Dr Dirk Strydom and Manfred Venter from the Department of Agricultural Economics at the University of the Free State (UFS) is to examine whether the adoption of a basic routine strategy is better than adopting no strategy at all.

The research illustrates that by using a Stochastic Efficiency with Respect to a Function (SERF) and Cumulative Distribution Function (CDF) that the use of five basic routine marketing strategies can be more rewarding. These basic strategies are:
• Put (plant time)
• Twelve-segment pricing
• Three-segment pricing
• Put (pollination)(Critical Moment in production/marketing process), and
• Pricing during pollination phase.

These strategies can be adopted by farmers without an in-depth understanding of the market and market-signals. Farmers can save as much as R1.6 million per year on a 2000ha farm with an average yield.

The results obtained from the research illustrate that each strategy is different for each crop. Very important is that the hedging strategies are better than no hedging strategy at all.

This research can also be applicable to the procurement side of the supply chain.

Maize milling firms use complex procurement strategies to procure their raw materials, or sometimes no strategy at all. In this research, basic routine price hedging strategies were analysed as part of the procurement of white maize over a ten-year period ranging from 2002–2012. Part of the pricing strategies used to procure white maize over the period of ten years were a call and min/max strategy. These strategies were compared to the baseline spot market. The data was obtained from the Johannesburg Stock Exchange’s Agricultural Products Division better known as SAFEX.

The results obtained from the research prove that by using basic routine price-hedging strategies to procure white maize, it is more beneficial to do so than by procuring from the spot market (a difference of more than R100 mil).

Thus, it can be concluded that it is not always necessary to use a complex method of sourcing white maize through SAFEX, to be efficient. By implementing a basic routine price hedging strategy year on year it can be better than procuring from the spot market.

Understanding the Maize Maze by Dr Dirk Strydom and Manfred Venter (pdf) - The Dairy Mail


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