In Africa, legalizing marijuana can generate higher growth

May 13, 2021 at 8:27 am

In April 2018, Zimbabwe became the second African country to legalize cannabis for medical and scientific use. He joined a small group of pioneer African countries, most of which are in southern Africa, which have commercialized the crop in recent years or have made great strides in it.

Many African countries have traditionally relied on profits generated from the export of cash crops such as cocoa, cotton and corn – but with constantly fluctuating prices in the world market, these are unreliable sources of income. Legalizing cannabis could provide these countries with another lucrative source of income and help create jobs, as the plant can be used to produce products ranging from cannabis oil to textiles.

While the term “cannabis” broadly refers to all products derived from the plant, “marijuana” specifically refers to its dried flowers, leaves and stems. Legalization involves the removal of all legal prohibitions against the possession, production and use of cannabis. Under decriminalization, on the other hand, cannabis remains illegal, but governments do not prosecute people for possessing it in limited quantities.

Despite the plant’s economic promise, many governments remain wary of legalization. Cannabis is one of the fastest growing sectors in Africa, but Zimbabwe is just one of 10 countries that have decriminalized it or made efforts to do so.

Zimbabwe’s decision was largely driven by economic reasons: Mthuli Ncube, Zimbabwe’s Minister of Finance, said cannabis production could generate $ 1.3 billion in 2021, making it one of the fastest growing industries. lucrative business of the country.

As demand for medical marijuana products increases around the world and states seek to diversify their income streams, other African countries should follow Zimbabwe’s lead. Africa could reap huge economic benefits from cannabis – but only if it goes further with legalization.

South Africa has made progress in decriminalizing medical cannabis, although this is far from complete legalization. In 2018, the country’s Constitutional Court legalized the personal use and production of cannabis, while allowing police to determine whether the amount in their possession was for personal use or trafficking. More recently, in April, the Ministry of Agriculture, Land Reform and Rural Development released its draft Cannabis Master Plan, which aims to relax regulations and decriminalize private cannabis here. 2023.

In East Africa, Uganda is also home to a lucrative cannabis industry. The sector – of an estimated value $ 3 billion– should benefit the country by creating jobs, generating taxes and encouraging foreign direct investment and a trade surplus.

Last October, Rwanda became the last African country to allow the production and processing of medical marijuana. The government hopes to reap significant benefits from the industry, which it sees as a key sector that will create jobs and other economic opportunities.

Most of Africa’s crops, however, are still produced in its illegal multi-billion dollar cannabis industry. According to Regional report on hemp and cannabis in Africa, Africa accounted for about 11% of the global market, valued at $ 37.3 billion, in 2018.

With an illicit cannabis industry already flourishing in many African countries, decriminalization and regulation is needed to control the industry and use of the plant. The regulations will also ensure that illegal production is now formalized, thereby generating additional tax revenue and further stimulating economic development.

Regulating medical cannabis can also help the continent cope with serious illnesses, as the cultivation can be used to make medicine in countries where it is legal. Cannabis products can be used to alleviate some of the side effects of epilepsy, cancer, and neurological diseases. In the United States, for example, although the Food and Drug Administration has not approved cannabis for medical treatment, it has approved Epidiolex, a drug derived from cannabis, to treat seizures, and three synthetic cannabis products to relieve health problems associated with chemotherapy.

Even with these potential benefits, cannabis remains highly stigmatized across Africa, and many governments believe that more liberal laws will increase drug addiction, recreational drug use, and the use of more dangerous drugs, such as heroin and cocaine, which are often linked to crime.

But these concerns are unfounded. The cannabis trade operates outside the supply chains of these other drugs. In reality, politicians and decision-makers resist legalization because they hold traditional views on the social ills perceived by the factory. Putting in place the necessary infrastructure for cannabis production could also be costly for many countries.

Growing and processing cannabis requires expensive advanced technologies such as greenhouses and automated irrigation systems, as well as advanced manufacturing practice standards. Countries that do not have the financial resources to acquire this technology and maintain high manufacturing standards may find it difficult to enter the market.

In order to regulate the industry and prevent illicit use, governments have instituted an expensive licensing system. But the high price of a license – which can cost more than $ 10,000 – prevents small farmers and businesses from participating in and profiting from the market. In addition to inhibiting the growth of the industry, these licenses also funnel profits into the hands of foreign investors with deep pockets, as most of these licenses are international companies.

With just 10 African countries having decriminalized cannabis or shifted in that direction, Africa lags behind Europe, North America and Latin America, which have made greater strides towards legalization – and have also reaped its benefits.

In Canada, for example, the cannabis industry’s contribution to government revenue has increased 215% since its first legalization, with five-fold growth expected by 2025. And in the United States, the legal cannabis industry has already created an estimate 250,000 jobs. As five new states – Arizona, Mississippi, Montana, New Jersey, and South Dakota – also move in this direction, the industry is expected to produce more than 26,000 new jobs by 2025.

In December 2020, the United Nations Commission on Narcotic Drugs removed cannabis from the most tightly controlled class of narcotic drugs. Although intended to facilitate research, the move – a historic development in the recognition of the drug’s benefits – could also boost the growth of the cannabis sector in Africa and globally.

While cannabis producers would prefer to see reclassification go further, the move reflects how the movement towards legalization has gained ground and could benefit Africa. Nigeria, Ethiopia, Morocco, Angola, Cameroon, South Africa, Kenya, Democratic Republic of Congo, Algeria and Egypt are the top 10 cannabis users on the continent, but only South Africa has legalized its consumption.

As cannabis continues to be produced illegally across the continent, full legalization and regulation could unlock huge economic benefits for Africa and even lead to a potential annual profit of around $ 7 billion by 2023. Decriminalization and eventually legalization of cannabis could increase diversification, spur growth and help treat serious illnesses. Political resistance is likely to persist, but the potential benefits of legalization are too great to ignore.

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About Kristine McNally


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