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Will Medical Cannabis Save Africa's Economy?

Updated: Jan 28


Westleaf Staff


In April 2018, Zimbabwe legalized Cannabis for medicinal and scientific use. It joined a small group of pioneering African countries that have in recent years commercialized marijuana crops or made great strides in that direction.


Most African countries traditionally rely on profits generated from exporting such cash crops as cocoa, cotton, and maize—but with prices that constantly fluctuate in the global market, they are unreliable sources of income. Legalizing medicinal cannabis could provide these countries with another profitable income stream and help create jobs, as the plant can be used to produce goods such as cannabis oils and textiles.


Legalization entails removing all legal bans 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.


Zimbabwe’s decision was largely driven by economic reasons: Mthuli Ncube, the Zimbabwean finance minister, has said that cannabis production could generate $1.3 billion in 2021, making it one of the country’s most lucrative industries.


As demand for medical marijuana products surges worldwide and states look to diversify their income streams, other African countries should follow Zimbabwe’s lead. Africa could reap enormous economic benefits from cannabis—but only if it goes further in legalization.


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


South Africa has made progress in decriminalizing cannabis for medical purposes, although it’s far from full legalization. In 2018, the country’s Constitutional Court legalized the personal use and production of cannabis, while allowing police to determine if the quantity in one’s possession was for personal use or for trafficking. Most recently, in April the Department of Agriculture, Land Reform, and Rural Development released its draft cannabis master plan, which aims to loosen regulations and decriminalize cannabis for private purposes by 2023.

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


Last October, Rwanda became the latest African country to permit the production and processing of medical marijuana. The government hopes to reap sizable profits from the industry, which it views as a key sector that will generate jobs and other economic opportunities.


Most of Africa’s crop, however, is still produced in its illegal multibillion-dollar cannabis industry. According to the Africa Regional Hemp and Cannabis Report, Africa accounted for an estimated 11 percent of the global market, valued at $37.3 billion, in 2018.


With an illicit cannabis industry already thriving in many African countries, decriminalization and regulation are necessary to control the industry and use of the plant. Regulation will also ensure that illegal production is now formalized, thus generating additional tax revenue and further stimulating economic development.


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




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


But these concerns are unsubstantiated. Cannabis trading operates outside of the supply chains of these other drugs. In reality, politicians and policymakers resist legalization because they hold traditional views about the plant’s perceived social ills. Establishing the infrastructure necessary for cannabis production could also be costly for many countries.

Cannabis farming and processing requires expensive, cutting-edge technology such as greenhouses and automated irrigation systems, as well as advanced manufacturing practice standards. Nations that lack the financial resources necessary to acquire this technology and maintain high manufacturing standards could struggle to enter the market.


In order to regulate the industry and prevent illicit use, governments have instituted an expensive licensing system. But the hefty price of a license—which can cost upwards of $10,000—is preventing small farmers and enterprises from participating in, and benefiting from, the market. Beyond inhibiting the industry’s growth, these licenses also funnel profits into the hands of deep-pocketed foreign investors, as most of those licensed are international companies.


Source: Foreignpolicy.com



 
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