Over the past decade the agricultural sector in Africa has received increased attention from policymakers, researchers, foreign investors, and the development community. Agriculture has been well established as a prominent driver of economic growth and an effective method to reduce poverty and increase food security. However, the majority of agricultural research and development efforts have been primarily focused on increasing the production of staple crops (e.g. maize, wheat, rice), particularly among smallholders. Staple crop production is only the tip of the iceberg in the wider array of crops and farming systems that make up the African food systems. Therefore, research and investments in agricultural development should be spread beyond on-farm production to include all aspects of the value chain, particularly for high-value commodities. The attention focused on production agriculture will not have the maximum impact on development targets if efforts are isolated from supporting the development and growth of agricultural enterprises and businesses.
A number of African poverty reduction strategy papers stress that growth in the agricultural sector contributes proportionally more to poverty reduction than any other economic sector. Over 63 percent of the total population in Sub-Saharan Africa lives in rural areas where agricultural-related activities are the largest source of employment and income, particularly for the rural poor (World Bank, 2013). The agricultural sector contributes about a quarter of gross domestic product (GDP), but employs nearly half the labor force in Africa (Koira, 2014). With global and regional food and agricultural markets growing at unprecedented rates, it is critical that the agricultural sector plays a central role in development and opportunity across Africa.
Agribusiness is defined as “farming plus all the other industries and services that constitute the supply chain from farm through processing, wholesaling, and retailing to the consumer (from farm to fork in the case of food products)” (Yumkella et al., 2011). The World Bank estimates that by 2030 the agriculture and agribusiness sectors could contribute approximately $1 trillion to the African regional economy (World Bank, 2013). Therefore, agribusiness and the wider agricultural sectors should be at the top of country governments’ agendas for economic transformation and development. Agribusiness impacts agricultural and economic development through both upstream and downstream activities. The efficient distribution of agricultural inputs such as improved seeds and fertilizer is essential for increasing farm-level production and productivity. Post-production, agribusinesses involved in the processing and marketing of agricultural commodities add significant value, therefore impacting the profitability of agro-enterprises.
A number of trends highlight the key role of agribusiness in Africa’s development. First, the increased interconnectedness of global food markets increases the need for Sub-Saharan African agribusinesses to become more competitive players on the national, regional, and international markets. Second, as the increasing African population becomes more urbanized and wealthy, the demand for high-value food products is increasing, creating an opportunity for the production and export of these goods. Smallholder farmers have the potential to become more entrepreneurial and expand their enterprises into other nodes of the value chain if properly supported by agribusiness institutions.
The agribusiness environment in Sub-Saharan Africa will continue to change and expand in coming years. This creates many exciting and unique opportunities for young Africans, who bring energy, vitality, and innovation into the labor force, to get involved in the growing sector. The need for agribusiness development in Africa cannot be overstated, particularly for the continent’s largely young and rural population. Agribusiness has the potential to create jobs for millions of African youth. However, in order to have the maximum impact on economic growth and employment, young people need to be engaged and trained in agribusiness to ensure the sector is successfully developed to support the food demands of the growing population (Koira, 2014).
The limited technical capacity of agribusiness firms as well as the limited skills of agribusiness managers and employees continue to inhibit the expansion of agribusiness in Sub-Saharan Africa. Therefore, the agricultural education system must be modified to prepare graduates with the specific skills needed to succeed in the agribusiness sector. Programs should combine traditional agricultural program components such as crop and soil science courses, and combine these elements with business courses such as statistics, finance, and management.
As agriculture is not always seen as a viable career for young people, who often equate agriculture with poverty. In order to change this image, many local and international campaigns are working to make agricultural employment more attractive to youth. For example the “Do Agric” initiative from the ONE Campaign, which has released a series of music videos and partners with African celebrities to raise awareness of the opportunities available to young people in the agricultural sector. There is a urgent need for investing in young Africans to make agriculture in general and agribusiness in particular economically attractive to them. This will greatly help achieve the renewed commitments made to Comprehensive African Agricultural Development by African leaders under the Malabo declaration. Without such follow up a generation of young Africans may largely miss out on a growing opportunity that can immensely benefit them and the rest of Africans to transform their livelihoods.
Babu, S.C., Manvatkar, R., and Kolavalli, S. 2015 ( forthcoming). Strengthening Capacity for Agribusiness Development and Management in Sub-Saharan Africa. African Journal of Management.
Brooks, K., Zorya, S., and Gautam, A. 2013. “Employment in Agriculture: Jobs for Africa’s Youth” in 2013 Global Food Policy Report, Chapter 5. Pp. 48-57. Washington, DC: International Food Policy Research Institute.
Food and Agriculture Organization of the United Nations (FAO). 2014. http://www.fao.org/docrep/008/y6001e/y6001e05.htm.
Koira, A. K. 2014. Agribusiness in Sub-Saharan Africa: Pathways for Developing Innovative Programs for Youth and the Rural Poor. Mastercard Foundation.
World Bank. 2013. Growing Africa: Unlocking the Potential of Agribusiness. Washington DC: The World Bank.
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Yumkella, K. K., Kormawa, P. M., Roepstorff, T. M., and Hawkins, A. M. Eds. 2011. Agribusiness for Africa’s Prosperity. Vienna, Austria: United Nations Industrial Development Organization.