Africa’s growth lies in agribusiness

As Africa embraces the wind of industrialisation, nations are determined to seize the emerging industrial development opportunities as an effective and sustainable means towards economic transformation of its raw materials.

Most countries in Africa depend on the production and export of unprocessed agricultural products as their main foreign exchange earner.

However, reliance on such exports is not only vulnerable to international price fluctuations but also to the vagaries of the weather.

Thus, a well developed and competitive agro-industrial sector in Africa will have a huge potential of generating income and providing employment opportunities not only in farming, but also in related activities like processing, handling, packaging, transporting and marketing of products.

In addition, the sector can contribute to reducing poverty, which is one of the key UN Millennium Development Goals.

The Assembly of the African Union Heads of State and Government in January 2008 endorsed and adopted a plan of action for the accelerated industrial development of Africa, which was developed with the support of UNIDO, UNECA and other partners.

This plan forms the basis for Africa’s industrial transformation and draws lessons from the previous industrial development decades of Africa.

It is structured into seven programme clusters, one of which covers the development of sustainable agribusiness and agro-industries as well as small and medium enterprises (SMEs).

In the last decade, many African countries registered significant progress in adopting macroeconomic reforms, good governance, and business and investment friendly policies.

As a result, these countries experienced relatively high rates of economic growth and improved policy environment for industrial development.

Notwithstanding this remarkable progress, Africa continues to face numerous challenges and supply-side constraints, especially in the agribusiness and agro-industrial sector, which include lack of industrial capacities, low levels of entrepreneurship and institutional support, inadequate energy and infrastructure, and low income levels of the existing enterprises.

This problem has constrained Africa’s agro-industrial development for decades and now requires concerted efforts on creating a conducive and coherent policy environment.

Africa needs to promote agribusiness and generate technical skills in agro-industries, stimulate productivity, promote investment, provide transport facilities and related infrastructure, upgrade and promote indigenous enterprises, create centres of excellence for technology transfer, reduce the time and cost of doing business and introduce appropriate standards to enable products to compete in international markets.

In many African countries, the agricultural sector is largely under-funded and faces problems, which has constrained industrial production and the development of agribusiness.

There is urgent need for increased public investment in the agricultural sector, and related policy reform to ensure increased continental economic growth and development.