Browsing: Agriculture and agri-business in Sub-Saharan Africa

To combat climate change and to mitigate its effects, Africa must adopt modern agriculture technologies, machine innovations and engineering for resilient crop varieties. Modern agriculture technologies help to manage farmers’ risks and even improve product quality which in turn brings about better prices.

Also, when it comes to modern agriculture technologies, there is renewed attention towards value addition, agro-processing and post-harvest management. These factors add to the need for increased investment in agriculture because they all translate to increased income and creation of employment opportunities.

This brings us to the question of funding. Where are countries supposed to get the money to invest in agriculture? To answer this question, African countries, almost all 55 of them, signed the 2003 Maputo Declaration, pledging to dedicate 10% of their annual budget to agriculture, but to date, few have done so.

In Sub-Saharan Africa, more than 60 per cent of the population is comprised of small-scale farmers, and the agricultural sector is anticipated to provide 23 per cent of the continent’s GDP, as stated by McKinsey & Company. However, just 3% of the industry is eligible for banking credit, which severely restricts the ability of farmers to expand their businesses or reduce the impact of unfavourable harvests.

“In contemporary times, ensuring food security is a requirement that is both vital and urgent. As a result, we are going to have to step up to the challenge and create chances for growth in Africa’s agriculture value chain. Our collaboration with Mastercard has arrived at the perfect time to hasten the process of providing smallholder farmers in Africa with access to the essential financial services they require.

These services are essential to the achievement of Africa’s full agricultural potential. According to Ade Ayeyemi, the chief executive officer of Ecobank Group, “It will also assist deliver value across the farming and agricultural value chain, which will make farming in Africa more profitable, resilient, and competitive, ultimately contributing to the expansion of the continent’s economy.”

The solution to the recurrent food insecurity problem lies in investing in the sector to ensure that the agriculture and agribusiness value chains become attractive to those most affected – Africans themselves. 

First, governments which are key stakeholders and players in the sector need to formulate and implement policies that will ensure that the issue of value chains in agriculture is addressed. For starters, with an estimated 33 million smallholder farmers, Africa’s agricultural value chain is deeply fragmented.