Potentials and Pitfalls in Africa's Agrifood Processing Sector

The sustainable transformation of Africa’s agrifood processing system has been increasingly recognized as crucial to ensuring the region’s food security, reducing poverty rates, and supporting economic development. The ReSAKSS 2022 Annual Trends and Outlook Report (ATOR) takes an in-depth look at the status of the system, as well as the major challenges threatening further development and policies that can support sustainable growth in Africa’s agrifood sector.

Agrifood processing is important to the 2014 Malabo Declaration goals of ending hunger and halving poverty on the continent in several ways. As Africa’s population, urbanization rates, and incomes continue to grow, they bring with them increased demand for food outside of the traditional staple food basket – including processed foods. The processing sector forms a critical link between the smallholder producers who farm unprocessed staples and the consumers who want to purchase processed products. This link can simultaneously increase smallholders’ on-farm incomes, provide off-farm employment opportunities, and help Africa meet its own food demand needs without relying as heavily on imported food products.

The importance of this third benefit became glaringly clear over the past three years as the COVID-19 pandemic and the Ukraine-Russia conflict disrupted agricultural markets around the world. Strengthening capacity for local production of healthy, sustainable diets to meet Africa’s growing food demand will go a long way toward protecting the region from future market shocks.

The 2022 ATOR reports that the agrifood processing sector in Africa is growing in terms of employment, output, and productivity. However, the sector remains dominated by small and medium enterprises (SMEs) and informal processing firms, both of which often see lower labor productivity. If these firms were able to increase their productivity, and thus their competitiveness, they could both provide more employment opportunities and reduce reliance on food imports by strengthening intra-African trade in processed food products.

There are several common challenges facing Africa’s agrifood processing sector as a whole. These include lack of skills and knowledge; lack of access to resources like land, financing, and capital; lack of functioning infrastructure for transport and energy; high operating costs; unreliable access to unprocessed food products. Chapter Three of the report examines several case studies of fruit and vegetable processing: tomato processing in Nigeria and Ghana, pineapple processing in West Africa, and fruit juice production across the region as a whole. These case studies portray how common challenges play out for this processing sub-sector.  Challenges facing fruit and vegetable processing include the seasonality and perishability of the unprocessed food products; high farmgate prices (linked to the two foregoing factors) that reduce processing firms’ competitiveness; lack of efficient transportation from rural areas to processing plants; lack of cold storage facilities; and a lack of both capacity to meet food safety standards and national certifications to set such standards.

Overcoming these challenges and ensuring the agrifood processing sector meets its full development potential will take concerted, coordinated effort across the region. Establishing training centers for both operational and entrepreneurial roles, as well as building stronger links between these centers and employers in the processing sector, will help strengthen the workforce’s capacity and enhance productivity. Policymakers will also need to invest in improved ICTs and transportation technology and prioritize policy environments that support business, particularly SMEs; these strategies can help increase processors’ access to financing and capital. A proper policy environment can also increase collaboration between African processing firms and foreign firms and between processing firms and research organizations, thus stimulating innovation and enhancing the sector’s overall potential for sustainable transformation.    

The report also emphasizes that further research is needed into the agrifood processing sector’s ultimate impact on nutrition in the region. While some processed food products have been clearly linked to poor health outcomes and rising rates of obesity and overweight, food processing can also increase the accessibility and affordability of healthy foods, such as ready-to-eat millet or canned or frozen vegetables and fruits. Similarly, processed foods can be fortified with vitamins and minerals, thus enhancing their nutritional value. The opportunities for improved nutrition presented by the processing sector can be supported by policies that establish nutritional standards and labeling requirements and invest in processing that preserves or enhances nutrition.

The agrifood processing sector in Africa has the potential to catapult transformation of the overall agricultural sector and drive achievement of important development goals. In order to reach that potential, however, more research is needed into effective policies and programs to support sustainable growth.