Transforming African Agriculture through Inclusive Agricultural Value Chain Development

Africa’s agricultural sector has the potential to drive important economic growth and development in the region. Agriculture accounts for 16 percent of Africa’s annual GDP and employs over half of its labor force, particularly youth and women workers. Despite the sector’s vast potential, however, African agriculture remains hampered by low resource productivity and little or no value addition; shocks like climate change, ongoing regional and local conflict, and supply and market disruptions resulting from the COVID-19 pandemic and global conflicts have only exacerbated these challenges.

Prioritizing inclusive agricultural value chain development (iAVCD), including increasing value addition in agricultural commodity production and industrialization of agribusiness, could help Africa’s agriculture realize its potential for sustainable growth and transformation, says a new report from IFAD and the African Union.

For iAVCD to be successful and sustainable, guidelines are needed to establish evidence-based strategies and interventions, supportive policy environments, and increased and standardized information collection and sharing. The IFAD-AU report takes a first step at establishing such guidelines based on reviews of existing literature and case studies of successful interventions, continent-wide policies and flagship agreements, and multi-sectoral issues impacting the efficiency of Africa’s agricultural value chains. These include urbanization, private sector growth in agriculture, mechanization, solar-powered technologies, digital information and communication technologies (ICTs), climate-smart agriculture, innovative financing technologies, natural resource management, natural resource management, and infrastructure and institutional factors.

The report provides recommendations for both supply-side and demand-side interventions in crop, livestock, and fishery value chains to enhance iAVCD sustainably. Supply-side strategies focused on post-harvest value addition, market access, and consumption: interventions such as providing incentives to agro-input dealers, financial institutions, and other rural service providers to distribute key agricultural inputs more efficiently and equitably to a wider swathe of the population. This intervention has proven successful in Kenya and Tanzania, where several banks have created partnerships with agro-dealers to increase farmers’ access to lower interest rate loans and credit, as well as to share knowledge regarding improved agricultural technologies.

Demand-side interventions focused on ramping up production and productivity, such as through expanded agricultural advisory services that provide market information and weather and climate forecasting. Ghana’s e-Soko app is presented as a successful case study of such an intervention. E-Soko allows farmers and agro-dealers to access market information along the entire agricultural value chain, as well as weather and climate information services; to date, more than 500,000 farmers have used the app.

The report also looks at cross-cutting strategies and strategies for increasing effective legislation, research and development, and infrastructure and technology investment: from improving market infrastructure through public-private partnerships to establishing strong national policies to incentivize sustainable land management practices. One such successful policy is Niger’s Rural Code and Forest Code, which together provided secure tenure for inherited land and incentivized the planting and protection of forests. Since the passage of these policies in the early 1990s, Niger has seen a significant re-greening of the Sahel region, which has led to increased precipitation.   

Finally, the report also provides recommendations for enhancing marketing and trade for agricultural value chains throughout the region. These recommendations aim to address challenges of poor market infrastructure, limited regional and international trade, and low participation of smallholder farmers in markets. Effective market and trade strategies include formalizing informal cross-border trade, building vertical linkages between producers and consumers, and promoting increased intra- and extra-African trade in agricultural products.

Establishing strong and sustainable iAVCD in Africa will take a concerted effort by policymakers, the private sector, civil society, and value chain actors. By looking across multiple factors and pathways impacting Africa’s agricultural sector, the IFAD-AU report provides a roadmap to more inclusive agricultural value chain development in the region.

Sara Gustafson is a freelance communications consultant.