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Agro-Industry Development

Africa hosts a huge spectrum of suitable agro-climatic conditions that allow a broad range of diverse agricultural production. However, it is still importing large quantities of agricultural and food products that may be produced within the continent. For some products, large parts of production are simply not exploited due to lack of infrastructure for commercialization and processing. Besides, market access is becoming an opportunity with the creation of free trade areas at regional level and with preferential trade agreements with certain countries-regions. Urbanization and subsequent food diversification is also an opportunity for African processed staples.

The many problems of poverty, low productivity, inadequate infrastructure and poorly integrated markets faced by developing countries are often exacerbated by an under-developed agro-industrial sector. Little attention has usually been paid to the value chain through which agricultural commodities and products reach the final consumers within the country and abroad. This neglect results in enormous potential losses of value added and employment opportunities.

Actually the level of agro-processing at rural level in Africa is in most of the cases inexistent or just very basic; besides, and as consequence of this low level of agro-processing capacity, Sub-Sahara countries face huge post-harvest losses; for instance and for perishable agro-commodities such as fruits and vegetables, the post-harvest losses average 35-50% of total attainable production, meanwhile for grains vary between 15 to 25%.

Interventions in Agro Industry Development administered in collaboration with the Private Sector should be designed to create the adequate environment and enhance the emergence of locally owned agro-processing industries, capable of creating jobs and increasing incomes in rural Africa. Besides Agro-Industries can promote industrialisation and urban employment, break the ‘productivity gap’ of development, reduce food costs and supply uncertainties and improve the diet.

In line with this situation, the Agriculture and Agro-Industry Department of the Bank has included Agro-Industrial Development within its operational priorities and started incorporating a more market and value chain approach in the design of new operations. This is with a view to ensuring enhanced income generation and livelihood to the beneficiaries, who are largely rural farming communities.

To this effect, agro-processing, post-harvest reduction and market development components feature more prominently in agricultural development initiatives. Besides, the Bank, and as part of the African Food Crisis Response, has started working with development partners in the development of a post-harvest losses reduction strategy that will be one of the first building blocks for the development of the Bank’s Strategy in Agro-Industries. These actions will also contribute to provide support to RMCs in identifying critical intervention along the entire food chain.