How Africa can make the next quantum leap in agriculture

Agriculture is sub-Saharan Africa’s main industry. It employs 65% of its labour force, accounts for one-third of gross domestic product and is expected to grow in value by a factor of three between 2010 and 2030 to $1 trillion dollars annually. It needs to grow faster, because transformation of African agriculture would not only return the region to being a net producer of food, but also provide a stimulus to the region’s economy.

Achieving this transformation may be merely a matter of massively increasing labour productivity and encouraging workers to move away from subsistence farming towards processing and higher-value activities but, judging by the pace of change in recent decades, nothing less than a quantum leap will be needed for it to happen any time soon.

For this to happen, a number of things need to occur. Investment flows, for one thing, need to accelerate. This will only happen if efforts are made to help farmers at all scales ‒ from the smallholder to SMEs and larger businesses ‒ manage costs and risks. Governments also need to play a part, focusing on creating an enabling environment that is responsive to markets. Most of all, collaboration between stakeholders must increase in terms of quality, scale and focus.

There are signs that this might be happening. Grow Africa, a multistakeholder initiative that was led by the World Economic Forum with the African Union and NEPAD, offers a window on to what is happening in African agriculture and what kind of future the sector could look forward to if public-private cooperation were allowed to flourish.

Since its launch in 2011, Grow Africa has achieved an unprecedented dynamism and commitment among domestic and international private-sector operators who, between them, have committed to tripling investment to $10 billion during this time. Two-thirds of these participating companies are based in Africa.

This increased flow of commitments has happened because companies have felt the confidence to be able to take a long-term position on African agriculture. For the first time, there has been a meaningful engagement with smallholder farmers, encouraging them to add value along the chain by entering into processing industries and serving domestic markets. During the period 2013-2014, companies active in Grow Africa reported reaching 8.6 million smallholders through provision of new services, sourcing, contracts or training.

It is a good start, but it is not enough to be able to say that we have achieved transformation. More needs to be done before we can start to turn these baby steps into strides.

First, achieve economies of scale in three key areas: finance, skills and technology, and access to capital. Second, improvements must be made to the organization and logistics of trading, marketing and storage – which is always a weak link. A third area for change is making markets functional rather than dysfunctional, formal and institutionalized not informal and personalized, and deeper and more liquid.

If we get these steps right, no smallholder in Africa need be left behind.

The World Economic Forum on Africa 2015 takes place in Cape Town, South Africa from 3-5 June. 

Author: Arne Cartridge is Chief Executive Officer of Grow Africa.

Image: A farmer inspects his crop at his farm in Senekal, South Africa. REUTERS/Siphiwe Sibeko