The United Nations Conference on Trade and Development (UNCTAD) recently published a report on the uptick climb of Africa’s value-added goods production. The report focused on the continent’s rising investment profile in the global supply chain. This leads naturally to the place of agriculture, which employs at least 52% of Africa’s working population as of 2021.
With this in mind, we got in touch with the Secretary General’s Office at UNCTAD. We posed this question: is Africa’s agricultural sector as promising as that of other sectors such as value-added goods production in the global supply chain?
Commentary to the questions is courtesy of Ms. Lisa Borgatti, Economic Affairs Officer, UNCTAD’s Secretary General’s Office.
Ms. Borgatti divides the African supply chain preparedness, including that outside agriculture, into three contexts:
“Firstly, the Economic Development in Africa Report has three key takeaways:
“1st. The recent crises have had challenging global effects, with grave consequences for supply chains. For instance, the report notes that the semi-conductor supply chain was adversely affected, with a slowdown in the sector leaving manufacturers and suppliers disadvantaged.
“2nd. African countries have an opportunity to join the global supply chains by producing and supplying intermediate goods to firms in regions of close proximity such as in Europe.
“3rd. This notwithstanding, in order to attract and incentivize supply chains, African countries ‘will have to be supply chain ready’, through the adoption and implementation of appropriate policies.”
Ms. Borgatti then defines the relationship between agriculture and the above contents of the Economic Development in Africa Report 2023:
“While the report does not cover the agriculture sector, at least 21 out of 51 economies had their share of agriculture to GDP at over 20 percent in 2021 (Sierra Leone at 57.45% and Chad at 53.99% had the highest shares of agriculture to GDP), showing the importance of agriculture for African economies. Thus, Africa’s entry into global supply chains in the agriculture sector would have a relatively large and positive impact for African economies.
“Within the automotive sector, there is an opportunity for supply chains to strengthen the agriculture sector through production of vehicles and machinery with utility in the agriculture sector, such as manufacture of tractors, multi crop thresher as well as other machinery such as the cotton/bale pressing machines.” The UNCTAD commentary ends.
There is a caveat, however, concerning the adoption of agricultural-friendly policies, if the sector is to thrive.
“Nevertheless,” advises Ms. Borgatti, “just like with the five sectors identified in the report, African countries would have to ensure adoption of policies that not only strengthen, but also provide incentives for entry into the agricultural sector global supply chain. Three key areas, as noted in the report, are procurement, production and distribution. “
How about the access of agricultural equipment, which has been a crippling factor for capital-disadvantaged small-scale farmers?
UNCTAD has this answer: “within procurement, the agriculture sector would focus on policies that strengthen the procurement of inputs as well as farm machinery. But production would require a focus on policies that strengthen crop or animal production. In addition, within distribution, policies that strengthen infrastructure, transport and logistics, and distribution of farm products to the market. This would ensure that the agriculture sector is well placed for entry into the global supply chains.
“Finally, as the report notes, enablers such as technology in agriculture and finance, would provide advantages for entry into global supply chains. The 8th Agritec Africa 2023, an international exhibition on agriculture and technology, was held between 15th and 17th June in Nairobi, Kenya. The conference attracted over 10,000 people, from over 150 companies coming from 25 countries, with discussions focusing on farm machinery and farm inputs.
“Forums such as Agritec Africa provide valuable avenues to create awareness on modern farming practices as well as modern technologies that are useful for strengthening Africa’s agriculture sector.”
The report by Ms. Lisa Borgatti ends on this warm note.