Many policymakers and economists argue that for Africa to realize sustained poverty reduction and economic growth, it must embrace the concept of agribusiness. This is based on the fact that the export of oil, minerals and agricultural produce with little or no processing involved hasn’t helped the continent to improve its GDP and eradicate poverty.
According to the International Center for Trade and Sustainable Development (ICTSD), African governments must begin to view agriculture as a modern industry with distinctive scientific, technological and management inputs, and focus their development policies on agribusiness.
“In order to accelerate sustainable growth and development, a rural transformation process is needed to raise the economic value of agricultural commodities and create off-farm employment opportunities,” says ICTSD.
Part of the reason why Africa hasn’t been successful in eradicating poverty is because majority of its nations base their investment on oil and minerals, which often are associated with currency overvaluation, civil conflict and poor connection to the domestic economy, ICTSD adds.
By adding value to its agricultural commodities, Africa is able to create jobs, raise rural incomes, and reduce post-harvest losses and price uncertainties.
Agribusiness is an automatic catalyst for growth in other economic sectors and helps expand domestic markets and foreign trade. Not to mention that it will automatically contribute to improved food security in Africa.
Through agribusiness, Africa has adopted advanced farming technologies that have helped farmers produce a wide variety of commodities thus improving their revenues and food security.
The quality of farm produce in Africa has also improved a great deal thanks to enhanced methods of farming and competition among farmers as they strive to increase profit.
Agribusiness has spurred creativity in farming, which has seen worker productivity improve significantly and new products emerge.
More factories have continued to surface as farmers endeavor to add value to their products for more competitive prices in the international market.
With the latest farming technologies, African farmers have considerably reduced wastage of resources, such as time, and improved their farm output.
While the African agribusiness industry has its fair share of challenges, it has proved to be a reliable alternative asset class for most African economies as opposed to traditional sources of revenue such as oil and minerals.