African agriculture: potential and critical aspects

The primary sector contributes a large part of gross income, accounts for the largest part of exports and is the most important source of employment. The sector has enormous potential for growth, but it is necessary to work on the supply chains and on the processing capacity

Among the trends known to be underway, two are those that are reshaping the African continent: the first leads to population growth, the second to the process of urbanisation. The continent's population – according to all projections – will double within a few decades, by 2050, and by the end of the century will exceed four billion inhabitants. The rate of urbanisation will accompany this process with equal impetus.

These two megatrends, and the speed with which they are imposing, cascade a series of reactions. First of all, policies, i.e. actions to respond to the challenges that these developments bring with them (just think of the services and means necessary to meet the needs of millions of more people year after year), and economic, linked to the guarantee of food security, to the generation of jobs for a young and dynamic population,  and the awareness of the need to create local added value (less export of raw materials, more manufacturing and agro-industrial processing also for semi-finished products).

Understanding what the prospects for agricultural development in Africa may be therefore goes far beyond the limits now visible, because it is impossible to capture in one frame the dynamism with which the African continent as a whole is moving, in its complexities, its criticalities and its positives. One thing is certain: Africa's economic and social development will tip the scales of the world we will have in a few years' time.

A wide-ranging view. We are still on the continental geographical space, although we are aware that we have in common 54 countries, many of which are larger than Italy, and we focus our attention on the major critical issues of continental agriculture. A first fundamental element leads back to the causes that have so far prevented the development of the sector beyond the boundaries of subsistence. The African continent is characterized by an enormous untapped production potential, combined with infrastructural and industrial inefficiencies that have hindered the creation of added value. Agricultural industrialisation is a topic that needs to be built. Although several countries have started processes of processing products through, for example, the creation of dedicated districts, the difficulties to be overcome remain numerous, just think of post-harvest losses or the lack of an effective cold chain or the persistence of inefficient cultivation techniques. In addition, there are difficulties common to other sectors, such as insufficient transport networks or inadequate regulations.

Lights and shadows of African agriculture. Yet the primary sector contributes to a large part of gross income (around 30% on average), constitutes the main part of exports and is the most important employment outlet. Working on supply chains and processing capacity is the goal of African governments for two reasons: to ensure food security and to ensure economic and social development. One of the classic examples of production and processing with a low content of "African" added value on the total product, is that of coffee, which is composed of 90% added value from outside the continent. Cocoa could also be mentioned, but there are many examples. The second major issue, which highlights a delay and at the same time suggests strong opportunities, is the availability of land. Based on FAO and World Bank estimates, between 480 and 840 million hectares of unused arable land are available in Africa. The range of this estimate is wide, the numbers vary depending on the parameters used, but summing up, it can be deduced that a large part of the unused and available agricultural land in the world is located on the continent, up to about 60%, according to several sources. Other problems concern the prevalence of small plots and subsistence farmers who rarely join together in cooperatives or consortia, with consequent difficulty in accessing markets and credit, and with a decidedly low productivity, on average 56% lower than in other regions of the world. The reduced productivity highlights the enormous challenge that must be faced in bringing African agriculture up to modern standards. The mechanisation of the sector, which is an essential way to improve production thresholds, starts from very low levels, with a continental average of less than two tractors per 1,000 hectares of cultivated land. These figures therefore highlight a paradox: while the agricultural industry in Africa represents a potentially multi-billion dollar market, the numbers provide a clear illustration of the structural complexities that could make investment in Africa difficult.

Food powerhouse. Yet, this is where everyone's future is at stake, whether you live in Africa or not. The African Development Bank (AfDB) is well aware of this and has long set itself the goal of transforming the continent into a "food powerhouse". Indeed, the president of the AfDB, Akinwumi Adesina, often repeats that if Africa has a comparative advantage over other regions of the world, it has it in agriculture. The reading of megatrends made by the south is indicative: more inhabitants means more workforce, younger and more middle class mean new markets, larger cities mean easier access to consumers. "The new African billionaires," Adesina said last November in Marrakech on the occasion of the Africa Investment Forum, "will not come from the oil and gas industry, but from the agri-food industry, from agriculture." To cope with new and potential food crises, Africa must be able to rely on itself and must solve the problems of more than 280 million people who today do not have enough food. According to the AfDB, there is a need for a paradigm shift, favouring the creation of added value at the local level rather than the export of raw materials, and also relying on the creation of economic zones dedicated to agri-food. These areas – which AfDB is working on – can turn the vast expanses of land still available in Africa into real sources of wealth.

Southern African Potentialities. If we then transfer these reasonings to a sub-regional scale, it emerges more clearly which areas are destined to grow and those in which, also due to adverse climatic conditions, it will be more difficult. In general, the areas most affected are those of the Sahelian belt where the concurrence of several factors has also led to almost permanent instability with negative effects on all economic sectors. To the north, Morocco, Egypt and Tunisia are trying to develop some supply chains, in particular cereals and olive growing, in different ways and starting from different economic and political contexts. But it is further south that the most important potential lies. Thanks to the growth in size of farms - urbanisation will help fuel this trend - and to increased productivity that will be made possible by the introduction of modern techniques, according to a McKinsey study, new land can be more easily put under cultivation in Angola, Chad, Madagascar, Mozambique, the Democratic Republic of Congo, South Sudan, Tanzania and Zambia. The progressive implementation of the African Continental Free Trade Area (AfCFTA) will further contribute to the development of agriculture, through the expected increase in regional and intra-African trade.