FAO Regional Office for Africa

Private sectors catalytic role in agribusiness development

FAO convenes private sector leaders to set agenda for agribusiness growth

photo: ©FAO

17 March 2020, Aburi [Ghana] – Africa’s food market is estimated to grow to $1 trillion USD by 2030 and it needs the catalytic intervention of the private sector to bring it to fruition. 

In order to achieve and surpass this growth, all actors in the agribusiness space must play their part. An indispensable actor is the private sector. This growth potential, coupled with the recently signed Africa Continental Free Trade Area (AfCFTA), with a combined Gross Domestic Product of more than US$3.4 trillion, provides new opportunities for consumer and business spending, led by a vibrant private sector. 

The Food and Agriculture Organization of the United Nations’ (FAO) Regional Private Sector Dialogue or African Agribusiness Leadership Dialogue 2020 (AALD), held on 2 March 2020, engaged a broad range of private investors in agriculture and food systems in the Africa region, in order to obtain their perspectives on trade and investment opportunities, including constraints and how to resolve them. Over 50 private sector entities across the continent participated. This year’s event was also attended by Carlos Kingsley Ahenkorah, and Deputy Minister of Trade and Industry on behalf of the Hon. Minister, representing the host country, Ghana.

Innovating for Intra-African Trade

Under the theme, “Reshaping agriculture and trade in Africa”, the dialogue principally focused on three areas, namely, intra-African trade, agribusiness innovation and agricultural financing. “The theme aims to seize the huge potential residing within the agri-food business sector and the immense opportunities continental frameworks could offer for agri-food systems transformation,” said Abebe Haile Gabriel, FAO Assistant Director-General and Regional Representative for Africa.

“Boosting intra-African agricultural trade can help generate jobs for women and youth in agricultural value chains, raise incomes, and improve food security and nutrition. There is the need for African countries to embark on greater and more diversified agricultural trade at regional and global levels to help boost productivity at all stages along the value chain in order to help transform African agriculture into a high-productivity sector, provide adequate incomes and stimulate growth,” stated the added the Deputy Minister.

Emphasizing the importance of innovation to truly achieve the potential of the agribusiness space in Africa, George Manu, Partner/Head of IDAS KPMG East Africa, added, “we cannot do agriculture and trade as business-as-usual, we will never get there. The private sector has a pivotal role to play in all of this alongside government. We need to take leadership; we cannot leave it to the politicians.” 

Capitalizing on digital technology, opportunities arising from demography shifts and the newly agreed Africa Continental Free Trade Area, private sector will collaborate with each other and leading organizations like FAO to promote growth in the agribusiness space. Trade cannot remain within borders but expand the opportunities for local farmers to access markets across the continent that would otherwise be closed. Private sector should lead the way in providing revolutionary financing, marketing and distribution solutions to spearhead intra-African trade.

Recommendations to Make Intra-African Trade a Reality

During the meeting, business leaders across the continent provided insight on how to make intra-African agribusiness trade a reality. Using frameworks made available by governments, economic blocks and regulators, the key recommendations were concluded for governments, development partners and the private sector.

The government, in concert with Regional Economic Communities (RECs) and governing bodies, will have to continue to support innovation in agriculture in Africa, partner with the private sector and development agencies, invest considerable public resources in market- and trade-related institutions and infrastructure, and play a more active role in de-risking finance and investment in agriculture on the continent. Additionally, the government should focus efforts on crowding-in private capital to encourage the development of a sustainable financial sector for agriculture, thoroughly review of existing policies and procedures related to trade and investment and harmonize cross-border trade regulations within the region.

The private sector actors especially large firms and multinationals that are making investments in the agricultural sector should aim to make long-term commitments to develop the supply chains they are working in. The financial sector including commercial financial institutions and private investors—should adapt to the realities of agriculture in Africa and invest in the development of alternative financial products and services that adequately serve the needs of the sector.

Finally, FAO should continue in its efforts to increase and standardize its mechanisms and processes for engagement with the private sector.

These outcomes will be presented to African leaders at the 31st Session of the FAO African Regional Conference for Africa later this year, including but not limited to, at the ministerial roundtable on Enhancing Policy and Regulatory Environments to Stimulate Investments for Rural and Agricultural Transformation. ”The findings of the private sector dialogue are critical for enhancing country readiness to engage effectively in the AfCFTA and to drive trade and investment that will stimulate sustainable agriculture and rural transformation. We will also use the findings in our engagements with resource partners and development agencies that make investments in Africa, and in dialogue and advocacy with the public sector, development partners, and civil society,” concluded by Ade Freeman, Regional Programme Leader at FAO Regional Office for Africa.