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Agribusiness Sector Reviews

In all countries studied with the exception of South Africa, there is insufficient data on the agribusiness sector available.

Agribusiness in Ghana is still rudimentary and artesian with little growth or development over the last three decades. It is difficult to analyse the performance of the agribusiness sector in Ghana due to the lack of comprehensive data on agribusiness enterprises and their activities in Ghana. The sector is not classified into sub-sectors and the last industrial survey was conducted in 1995 but covered only medium and large-scale industries. The extracted data on agro-industries showed a total of 250 companies with about 48,914 employees. In terms of employee numbers, the timber sub-sector dominate (46 percent) followed by the textile sub-sectors with 22 percent.

There is a lack of data on the agribusiness sector in Uganda. It appears that the sector is in its infant stage of development. Agriculture is dominated by smallholder farmers with limited interaction with both product and input markets. Some growth has been experienced in the horticulture and fish export sector but similar to Ghana there is no official statistics available. The traditional cash export sector is losing in international competitiveness.

Kenya has had a successful agricultural sector development since the early 50’s. In the early 90s, the agro-processing sector contributed about 10 percent to GDP and 31 percentto total employment. During this period, however, the government introduced far-reaching structural reforms, including removal of price controls, removal of all import licensing, and removal of foreign exchange controls. These measured slowed growth substantially to 1.2 percent in 1997.

Much of the new agribusiness investment over the past decade by foreign companies has been made by firms, which had already been established for a long time. Investments have been geared toward diversifying product lines away form commodities facing adverse market trends. Kenya has witnessed the diversification of foreign owned tea, coffee and sisal companies into horticultural production and trade.

Nigerian agribusiness enterprises include the whole gamut of operations in the agricultural production, processing, distribution, and consumption spectrum. Agribusiness enterprises in Nigeria are classified into four major groups, farming input supply companies, producing farm firms, food processing agribusiness firms, and food marketing and distribution agribusiness organizations. These four groups can be found in the formal and informal sector of the economy.

Agribusiness firms are scattered all over the country but are concentrated in three main industrial clusters in Nigeria; Kano Kaduna Jos in the north; Lagos-Otta-Ibadan in the south west and Port Harcourt-Aba-Nnewi-Onitsha in the southeast. In general, the Lagos-Otta-Ibadan axis accounts for 44 percent of the registered firms and roughly 52 percent of the employment. Based on the average number of employees per firm, the largest firms are also located in the Lagos area. While most of the sector is made up of small-scale enterprises (about 60 percent of the firms have between 20 and 49 employees), these only account for 12 percent of employment. With a few exceptions, firms with more than 500 employees provide the bulk of sectoral employment and account for 53 percent of total employment.

The South African agro-food complex, which consists of primary production plus the input and agro-processing sectors, accounts for around 14 percent of the GDP. In 2000 the agro food complex exported about R16 billion worth of primary and processed food products, or nearly 10 percent of South Africa’s total exports. Almost all the productive and social activities of rural towns and service centres are dependent on primary agriculture and related activities. This includes increasingly popular and economically significant agro-tourism and game farming activities. Taking all of this into account it is true that more than half of the provinces and about 40 percent of the country’s total population are primarily dependent on agriculture and its related industries.

Sales in the South African manufacturing sector grew by some 2.5 percent per annum in real terms in the period 1996-2001, a rate close to the overall real rate of growth of the economy. By contrast, sales of the food and beverages industries grew by about half that rate, making it one of the worst performers in this sector. Recent sales growth in this sub-sector has been third highest among the components of the manufacturing sector. Production in the food and beverages group accounted for about 18.5 percent of total manufacturing output for the country in 1996, while employment was 15.9 percent of total manufacturing sector employment and the wage bill 13.5 percent of total manufacturing sector wages.

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