How to make it in Africa's Agro-processing sector

The move towards agro-processing is one that has been accelerated among many nations in sub-Saharan Africa that became subject to food shortages due to trade disruptions. Africa has a wide range of agro-climatic conditions that are ideal for a wide variety of agricultural output. Despite this, it continues to import a lot of agricultural and food items that could be produced on the continent. Due to a lack of infrastructure for processing and commercialization, significant portions of some products’ production are simply not utilized.

 

The importance of the agro-processing industry to African economic development cannot be understated. In the agro-industry sector, less than 10 percent of value-addition is attributed to Africa. Sub-Saharan Africa’s food import bill stood at $43 billion in 2019.

 

We have developed three simple steps to follow when considering a market entry.

1. Understand consumers' needs and wants

The ultimate financier of the food sector is the consumer. Producers must have a greater grasp of consumers’ shifting preferences for quality, convenience, safety, and other food qualities to better adapt to demand trends and effectively compete with imports. The middle class in Africa is less wealthy than in many other regions of the world. Companies targeting these consumers need to balance the consumers’ desires for the latest Western convenience foods with the reality of what they can afford and what they need. 

2. Build sustainable supply chains

Supply chains decrease risk, boost productivity, improve access to capital markets, and aid in waste reduction. To ensure that output increases sustainably, processing plants should ideally be situated adjacent to where raw material production occurs. It takes close coordination along every link in the value chain, from the seed to the consumer’s plate, to produce and supply them to customers in a safe and effective manner. This necessitates enhanced product grades and standards, as well as modernized hard and soft infrastructure, such dependable cold chains. For instance, it is useless to construct an innovative food processing and packaging facility in an African nation if the availability of raw materials is in question.

3. Be regionally & globally export competitive

By aiming high enough to be competitive in regional and global markets, food companies will raise their standards and ensure their long-term success, even if the bulk of their products are sold on local markets. A competitive food, beverage, and agro-derivatives industry that makes use of and develops local and regional resources to meet domestic demand and boost trade participation is the goal of Africa. To accomplish this, production capacity must be increased, and value-added expansionary agro-processing activities must be promoted in a way that encourages economic activity and inclusion.

Several opportunities exist to increase the value of agricultural commodities. Examples include:

 

  • Manufacturers of agro –processing and packing equipment /plant.
  • The production of agrochemicals, such as fertilizers, insecticides, and herbicides, as well as improved seeds for agriculture.
  • The creation of hatcheries to produce chicks at day old
  • The construction of factories for the domestic manufacturing of feed additives and vaccines for the livestock industry
  • The establishment of large-scale processing facilities for the preparation of food products, including fish, meat, cash crops, industrial crops, and vegetables
  • The production of leathers using cow and ostrich hides.
  • Dairy product production
  • The construction of commercial packing facilities for the handling of produce
  • The creation of jute bags makers of fish meal and feed

Conclusion

For African nations to boost agro-processing, the necessary conditions need to be intentionally set in place. Firstly, it is necessary to attract investment to stimulate and grow the private sector. Second, post-harvest infrastructure is crucial for the storage, transportation, and trading of goods. Lack of or poor infrastructure can cause supply chains to break down and result in lower yields that could have been used for the processing or sale of goods.

Although raw materials are naturally perishable, post-harvest losses in African nations are higher than typical. Therefore, the government must take action to close these infrastructure gaps. Thirdly, to purchase new inputs and technology, value chain actors need access to financing; otherwise, production yields will stay low. Additionally, these acquisitions may raise the quality of raw materials generated for processing, allowing African goods to compete on a global scale.

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