Accelerating Africa’s Industrialization using Agribusiness as a Tool

The countries of the Global North (GN) have capitalised on technological advancements at the various levels of industrialization from 1884, when Maxim invented the machine gun to the 21st century when we now see the popularization of Artificial intelligence, robotics and nanotechnology. The GN have used this first mover opportunity to build for themselves a More Economically Developed Countries () with stable economies, high life expectancy, quality health care, quality education and high standard of living while the countries of the Global South, most of which are African countries have lagged behind in this regard, being victims of imperialism with little or no advancements, poor quality of life, low standard of living, low Gross domestic product and low human development index and have built Less Economically developed Countries (LEDC) and till date countries of the Global South have continued to play catch up with Countries of the Global North giving rise to the Rich-Poor Divide.

The above paragraph speaks volume on why industrialization has not been quite a recurring theme in the African context. Africa still embraces non-production economic system which has taken a toll on her social and economic development. With approximately 1.3 billion people living in 54 countries in Africa, its Gross Domestic Product (GDP) put together at 3.3 trillion dollars at a growth rate of 5.16% per capita, she is nowhere close to the GDP of the Unites States valued at 19 trillion dollars. This is the harsh reality we are currently faced with and that is why recession, inflation and food imports has continued to be part of Africa’s narrative for a long time and as indicated by the President of African Development Bank, Akin Adesina “Africa spends 35 billion US dollars on importing food and this number is projected to increase to 110 billion dollars by 2025, a rather alarming figure to be conscious of”.
In the African of today, the Agricultural sector is the lifeblood of most of its state-economies currently employing 65% of her citizens and responsible for 75% of its domestic trade, contributes 313 billion dollars annually, and experts believe that the sector has the capacity to develop to a trillion dollar market by 2030 with the potential to aid the fight against hunger and poverty.

The opportunities for agribusinesses are endless, Africa is largely characterised as having the world’s largest arable land resources, highest population growth rate with a high potential to achieve high economic returns. Foreign Direct investment in African Agribusiness was 10 billion dollars in 2010 alone and projected to reach 45 billion dollars by 2020 (John, 2015). Furthermore, it uses only 2% of its renewable water resources, whereas the global average use of these is 5%. This indicates that there are many currently untapped resources in Africa that could be used to enhance its agricultural productivity and output (Caroline, 2013).

The sad reality is that many African countries have refused to evolve in the way and manner they practice Agribusiness, poor and overworked smallholder farmers still make use of crude tools in rural communities to farm and that explains why the burgeoning young people at the centre of the fourth industrial revolution find it difficult to embrace Agriculture and leverage on the potentials the sector has to offer towards job creation and dealing with the menace of unemployment, and unfortunately due to the aforementioned, a breakneck figure of 10-12 million African youth continues to seek to enter the continent’s workforce for white collar jobs, an exercise in futility for many across the broad spectrum, this leaves the number of workers living in extreme poverty at an all-time high, according to International Labour Organization (ILO) Economist, Stefan Kulin, it expected to remain stubbornly above 114 million for the coming years affecting 40% of all employed people in 2018.

Agribusiness in Africa is prone to high risk, lower expected returns and low productivity and this has impeded the sector’s growth and opportunities leaving her to export basic and primary products and importing processed products at a higher cost. It is also important to note that this constrain is fuelled by limited access to capital, if agripreneurs can expand their access to more capital, electricity, better technology and irrigated land to grow high-value nutritious foods, and if African governments can work more closely with agribusinesses to feed the region’s fast-growing urban population (World Bank Report, 2013), then we can expect an explosion in productivity, production of high-valued products for export and to meet domestic needs.
Africa is at the verge of taking a leap to joining the fourth industrial revolution and Agribusiness offers the opportunity to do this vis-à-vis Precision Agriculture (PA). PA makes the practice of farming more accurate and controlled especially with respect to rearing livestock and growing crops commercially. It is an approach to farm management that uses Information technology (IT) to ensure that the crops and soil receive exactly what they need for optimum health and productivity, sustainability and protection of the environment (Magaret, 2016).

Accelerating Africa’s industrialization is central to our existence as a continent and it is pertinent to indicate that technology application to Agriculture can help us achieve this goal if its potentials are properly tapped however financing would obviously be a potential challenge., Government of African countries should stay true to raising their budgetary allocations to agriculture pegged at 10% according to the Malabo Declaration of 2003. International development organizations like the FAO, AFDB, IFAD, WFP, IITA amongst others must commit to providing development financing to foster public private partnership.

Private sector led innovative technologies need some form of blended financing as an emerging market that it is. Agribusinesses can be financially viable and/or sustainable with the aid of grants. Other innovative financing mechanisms can be explored to offer reliable and predictable financing for agriculture, concerted efforts should be made to catalyse investments into the agriculture sector of Nigeria to capitalize on the industry that is expected to be valued at 1 trillion dollar by 2030.

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