September 19, Washington, D.C.—Strategic investments can help unlock potential for agribusiness growth in African nations with low agribusiness competitiveness, food security and agricultural productivity, according to recent analysis on African agribusiness competitiveness by Dr. Suresh Babu, head, capacity strengthening, at the International Food Policy Research Institute (IFPRI).
“African countries have a very high potential to transform their agricultural sector by increasing the competitiveness of their agribusiness,” said Babu, lead author of the study. “Competitiveness in agribusiness has a feedback effect that helps in sustaining food security and increasing agricultural productivity.”
High competitiveness can bring cost-effective goods to consumers while opening new pathways for value chain addition for farmers. “Agribusiness competitiveness hasn’t received adequate attention so far because countries have been struggling to improve agricultural productivity. But if you take your product outside Africa, you achieve both geographic and business competitiveness,” Babu added.
To enhance agribusiness competitiveness, countries should identify successful models of public-private partnerships (PPP) and business to business (B2B) alliances to raise value chain competitiveness and scale, in addition to encouraging entrepreneurship, access to capital and building stronger market linkages.
Rwanda and Kenya rank “high” on the agribusiness competitiveness and agricultural productivity scales, but “low” on food security, highlighting how policies in these countries have failed to utilize gains from trade to deliver food security to their populations. “Despite tremendous progress improving food security in Rwanda and Kenya, both countries need stronger policy interventions to improve the allocation of resources and improve general welfare,” said Babu.
Seven countries – Guinea, Niger, Burkina Faso, Burundi, DRC, Nigeria, Togo -- rank “low” on food security and agribusiness competitiveness, while South Africa ranks “high” on both parameters.
Countries such as Botswana, Tunisia, Ghana, Uganda and Algeria, which rank “medium” on food security and agribusiness competitiveness, hold immense potential to improve their competitiveness. “These countries can transform agriculture sector by increasing mechanization and commercialization, and can strategically decide on the composition of crops to improve food security and competitiveness,” said Babu.
On the agribusiness competitiveness and agricultural productivity scale, 11 countries—Seychelles, Zimbabwe, Sao Tome and Principe, Liberia, Guinea, Burundi, Algeria, Chad, Djibouti, Mauritania and DRC—ranked “low”.
“Increases in agricultural productivity must come from intensification rather than exploitation of additional natural resources,” said Babu. “We can draw lessons from China, which created scores of research and design institutes and universities focusing on agricultural innovation,” he added.
The report also recommends policy lessons for countries for enhancing agribusiness competitiveness. A competitive agribusiness sector is one characterized by efficient land markets, efficient management of agriculture risks, technology adoption and innovation, sustainable management of natural resources, efficient institutions, effective infrastructure, conducive economic environment, investment in health and education and wide market access.
This analysis was developed using WEF’s Global Competitiveness Index, the Ballasa index for agricultural competitiveness, Doing Business Indicator and Global Food Security Index (Economist Group).
Read the full report here: http://www.tandfonline.com/doi/abs/10.1080/23322373.2017.1319721
The International Food Policy Research Institute (IFPRI) seeks sustainable solutions for ending hunger and poverty. IFPRI was established in 1975 to identify and analyze alternative national and international strategies and policies for meeting the food needs of the developing world, with particular emphasis on low-income countries and on the poorer groups in those countries Visit: www.ifpri.org