Upgrading Africa’s Agricultural Value Chains—Catalysing Business Model Innovations

Abstract

Agriculture plays a crucial role in Africa. Agriculture is the base of many economies and a significant sector of employment. However, the agricultural sector underperforms and as a result Africa is food insecure and economies that are largely powered by agriculture remain weak. Indeed, a huge and growing food import bill is a testimony to the underperformance of Africa’s agricultural sector. The potential of agriculture remains untapped and indeed the significant opportunity for an agricultural driven African industry has yet to be exploited, though urbanisation has created demand for processed and convenient foods and thus a ready market for food processing sectors. Developing a dynamic agro-processing sector will require the development of well-functioning agricultural value chains. However, agricultural value chains are plagued by many challenges that make it hard for them to deliver this.  These challenges will need to be addressed. Much of this will call for many innovations along the agricultural value chains. Studies done by ACET and others have revealed emerging innovations that are addressing many of the challenges and that have potential for being scaled and replicated. Agricultural policy makers need to understand the role of innovations across the value chain and in particular business model innovations. Policy should then seek to catalyse and scale innovation. This paper looks at a number of business model innovations that have the potential to upgrade agricultural value chains and support the emergence of a strong food processing sector and gives policy recommendations.