The FAO forecasts that global demand for agricultural products will increase by 50 percent between 2015 and 2050, driven by population growth, rising incomes and accelerating urbanisation. However, agricultural production is constrained by a limited supply of land resources and a primary production sector that is reaching peak capacity in many agricultural regions.

The agricultural sector in Africa has the natural resources needed to meet this shortfall. Sub-Saharan Africa has almost 50 percent of the world’s uncultivated arable land; vast pools of untapped water resources; and a large, growing and under-utilised agri-labour force.

In ‘The Mystery of Capital’, economist Hernando De Soto Polar proposed that the inability of people in low-income countries to access capital is the main constraint on economic development. The reason they can’t access capital, according to De Soto Polar, is the lack of a simple, unified legal property system, which would allow people to leverage their assets, thereby gaining access to capital, which would drive productivity and create wealth.

The agri-food sector in Sub-Saharan Africa seems to bear out this theory. Primary production is dominated by smallholders, who lack clear title to their land. The wider agribusiness sector is largely comprised of micro, small and medium enterprises, who also find it difficult to access the financial resources which would allow them to exploit local and international demand.

As a result, the agri-food value chain is under-developed by international standards, with little value-add in the sector, either through processing, manufacturing, distribution or marketing. Primary production dominates the industry, accounting for 72 percent of the agri-food contribution to GDP. This is in stark contrast to the US agri-food sector, where value-add makes a contribution thirteen times greater than primary production.

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