Agribusiness for Africa’s Prosperity. Country Case Studies
human development indicators are still unfavourable. High imports of food relative to the exports of food show that the import substitution potential is great (depending however on the respective elasticity of demand). The low level of processing agricultural raw materials signifies a considerable potential for value addition, employment generation, etc. Value chain development for major and strategic crops is seen as a way to create additional benefits from value addition and employment generation, but also to improve international competitiveness. It is possible to solve the twin problems of budget and current account imbalances by applying rigorously the new strategy of agro-industrial development and agribusiness promotion. Value addition in agro-industries can generate additional tax revenues as well as foreign exchange earnings. The share of agro-industries in manufacturing value added (and also the share of agro-industries in GDP) is considerable, but is not proportional to the opportunities which the country has with its large agricultural resource basis. Detailed analysis in the case study shows that the food industry is dominating strongly the agro-industry; this also means that other agro-based industries are largely neglected in the country although potentials are there. Trade analysis reveals that the opportunities for agro-industry exports are still untapped. However, there is a considerable potential when looking at the agricultural exports of the country. Tomatoes, beans, mangoes, and watermelons are produced competitively and are exported in unprocessed form to Europe, Asia, and Latin America where they are manufactured into processed foodstuffs. Data on agro-industrial establishments show that some de-industrialization process has taken place over the past decades, and that a new strategy for developing agro-industries may reverse the trend. The unfavourable economic development of the country and the fact that the abundant resources in agriculture, forestry, fisheries, and livestock are not yet exploited gave signals to policymakers to work on new growth and development initiatives based on agro-industrial development and the promotion of agribusiness. New programmes of the government since 2007 directly address a new growth strategy based on agriculture and agro-industrialization; there is a move towards agroindustry revitalization in the country. The move towards new policies and strategies is also intended to be more inclusive than past policies have been in terms of poverty reduction and employment generation. The agro-industrial market potential for the poorer segments in Senegalese society has therefore also to be assessed carefully, as there is still a trend to look mainly at the urban middle classes when proposing strategies for agro-industry revitalization. The author of the case study gives some directions in this regard. Agro-industry trade associations in Senegal are regrettably very weak and disorganized and so have not taken the lead in debates on relevant policy formulation. PPPs are weak or in some areas nonexistent. However, although the new agro-industrial strategy was already launched in 2007, the results so far with regards to an effective dialogue between government and the private sector and a dynamic and sustainable process of policy change are not encouraging. It is considered as very important to give the private sector a greater role in self-organization and in policy formation. Some new programmes for agricultural development and some studies on the upgrading of agroindustrial value chains (for promoting processing of fruits, crops, and fish) were inaugurated recently and new projects wait now for implementation and evaluation. The major preconditions for a new agro-industry strategy are reflected by the policymakers, and the programmes should be organized on the basis of the key policy factors that matter. Weaknesses in the implementation of the new strategy have already emerged, and it is not clear how the problems will be solved. A dialogue between policymakers and the private sector may help in this context; major donor agencies have also a role to play. An effective import substitution has not yet been achieved because of product quality problems and storage constraints at all levels of the production chain; changing this unfavourable situation was a main reason for proposing the new strategy. The examples for agro-industrial value chain development as presented in the case study show the huge potential, but the requirements for 28