CONTEXT OF AGRO-INDUSTRY IN AFRICA
Context of agro-industry in Africa
1 Chapter 1 | Context of Agro-industry in Africa Karl Wohlmuth and Patrick M. Kormawa
Issues Several studies show that conditions for dynamic agro-industrial development and the promotion of agribusiness in Africa are yet to be achieved, but that some progress has been made towards this end (UNIDO 2011; FAO 2008; OECD/DC 2008; Larsen et al. 2009). 1 Even in cases where willingness to implement reform programmes is strong, most of the preconditions and implementation conditions have not been met in full. The present study focuses on eight African countries: Cameroon, Ethiopia, Kenya, Mali, Nigeria, Senegal, South Africa and Zambia, and aims to reveal the success factors behind agro-industrial and agribusiness development processes. Africa’s potential for agribusiness development is increasingly the subject of discussion at national and regional policy levels, as well in academic circles (see FAO/UNIDO/IFAD 2008, UNIDO 2009a, AU 2010, AU 2008a and 2008b, Mkandawire 2008, and FARA 2006), and this sample of countries provides a fitting basis for comparative analysis. Evidence on Agribusinesses in Cluster Analyses: Clusters, a structure of some large and many micro and small enterprises, are considered as a means of tackling Africa’s “missing middle” problem in industry. Clusters may compensate for the disadvantages these enterprises have by allowing for collective learning, joint action, and access to shared infrastructure, as well as benefiting from certain economies of scale. Case studies of agro-industrial clusters are now available and show the agribusiness dynamics. Dynamic agro-industrial development in clusters is related to knowledge flows and to innovative activity. Clusters with such a focus have a great presence in some African countries; textile and wood clusters in Kenya, furniture manufacture in Egypt and Tanzania, and fish processing in Kenya and Uganda demonstrate that spontaneous rather than created clusters, and clusters in towns rather than in rural areas, generate greater knowledge flows and more innovative activity (Oyelaran-Oyeyinka & McCormick, eds. 2007). Access of agribusiness clusters to knowledge institutions is a key factor, as cases from Nigeria to South Africa reveal (Uzor 2009, Zheng, ed. 2008). Evidence on Agribusinesses in Value Chain Analyses: Further sources of case studies to be used for comparative assessment are value chain analyses. Value chain analyses for citrus (from South Africa), clothing (from Mauritius and South Africa), cocoa (from Ghana), coffee (from Kenya, Ethiopia, Tanzania, and Uganda), cotton (from Tanzania and Zimbabwe) and fresh vegetables (from Kenya and Tanzania) add to the knowledge base by highlighting countries and products through the whole value chain (see Gibbon & Ponte 2005 and UNIDO 2011). Comparisons of agro-industry “success stories” in Latin America and Asia provide useful contrasts with African experience for deriving appropriate lessons and policy conclusions (see Kjöllerström & Dallto 2007; UNIDO 2011). Heterogeneity of Agribusiness: Agribusiness is a heterogeneous activity, thus case studies need to explore a variety of subsectors. Agro-industries 2 comprise food sectors (processing of staple 1
The Gambia, Ghana, Kenya, Mali, Mozambique, Senegal, Tanzania, Uganda, and Zambia.
2
According to the International Standard Industrial Classification (ISIC), agro-industries consist of six subsectors, namely: food and beverages; tobacco products; paper and wood products; textiles, footwear and apparel; leather products, and
7