Agri-food processing in Sub-Saharan Africa: the role of the private sector

This third chapter in the monograph Private sector’s role in agricultural transformation in Africa, published by IFPRI in September 2019, is entitled 'The quiet revolution and emerging modern revolution in agri-food processing in sub-Saharan Africa'. It argues that the private sector in agri-food processing has been highly responsive and made a huge aggregate investment to meet the soaring demand for processed food by African urban and rural consumers. There has been a “Quiet Revolution” with the rapid proliferation of small and medium enterprises (SMEs), and an emerging “Modern Revolution” with domestic and foreign direct investment (FDI) large processors.

Processors are part of what we call the “Hidden Middle”. It is massive and dynamic, but tends to be largely “hidden” from policy debates except to wrongly think it is a “missing middle”. Governments have made several good moves that helped the revolutions in processing. Processing has “taken off” because demand is soaring, local farm production is increasing; small and large private processing investment is responding; and governments have liberalized and privatized markets, and built an initial base of the most critical factors, wholesale markets, roads, and some electrification. But there is still much to be done: the take-off could fly faster and higher and be more efficient and inclusive; it is constrained by inadequate infrastructure, policies, prevalent risk, uncertainty, and corruption.

Agri-food value chains in Africa are expanding rapidly, spurred by private businesses. Policies and public infrastructure provisioning should focus on leveraging this emerging private sector dynamism, especially of SMEs. They are the best vehicle to link small-scale farmers to markets and forge an inclusive agricultural transformation.