Private sector and clusters development for agricultural transformation in Africa

This fifth chapter in the monograph Private sector’s role in agricultural transformation in Africa, published by IFPRI in September 2019, considers that custering, among other tools, offers the potential for improved coordination between value chains actors and agglomeration. Clusters are valuable organizational frameworks to support farmers and agri-enterprises development with the potential to link them to domestic and global agricultural value chains in a more efficient and sustainable manner. No universal formula exists for how clusters should be formed. However, in the context of Africa, with many smallholder farmers, limited networking, and minimal specialization, there is great need for government intervention.

The nature of agriculture clusters varies from country to country depending on the government’s role, national economic development policies, raw material and land availability, comparative and resource advantage, among others. African clusters face major challenges, including: (a) challenges of the knowledge revolution and increasing global competition; (b) lack of a critical mass of skills and talent; (c) weak links between businesses and knowledge institutions; (d) weak governmental and institutional support; and (e) resource depletion and failure to meet international standards.

The location of a given cluster is often crucial and should be based on grounded policy objectives with limited political interference and/or non-market driven initiatives. It is essential to consider locations near existing population centers, national/international transportation networks, provide easy access to labor, raw materials, suppliers, and distribution markets.