info.afrindex.com
China-Africa Trade Information Service
info.afrindex.com
China-Africa Trade Information Service
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A recent WTO report assesses the Depth of global value chain integration. For advanced economies, this value is usually around 33% (meaning that 33% of products imported into these countries will add value or switch to the country's export market), while for low-income and emerging market economies (excluding sub-Saharan African countries), the value chain is 21-22%.
Across the board, East Africa outperforms West Africa in terms of how integrated their economies are in global value chains. There are huge opportunities for increasing West Africa’s participation in regional and global value chains while also reducing the region's import bill.
The opportunity exists to transform the sector in West Africa and there are already signs of progress in countries like Senegal where food processing is the largest manufacturing sub-sector and has grown by 7.4% per year between 2000 and 2010. The Government's increased investments in agriculture – totalling more than 10% of GDP per year are paying off and leading to higher productivity as production gets more specialised and commercialised.
These investments coupled with strong demographic growth, a rapidly urbanising population where around 45% of the population now live in cities and a small, but growing middle class that values the convenience and variety of processed foods, all contribute to this growth. Dealing with issues along the entire value chain could enable West African countries to harness the full potential of the agricultural sector. Such efforts though need to tackle various issues along the value chain and bring together different public and private sector players who are working in the sector.
With the African food market expected to grow to $1 trillion by 2030 from the current $300 billion, and a current shockingly high import food bill of $30-50 billion, there is a great opportunity for the continent's agribusiness industry if investments can be made in processing, logistics, market infrastructure and retail networks that can commercialise value chains on the continent. With governments already hard-pressed to finance other components of their agricultural sectors, this calls for partnerships with not only public sector players but also private sector players investing along different parts of the value chain.
