Africa: five ways to rebalance the value of agri-food chains

Africa is mak­ing an increas­ing con­tri­bu­tion to glob­al food sup­plies. How­ever, this devel­op­ment is accom­pan­ied by a struc­tur­al imbal­ance: the con­tin­ent remains largely excluded from value cap­ture in inter­na­tion­al agri-food chains. High value-added activ­it­ies – pro­cessing, logist­ics, dis­tri­bu­tion, research and devel­op­ment, fin­an­cial ser­vices – remain mainly con­cen­trated in north­ern coun­tries. This con­fig­ur­a­tion means that Africa provides the pro­duc­tion while oth­er regions cap­ture most of the eco­nom­ic mar­gins. At the same time, one in five Afric­ans remains undernourished.

Agri-food chains are organ­ised into four main seg­ments: primary agri­cul­tur­al pro­duc­tion, indus­tri­al pro­cessing, logist­ics and dis­tri­bu­tion, and intan­gible ser­vices (fin­ance, cer­ti­fic­a­tion, research, intel­lec­tu­al prop­erty). Eco­nom­ic ana­lyses show that the share of value cap­tured by upstream agri­cul­ture remains lim­ited, gen­er­ally less than 20% of the final value of products. Eco­nom­ic value is con­cen­trated in post-farm seg­ments, which are char­ac­ter­ised by high cap­it­al intens­ity, strong tech­no­lo­gic­al con­tent and sig­ni­fic­ant bar­ri­ers to entry.

This con­cen­tra­tion explains why these activ­it­ies are loc­ated in developed eco­nom­ies, whose roots lie in the eco­nom­ic organ­isa­tion inher­ited from the colo­ni­al peri­od. The export struc­tures estab­lished dur­ing this peri­od have shaped a sys­tem in which Africa focuses on primary pro­duc­tion, while high value-added oper­a­tions remain loc­ated else­where. A cur­rent chal­lenge for the region is there­fore to enable Afric­an ter­rit­or­ies to retain more eco­nom­ic value and strengthen their food sovereignty.

For Africa, build­ing food sov­er­eignty involves a gradu­al shift towards these high value-added seg­ments. This trans­ition requires a com­bin­a­tion of three levers: social innov­a­tion to trans­form organ­isa­tion­al rela­tion­ships and strengthen col­lect­ive capa­cit­ies, sci­entif­ic invest­ment to devel­op tech­no­lo­gies adap­ted to loc­al con­texts, and ter­rit­ori­al struc­tur­ing to cre­ate favour­able eco­sys­tems. These changes will determ­ine the con­tin­ent’s abil­ity to trans­form its agri­cul­tur­al poten­tial into inclus­ive and sus­tain­able eco­nom­ic development.

Social innov­a­tion is a key driver in this regard, offer­ing solu­tions to prob­lems that neither mar­ket mech­an­isms nor tra­di­tion­al pub­lic policies can solve on their own. Here are five pos­sible areas for transformation.

#1 Strengthening the capacities of local actors

In many rur­al areas of Africa, pro­du­cers are depend­ent on inter­me­di­ar­ies who cap­ture a sig­ni­fic­ant share of the mar­gins. This struc­tur­al depend­ence is largely due to land own­er­ship pat­terns: in sub-Saha­ran Africa, nearly 80% of farms are less than 2 hec­tares in size¹, and this major­ity of farm­ers cul­tiv­ate only about 25% of agri­cul­tur­al land. In oth­er words, the vast major­ity of small­hold­ers share a very small frac­tion of the land, while a minor­ity of lar­ger farms con­trol the major­ity of cul­tiv­ated land. This frag­ment­a­tion of land own­er­ship makes small pro­du­cers par­tic­u­larly vul­ner­able. It lim­its their bar­gain­ing power, their access to form­al mar­kets and their abil­ity to organ­ise collectively.

Insti­tu­tions such as the Socio-Eco­nom­ic Impact Insti­tute at Mohammed VI Poly­tech­nic Uni­ver­sity in Morocco are devel­op­ing pro­grammes that com­bine par­ti­cip­at­ory dia­gnostics, pro­mo­tion of loc­al know­ledge, entre­pren­eur­i­al train­ing and sup­port for the struc­tur­ing of cooper­at­ives. When pro­du­cers acquire these skills, they can nego­ti­ate more favour­ably, reduce their depend­ence on inter­me­di­ar­ies and struc­ture their activ­it­ies in a more sus­tain­able man­ner. Since its cre­ation in 2019 under the name ‘Social Innov­a­tion Lab’, this Insti­tute has been able to sup­port 15 stra­tegic sec­tors for nutri­tion­al secur­ity² in Morocco. These efforts have res­ul­ted in the pro­mo­tion of sus­tain­able agri­cul­tur­al prac­tices, the devel­op­ment of farm­ers’ tech­nic­al skills and the improve­ment of com­mer­cial oppor­tun­it­ies, with the aim of ensur­ing great­er food security.

#2 Repositioning the company as a regional player

Some com­pan­ies are gradu­ally shift­ing their busi­ness mod­el towards a ter­rit­ori­al approach. This trans­form­a­tion involves secur­ing nat­ur­al resources (soil, water, biod­iversity) in a con­text where eco­sys­tem degrad­a­tion is now con­sidered one of the most severe glob­al risks over the next ten years, accord­ing to the WEF’s Glob­al Risks Report 2023³. In this dynam­ic, busi­ness lead­ers are becom­ing more aware of these issues: accord­ing to the Deloitte CxO Sus­tain­ab­il­ity Report 2023⁴, 61% believe that cli­mate change will have a high or very high impact on their organ­isa­tion’s strategy and oper­a­tions over the next three years, while 75% say they have increased their sus­tain­ab­il­ity invest­ments over the past year.

Thanks to this aware­ness, com­pan­ies are increas­ingly enga­ging in loc­ally based multi-stake­hold­er part­ner­ships and dir­ect­ing their invest­ments towards long-term impact. The Live­li­hoods Fund illus­trates this approach. Fun­ded by 21 mul­tina­tion­als, it sup­ports eco­lo­gic­al res­tor­a­tion pro­jects that gen­er­ate car­bon cred­its and aim to sta­bil­ise agri­cul­tur­al sec­tors in the long term. In Seneg­al, for example⁵, not­ing the advanced degrad­a­tion of man­groves, more than 100,000 vil­la­gers have been mobil­ised by the fund since 2009 to restore these eco­sys­tems, which are essen­tial to loc­al fish­ery resources: 80 mil­lion man­grove trees were replanted between the Casamance and Sine Saloum estu­ar­ies. In 2019, 10 years after the launch of this pro­ject, a social and envir­on­ment­al impact study showed that 95% of the inhab­it­ants sur­veyed noticed at least one pos­it­ive effect on their food secur­ity: the return of fish, oysters and shrimps, an increase in rice fields… the eco­sys­tem has regenerated.

This type of ini­ti­at­ive shows that when a com­pany becomes involved in region­al devel­op­ment, it can con­trib­ute to the sus­tain­able res­tor­a­tion of eco­sys­tems while strength­en­ing the live­li­hoods of loc­al com­munit­ies. How­ever, the wide­spread adop­tion of such approaches requires future lead­ers to be able to integ­rate these socio-eco­lo­gic­al prin­ciples into their eco­nom­ic mod­els from the out­set of their stud­ies. How­ever, accord­ing to a study by Acosta et al.⁶, although 85% of MBA stu­dents say they are very inter­ested in envir­on­ment­al issues, they still struggle to clearly link these issues to eco­nom­ic dynam­ics, reveal­ing a par­tial under­stand­ing of the inter­de­pend­en­cies between devel­op­ment, nat­ur­al resources and competitiveness.

#3 Integrating a market-logistics-research vision

Pro­duc­tion frag­ment­a­tion, infra­struc­ture defi­cien­cies and expos­ure to cli­mate haz­ards are obstacles to value reten­tion by loc­al areas. To address this, sev­er­al com­ple­ment­ary approaches are being developed and are prov­ing effect­ive in the field. Some ini­ti­at­ives are revers­ing the tra­di­tion­al logic by start­ing with the require­ments of end mar­kets rather than pro­duc­tion sup­ply. The Badee Fund, a social enter­prise accel­er­at­or in Morocco, illus­trates this approach: the organ­isa­tion, foun­ded just two years ago, first iden­ti­fies the stand­ards required by the mar­kets, then sup­ports Moroc­can start-ups and agri­cul­tur­al cooper­at­ives. To date, 47,609 busi­nesses have been sup­por­ted, rep­res­ent­ing 63% of all cooper­at­ives in Morocco, accord­ing to stat­ist­ics from the Office for the Devel­op­ment of Cooper­at­ive (ODCO)⁷, in their reg­u­lat­ory com­pli­ance, the estab­lish­ment of trace­ab­il­ity sys­tems and the struc­tur­ing of the value chain. This approach enables pro­du­cers, mainly women, to respond pre­cisely to buy­ers’ expect­a­tions and access more luc­rat­ive markets.

Sus­tain­able influ­ence on agri-food sys­tems requires the form­a­tion of multi-stake­hold­er coalitions

At the same time, digit­al plat­forms facil­it­ate con­nec­tions between pro­du­cers and pro­cessors. Agros­fer, for example, based in Ben­in, Côte d’Ivoire, Seneg­al, Togo and France, helps reduce post-har­vest losses (estim­ated at 100 mil­lion tonnes annu­ally in sub-Saha­ran Africa), secures access to inputs and form­al­ises pro­duc­tion con­tracts. These plat­forms act as trus­ted inter­me­di­ar­ies between pro­du­cer cooper­at­ives and pro­cessing indus­tries, help­ing to sta­bil­ise sup­plies while ensur­ing more pre­dict­able incomes for farm­ers. Since its cre­ation, Agros­fer has con­nec­ted 25,000 farm­ers to sev­en agro-indus­tri­al com­pan­ies. The digit­al plat­form has three agrost­ores in West Africa, through which nearly 250,000 tonnes of agri­cul­tur­al products have already passed. The example of Agros­fer illus­trates the import­ance of digit­ising agri­cul­ture in order to meet the pop­u­la­tion growth fore­cast for 2050, for which, accord­ing to the FAO, the glob­al agri­cul­tur­al sec­tor will need to pro­duce up to 70% more food than cur­rent levels⁸.

The integ­ra­tion of sci­entif­ic research into indus­tri­al mod­els is anoth­er lever for trans­form­a­tion. The Ivori­an com­pany Cashew Coast, which spe­cial­ises in cashew nut pro­cessing, is work­ing with CIRAD to integ­rate cli­mate fore­cast­ing, life cycle ana­lyses, soil fer­til­ity pre­ser­va­tion and defor­est­a­tion pre­ven­tion into its oper­a­tions. This col­lab­or­a­tion between sci­ence and industry helps to secure pro­duc­tion bases while redu­cing the envir­on­ment­al foot­print of activ­it­ies. Côte d’Ivoire is the world’s lead­ing pro­du­cer of cashew nuts, with more than one mil­lion tonnes of cashew nuts⁹ pro­duced in 2023 and a sus­tained increase in loc­al pro­cessing thanks to com­pan­ies such as Cashew Coast, which aims to devel­op the cashew nut sec­tor through entirely loc­al pro­cessing and a more equit­able redis­tri­bu­tion of profits to pro­du­cers, in par­tic­u­lar through a ver­tic­al integ­ra­tion mod­el based on a net­work of cooper­at­ives that pro­motes long-term partnerships.

#4 Building coalitions to influence public policy

Isol­ated innov­a­tions have lim­ited struc­tur­al impact. Last­ing influ­ence on agri-food sys­tems requires the form­a­tion of multi-stake­hold­er coali­tions. In Seneg­al, the DyTAES (Dynamique pour la Trans­ition Agroé­co­lo­gique au Sénégal) coali­tion brings togeth­er pro­du­cers, NGOs, research­ers, busi­nesses and loc­al gov­ern­ment rep­res­ent­at­ives. This mobil­isa­tion con­trib­uted to the adop­tion of the first nation­al agroe­co­lo­gic­al trans­ition strategy in West Africa, includ­ing meas­ures such as sub­sidies for organ­ic fer­til­isers. These coali­tions make it pos­sible to influ­ence the devel­op­ment of sec­tor­al stand­ards, secure pub­lic incent­ive mech­an­isms and guide invest­ment flows. DyTAES suc­cess­fully advoc­ated for this fol­low­ing a nation­al con­sulta­tion pro­cess¹⁰ involving more than a thou­sand stake­hold­ers (farm­ers, pro­cessors, NGOs, research­ers, busi­nesses, loc­al author­it­ies, etc.) in sev­en major agro-eco­lo­gic­al zones. The assess­ment iden­ti­fied 15 struc­tur­al chal­lenges for Sene­g­alese agri­cul­ture, the most import­ant of which is the devel­op­ment of fam­ily farm­ing, which accounts for more than 95% of the agri­cul­tur­al work­force, accord­ing to the Nation­al Coun­cil for Con­sulta­tion and Cooper­a­tion of Rur­al People in Seneg­al (CNCR). Oth­er pri­or­it­ies include ensur­ing food sov­er­eignty, mak­ing the sec­tor attract­ive to young people, pro­tect­ing water resources and restor­ing land.All of these issues give the agroe­co­lo­gic­al trans­ition strategy its glob­al scope.

#5 Adapting financing mechanisms to African contexts

Small and medi­um-sized Afric­an agri-food busi­nesses face dif­fi­culties in access­ing fin­ance. Fin­an­cial insti­tu­tions per­ceive these busi­nesses as high risk, as they have lim­ited col­lat­er­al and are often poorly struc­tured. Impact fin­ance and blen­ded fin­ance mech­an­isms (com­bin­ing pub­lic funds and private cap­it­al) help to mit­ig­ate these con­straints. Sub-Saha­ran Africa accounts for 12% of glob­al impact invest­ment flows (USD 25 bil­lion in 2021), accord­ing to a 2024 study by the Found­a­tion for Stud­ies and Research in Inter­na­tion­al Devel­op­ment (FERDI)¹¹, and almost all of the impact funds iden­ti­fied by this study do not ori­gin­ate from the Afric­an con­tin­ent and are headquartered in North Amer­ica or Europe. The main chal­lenge there­fore remains the mobil­isa­tion of Afric­an domest­ic sav­ings and the estab­lish­ment of spe­cial­ised loc­al fin­an­cial insti­tu­tions. Appro­pri­ate fin­an­cing enables invest­ment in high value-added seg­ments: pro­cessing, stor­age infra­struc­ture, logist­ics sys­tems and research capabilities.

Rebal­an­cing Afric­an agri-food chains is a chal­lenge that affects food sov­er­eignty, sus­tain­able devel­op­ment and eco­nom­ic equity. This trans­form­a­tion requires a recon­fig­ur­a­tion of pro­duc­tion meth­ods, skills devel­op­ment and coordin­a­tion between sci­entif­ic research, fin­an­cial mech­an­isms, entre­pren­eur­i­al dynam­ics and ter­rit­ori­al devel­op­ment. The estab­lish­ment of region­al agri-food pro­cessing plat­forms, the devel­op­ment of loc­ally based invest­ment funds and the cre­ation of logist­ics integ­ra­tion infra­struc­ture are essen­tial levers to enable ter­rit­or­ies to gradu­ally move up to high value-added segments.

The trans­form­a­tion of Afric­an agri-food chains is part of a long-term pro­cess that requires the coordin­ated mobil­isa­tion of mul­tiple act­ors: gov­ern­ments, loc­al author­it­ies, the private sec­tor, research insti­tu­tions, civil soci­ety organ­isa­tions and pro­du­cer organ­isa­tions. Exper­i­ences in Morocco, Seneg­al and Côte d’Ivoire show that innov­at­ive approaches based on col­lab­or­a­tion and loc­al roots can gradu­ally change the bal­ance of power in value chains.

The suc­cess of this trans­ition will determ­ine the Afric­an con­tin­ent’s abil­ity to trans­form its agri­cul­tur­al poten­tial into a driver of inclus­ive eco­nom­ic devel­op­ment, sus­tain­able food secur­ity and resi­li­ence in the face of cli­mate and demo­graph­ic chal­lenges. Social innov­a­tion, by chan­ging organ­isa­tion­al rela­tion­ships and strength­en­ing col­lect­ive capa­cit­ies, is a stra­tegic lever for sup­port­ing this struc­tur­al evol­u­tion of Afric­an agri-food chains.