Africa’s agriculture supply chain crying out for sustainable funding

The importance of agriculture in Africa cannot be overstated. Studies by Mckinsey show that nearly 23 percent of sub-Saharan Africa’s GDP comes from agriculture.

This, coupled with the fact that agriculture employs an estimated 70 percent of Africa’s population makes it a critical if not the most important sector in the continent.

The World Bank projects that agriculture and agribusiness in Africa will grow to be a $1 trillion industry by 2030.

To achieve this outcome, several actions need to take place. Among them is building a sustainable and well-funded agricultural supply chain.

Also read: OTIENO: Support agri-food supply chains to curb hunger, poverty in the country

Today, there is a wide array of challenges plaguing the agricultural supply chain – including a lack of sufficient inputs, a lack of sustainable storage facilities and transportation services, limited market access, and limited training.

Interestingly, most, if not all, of these challenges can be solved with adequate access to financing.

Take storage and transportation as an example.

Storage is a critical aspect of the agricultural supply chain; it ensures the preservation of food from the point of production to the point of distribution.

A lack thereof leads to wastage of produce, affecting the food supply.

With a consistent and sustainable source of funding, issues such as storage can be addressed, enabling dealers in the warehousing industry to scale and acquire more facilities proportionate to the amount of produce they obtain.

One of the most important parts of the agriculture supply chain are agricultural small and medium-sized businesses (agri-SMBs).

These businesses are the glue that connects millions of farmers with the market, and their ability to trade directly impacts the sucess of the supply chain.

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The decision to invest in agricultural produce is highly dependent on the financial instruments available to these agri-SMBs and in effect direclty impacts the food security and livelihood of the local population.

Limited financing options also inhibits argi-SMBs from adopting better technologies that would otherwise assist in making crucial decisions that can improve the efficiency of their business.

When either one part of the supply chain is affected, it causes detrimental effects to the entire supply chain.

Source: Business Daily