IFAD RESEARCH SERIES 3 - Fostering inclusive outcomes in sub-Saharan African agriculture: improving agricultural productivity and expanding agribusiness opportunities

Despite strong per capita income growth, the structure of sub-Saharan Africa’s economies has not changed markedly in recent decades. In spite of a rapidly growing labour force and urbanizing populations, employment growth in rural areas in general and in non-farm sectors in particular has been slow, and poverty levels in those areas remain relatively higher than in urban areas. So, the key question is: how to catalyse economic transformations that foster inclusive and sustainable development? This is where the role of agriculture is key, given that the overwhelming majority of the population across the continent depends on it as a livelihood source. The case for increasing agricultural productivity to accelerate transformation, investment and industrialization is strongly supported by well-established conceptual frameworks and historical empirical evidence. Though recent gains have been encouraging, agricultural productivity in sub-Saharan Africa still lags behind other regions. The relatively low productivity has led to a loss of competitiveness in agricultural exports and the declining share of the region’s participation in global agricultural trade. Nonetheless, the potential of building on recent gains and developing an agribusiness sector that is responsive to and benefits from the work of smallholder farmers is enormous. This requires the prioritization of two main areas for policy and investment: (i) supporting the emergence of a modern agro‑industrial sector; and (ii) developing the potential of smallholders to engage in high-value activities across agricultural value chains.