By Brandon Moss
Africa is the most endowed continent in terms of agricultural potential, yet it remains a marginal player in global agribusiness. This paradox lies at the heart of Africa’s development challenge. Nearly half of the world’s arable land is located on the continent, most of it suitable for crop production, sparsely populated, and largely unprotected or unfarmed. Africa’s climate supports the cultivation of 80 percent of the foods consumed globally. Economic theory would suggest that such conditions should translate into strong export performance. Instead, Africa’s share of global agricultural exports has steadily declined, falling from about 8 percent in 1960 to just 4 percent in the early 2020s, according to World Bank data.
Despite agribusiness being the largest contributor to GDP and employment, policymakers have largely neglected its export performance. Government spending on the sector averages only 4 percent, far below its economic significance. While countries such as Mali and South Sudan allocate slightly more, at 8 and 7 percent respectively, others like Kenya and Ghana spend less than 3 percent. Many governments have instead prioritized manufacturing as the pathway to global integration, leaving agriculture underfunded and underdeveloped.
Agribusiness encompasses the full range of activities involved in producing, processing, distributing, and marketing agricultural products. Based on more than three decades of research, consulting, and teaching on global markets and development, I argue that agriculture could serve as Africa’s most effective route to integration into the world economy. To achieve this, four key reforms are necessary: improving access to capital, documenting land, designing targeted cross-border policies, and strategically employing trade policy.
Capital scarcity remains the most serious constraint. Financial institutions are reluctant to lend to agribusiness due to high risks, long investment horizons, weak collateral, and vulnerability to price shocks. Agriculture receives only about 1 percent of commercial lending despite contributing between 25 and 40 percent of GDP in many countries. Lending rates are often double the economy-wide average. Governments can help close this gap by expanding public lending and enabling private sector participation through risk-sharing mechanisms. South Africa’s Khula Credit Guarantee Scheme, replicated in Kenya and Tanzania with EU and development bank support, demonstrates how government-backed guarantees can unlock finance for farmers. Private finance is also growing, with venture capital and micro-lending platforms increasingly supporting agribusiness startups.
Land documentation is another critical reform. More than 80 percent of Africa’s arable land is undocumented, governed by customary tenure systems poorly integrated into formal law. Weak land administration deters investment and limits land’s use as collateral. Transfers are costlier and slower than in OECD countries, constraining access to credit and economies of scale. Recent reforms show the benefits of formalisation. Ethiopia issued certificates to 20 million smallholders, boosting rental activity. Malawi’s redistribution of 15,000 hectares raised household incomes by 40 percent. Rwanda’s comprehensive land mapping improved transparency and investment incentives.
Cross-border policies must also be tailored to regional and global markets. Intra-African trade benefits from proximity and regulatory harmonisation, as demonstrated by the East African Community’s trade facilitation measures, which increased dairy exports sixty-five-fold within a decade. For exports to non-African markets, infrastructure and logistics investments are essential. Senegal’s investment in high-speed shipping increased exports by 20 percent annually, while Ethiopia’s flower industry thrived thanks to air transport and cold-chain systems. Crop-specific strategies are equally important. Kenya’s targeted avocado export policy transformed it into Africa’s largest exporter, while Mali’s mango export strategy built a competitive value chain serving European markets.
Finally, trade policy must be used as a tool for upgrading. African exporters primarily sell raw, low-value materials. Nigeria, a leading tomato producer, exports nearly all production unprocessed while importing paste. Less than 5 percent of Kenyan tea is branded. Trade policy can reverse this imbalance by encouraging domestic processing. The East African Community’s differentiated tariff structure successfully promoted value addition by lowering duties on intermediate goods while protecting local food processing. Governments could adopt similar measures, but bans on raw exports alone are insufficient without investment in processing capacity.
Africa’s agribusiness sector embodies the continent’s untapped potential for structural transformation. With abundant land, favourable climate, and growing domestic demand, Africa possesses clear comparative advantages. The reforms outlined—enhancing access to finance, formalising land rights, implementing targeted cross-border initiatives, and using trade policy to encourage upgrading—form a decisive policy agenda to reverse Africa’s declining share of world agricultural trade. A shift towards agriculture-led development is essential. Implementing this agenda will enable African countries to strengthen their economic position both at home and in global markets.