Lack of transport and energy capacity slows agro-industrial growth in West Africa

WEST AFRICA – The new Development Dynamics in Africa report released by the OECD and the African Union Commission warns that West Africa faces growing pressure as poor transport and unstable energy supply continue to slow agro-industrial growth.

Food contributes 35 percent of West Africa’s GDP, and farmers have raised production in recent years. Even so, poor rural roads and unstable electricity keep the region from meeting its rising needs.

The report explains that the region still depends heavily on imported food because producers struggle to move crops from fields to markets. SMEs in food processing also face high risks because of frequent power cuts.

These limits raise final food costs across the region. The OECD notes that food prices sit 30 to 40 percent above global levels for countries with similar income profiles. The report adds, “Despite the richness of their natural resources, countries in the region import processed food products, such as Sierra Leone, which leaves 75 percent of its arable land uncultivated and imports 80 percent of its ready-to-eat food products.”

Calls for investment in roads, storage, and energy remain urgent as regional demand for food is projected to reach USD 480 billion (approx US$480 billion) by 2030, compared to USD 126 billion (approx US$126 billion) in 2010.

Why the region still misses export chances

A second analysis, published by Strathmore Business School researcher Lilac Nachum, shows why Africa’s share of global agri-food exports has dropped from about 8 percent in 1960 to 4 percent in the early 2020s.

Nachum points out that Africa holds large tracts of arable land and strong growing conditions, yet still loses out due to weak financing, unclear land rights, slow logistics, and trade policies that do not support local processing.

Nachum writes, “Agricultural exports from Africa are not doing well. Four ways to change that” and identifies financing as the first area that needs action. Agriculture contributes up to 40 percent of GDP in many African countries but receives only about 1 percent of commercial lending.

Interest rates also sit higher than in most other sectors. South Africa’s Khula credit guarantee, backed by Sefa and commercial banks, shows how state-supported guarantees can help farmers secure loans. Kenya and Tanzania have adopted similar models with support from the EU and development banks.

Land rights remain another concern. More than 80 percent of Africa’s arable land is unregistered, which limits access to credit. Ethiopia’s land certificate program for 20 million smallholders improved rental activity, while Malawi’s redistribution of 15,000 hectares increased household income by 40 percent.

A final push for transport, energy, and processing

Both reports conclude that West Africa must strengthen transport corridors, cold chains, and electricity networks to support local food supply and exports.

Senegal lifted annual exports by 20 percent after improving rapid shipping, while Ethiopia’s floriculture sector grew after it expanded its cold and air transport systems.

The authors agree that good logistics and steady electricity will help farmers cut losses, support processing, and keep more value within the region. They stress that trade policies must push for local processing, supported by real investment in capacity.

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