Agribusiness: Potential for Fostering Regional Growth

Agriculture accounts for 35% of the Gross Domestic Product in West Africa (ECOWAP, 2013), and remains the largest contributor to GDP across West African countries.

In fact, the region is recognized as an agricultural powerhouse and serves as the number one producer of food and cash crops such as cassava, yam, cocoa, cocoyam, cowpea, and sorghum.

Sadly, formal intra-regional trade remains relatively low at 7.61% of total exports in 2012, according to UNCTAD. However, anecdotal evidence suggests significant informal trade across borders. This reality is driven by poor cross-border and trade facilitation infrastructure, weak human, national and regional institutions, opaque policies and procedures which enable corruption, limited property rights and law enforcement, as well as currency, language, and cul-tural barriers.

The magnitude of opportunities around agriculture and agribusiness in West Africa is sizeable and unlocking them would ensure economic growth, while improving smallholder farmers’ livelihoods, and fostering social inclusiveness.

A few initiatives are being spearheaded by regional organizations, development partners, the private sec-tor and civil society to unlock the potential of the West African agribusiness sector and foster cooperation across borders.

 

Cross-Border Trade between Nigeria and Benin

Sahel Capital is engaged in an agribusiness trade focused programme: Approche Communale des Mar-chés Agricoles (ACMA) to foster trade collabora-tions between the Republic of Benin and Nigeria.

ACMA, funded by the Netherlands government, is focused on improving farmer livelihoods, and contrib-uting to food security. The four-year project is led by IFDC and supported by a consortium of four organiza-tions, including Sahel Capital, CARE International, Royal Tropical Institute (KIT), and Benin Consulting Group (BeCG). The implementation team will work towards creating linkages between smallholder farmers in the Republic of Benin, and agro processing companies in Nigeria (Lagos, Ogun, and Oyo States) around four major value chains – maize, cassava, palm oil, and chili pepper.

As part of its role in the consortium, Sahel Capital will provide market intelligence and trade facilitation by creating linkages between smallholder farmers’ clus-ters and agro-processing companies, collaborating with customs, trade facilitation organizations, and regional banks. The team is also committed to formalizing trade and reducing smuggling through borders, and also reducing currency barriers.

May 1, 2014

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