Agriculture’s share of gross domestic product (GDP) has been declining over the years in many African countries as service sectors have grown. However, agriculture continues to underpin many countries’ economies. The contribution of the agricultural sector ranges from 24% of GDP in Tanzania to about 30% in Burkina Faso. It also accounts for a significant proportion of exports; about 65% of Kenya’s and 48.5% of Uganda’s.
Agriculture also continues to employ disproportionately more people than other sectors. For example, in Burkina Faso, it accounts for 94% of employment, a testimony to the low productivity of agriculture there. Though agricultural productivity has been growing (in Tanzania, it has grown by 20% in the past decade), it remains low, and many people employed in agriculture remain poor.
All the same, the potential for agriculture is huge, especially as a way to drive economic transformation. In Kenya, where agroprocessing is relatively well developed, agriculture contributes a further 27% through manufacturing, distribution, and agricultural services, and provides more than 18% of formal employment. ACET’s African Transformation Report (ATR, 2014) points to agroprocessing as a key pathway by which countries may transform their economies.
At the same time, in order for agroprocessing to drive economic transformation, agricultural value chains will need to be upgraded to ensure a consistent supply of quality raw materials at low prices, which is a prerequisite for developing a vibrant processing sector.