Challenges facing Agribusiness in Africa

Agribusiness has great potential and can be the solution to the unemployment crisis facing most of the countries in Africa. Countries with the lowest unemployment rates, such as Botswana at 18%, have used agribusiness to boost employment. Zambia is a landlocked country with a population of 13 million but has used donor support to train the skilled and unskilled youth in agribusiness. Today its unemployment rate is at 14%. Rwanda has one of the lowest rates of unemployment in Africa, standing at 3.4%. 70% of the youth in this small nation are involved in agribusiness. However, there are several challenges facing individuals or communities interested in agribusiness in Africa.

Access to favorable financing

Many agribusiness entrepreneurs rely on rainfall. Their success is pegged on how great the climate is. Unfortunately, the changing weather patterns have not only affected yield, but it has also had an impact on access to financing. Financial institutions give entrepreneurs in agribusiness the same terms as any entrepreneur irrespective of nature of business. It usually takes a couple of months before agribusiness entrepreneurs, especially those who invest in crops, to reap from their investment. Unfortunately, because of risks such as poor climate and diseases, many fail to meet their financial obligations. Due to the risky nature of agribusiness, as it is stands right now, many financial institutions are hesitant to give loans for agribusiness. Those that do, give stringent measures which end up taking more out of the entrepreneurs.

Poor access to markets due to inadequate infrastructure

Many countries in Africa still have areas which remain inaccessible. Inadequate infrastructural development has not only made it difficult for farmers to find easy access to markets, but it has also increased the cost of agribusiness. The poor roads only make it costlier to transport produce. The one who bears most of the burden is either the consumer or farmer. Farmers often prefer earning a little, instead of losing their produce, especially the perishable ones.

Absence of innovation

Many businesses keep changing their strategies with the changing market demand. Unfortunately, agribusiness has been done the same way for so many years, with little or no improvement. Maize farming in Kenya is a great example of agribusiness that has been done the same way for years. Unfortunately, the market conditions have changed. The borders have become more porous and consumers have become more rational when it comes to prices of goods and services.

Government policies

Unfortunately, Africa continues to import food yet it has the capacity to feed its population. This would only be possible if government programs were designed to support agribusiness. Unfortunately, entrepreneurs have been left unsupported and continue struggling to meet the available market under very difficult conditions, including high seed and input prices. With the right policies and support system, more people would be encouraged to join agribusiness.

Africa has great potential due to the great climatic conditions. The ever-increasing population is a sign that food will always be in demand. Unfortunately, many countries are facing a shortage in supply. At the same time, there are entrepreneurs who have had to contend with food going bad due to, supposedly, absence of market for their produce. These are some of the inconsistencies that need to be checked and improvements seen if agribusiness is to be seen as a lucrative venture by the citizens, especially the unemployed youth.