The agricultural industry is the cornerstone of the African economy. This sector employs more than 230 million Africans on the continent and represents 35 % of GDP. Agricultural production and trade significantly contribute to national economies, but a large part of Africa’s agricultural industry remains unindustrialized, fragmented, and underdeveloped.
Importance of agro-industrial parks
Agro-industrial parks are considered by many experts in the agri-food sector as key drivers of agricultural industrialization. These infrastructures improve productivity in a way that benefits all production chains. Also known as agro-industrial or agricultural transformation zones, agro-industrial parks serve as production hubs, fostering economic development and innovation, while generating more secure and reliable income for small farmers.
Industrialization is a key indicator of economic and social development. Furthermore, agricultural industrialization is significant for developing regions, particularly when these areas seek to :
- Transform their economies
- Address food security issues
- Build more sustainable and resilient food systems
Operation of agro-industrial parks
Agro-industrial parks are specialized industrial zones dedicated to the production and processing of agricultural products.Often located in rural or peri-urban areas, these zones are generally controlled by a public-private entity. Agro-industrial parks consist of producers, processors, and manufacturers, as well as auxiliary businesses such as financial services and ICT that support the park’s smooth operation.
Agro-industrial parks act as a physical network for producers and processors, pooling resources for the benefit of all participants. By working closely together, businesses can share essential services such as management, transport, storage, and packaging. These structures can benefit from each other, reduce costs, and establish a self-sufficient path to market.
In many cases, the businesses located in agro-industrial parks are SMEs, for which collective action enables greater productivity and growth opportunities. This is particularly true in Africa, where nearly 80 % of food is produced by small farmers who lack the finances and resources needed to improve their production capabilities.
Development of agro-industrial parks in Africa
The popularity of agro-industrial parks has rapidly increased in recent years, especially in low- and middle-income countries where agricultural industrialization is still in its infancy. The governments of these regions agree that agro-industrial parks can increase the added value of agricultural activities.
Research conducted by the International Food Policy Research Institute (IFPRI) presents several successful examples of agricultural industrialization in Africa. Notably integrated parks in Ethiopia, Morocco, Ghana, Senegal, and Kenya, covering sectors such as horticulture, fishing, forestry, maize, coffee, and livestock. With dozens of parks planned or under construction across Africa, their influence is expected to grow in the coming years.
The development of agro-industrial parks in Africa relies on effective policies and mixed public-private institutional support. Most parks are managed by public-private partnerships (PPPs), allowing governments and private sector actors to work together and share the associated risks and benefits. Many agro-industrial parks also receive funding from development finance institutions (DFIs) and multilateral development banks (MDBs).
The Alliance for Special Agro-Industrial Processing Zones, recently created, represents one of the largest initiatives in the sector. It brings together the African Development Bank, Afreximbank, the Islamic Development Bank Group, and UNIDO. This group aims to invest 3 billion USD to transform rural African areas into agro-industrial zones.
Towards self-sufficiency with the support of agro-industrial parks
The establishment of self-sufficient, sustainable, and resilient food systems is a long-term priority in Africa. While agro-industrial parks do not constitute a complete solution to these challenges, they can significantly contribute.
Agro-industrial parks can play a crucial role in empowering small farmers by facilitating their integration into larger markets. These parks provide access to cutting-edge tools and support from large companies, greatly increasing the efficiency and productivity of small farmers. Additionally, access to R&D within agro-industrial parks allows small farmers to innovate and improve, leading to an increase in their overall production.
By bringing small farmers together, agro-industrial parks also promote collective bargaining and strengthen these farmers’ negotiating power with suppliers, buyers, and financial institutions. This collective approach improves their ability to obtain better prices, access financing, and negotiate favorable terms, thus enhancing their economic sustainability and market presence.
