Driving SME Growth and Competitiveness Through Agribusiness Can Make the Sector an Engine for Economic Growth in Africa

The SME sector is increasingly being recognized as the engine for economic growth in Africa and is also viewed as the future of work. Unfortunately, the COVID-19 pandemic has severely impacted the sector which has inspired the government to put in place stimulus measures to support businesses in Kenya. However, there is a need for stakeholders’ engagement through structured discussions on how effective these policy measures can support and sustain Agribusinesses and SMEs during and after the pandemic.

During the 9th SME Conference and Expo hosted by Strathmore University Business School (SBS)  on the 7th and 8th of October, 2021 and attended by key policymakers from the Ministry of Agriculture, Livestock, Fisheries and Cooperatives, Continental Free Trade Area (AfCFTA), development partners, the private sector, youth, women organizations, civil society organizations, researchers and academia, it was observed that agricultural sectors across the African continent require skilled and youthful workforces across the entire value chain to modernize food production systems and ensure the sectors are commercially viable.

In his opening remarks, Dr. George Njenga, Executive Dean, SBS said, “Driving SME growth and competitiveness through Agribusiness is the foundation of the growth and expansion of the African economy in a significant way.’’ He also noted that the expertise and knowledge of the Kenyan people in this sector can transform Africa.

Speaking regarding the achievements and emerging policy issues in the SME agribusiness sector during the conference, Prof. Hamadi Iddi Boga, Principal Secretary for the Ministry of Agriculture, Livestock, Fisheries and Cooperatives noted that following the COVID-19 pandemic the agribusiness sector in Kenya is currently being impacted by drought, high fuel prices and rising fertilizer prices. According to Prof. Boga, “the government is keen to facilitate active engagement and investment by the private sector in agribusiness in Kenya and at the regional and continental level through the Africa Agriculture Development program and enhance the Malabo Declaration which aims to boost trade in agricultural goods and produce.”

He mentioned that smallholder farmers form the bulk of farmers globally and continental initiatives like the Africa Free Trade Area (AfCFTA) can create opportunities for SMEs not only in Kenya but across Africa. He added that “the government has concluded the development of the agriculture policy, in consultation with all stakeholders, and we also concluded the development of the agriculture sector transformation and growth strategy, our vision 2030, all these documents are designed to promote a commercially oriented, market-driven agricultural sector.”

The Vision 2030 strategy incorporates an inclusion anchor: which focuses on smallholder farmers and other SMEs that support the agribusiness value chain by helping them to commercialize their products and organize them into smallholder farming groups or cooperatives to achieve scale through agro-hubs. It can also bring about rural transformation in areas by placing agro-processing facilities nearer to smallholder farms as well as promoting large scale farms that support smaller farms by sharing knowledge, agro-processing opportunities, and market access. Such agro-hubs can empower the youth in agribusiness programs and build their capabilities to manage crises such as COVID-19, locusts and climate change to improve the resilience of the sector.

Elaborating on the importance of SMEs participation in the African Continental Free Trade Area (AfCFTA), Paulo Gomes, Co-Chair of the AfroChampions Initiative and Founder of Orango Investment Corporation said that African nations are under pressure to create jobs for their youth. It is estimated that 20 million jobs need to be created every year in Africa to absorb all the youth that are entering the market.

He noted that Africa has not managed to create an economy that can sustain shocks from crises such as the global pandemic, however, by putting the building blocks in place to achieve resilience and economic growth the continent can move in a positive direction. Considering that the AfCFTA has now established a Secretariat in Ghana and are putting policies in place, the initiative is geared to play an important role in pan-African security and creating enough jobs for the youth.

Mr. Gomes said that even though the implementation of the AfCFTA will be gradual in terms of the countries adopting the policies as well as the sectors within those countries, the first sector to focus on is the agribusiness sector. He noted that African countries must be more proactive to partner with the private sector to inject resources into SMEs as well as accelerators and incubators through public-private partnerships. He commended Kenya’s agri-sharing economy where farmers share access to equipment and remarked that Kenya’s leadership in technology and its entrepreneurial mindset can play an important role in Africa.

The hybrid virtual conference which also hosted the first-ever virtual SME EXPO was attended by over 1000 participants. The event allowed the voices of SMEs to be at the center of discussions on the future of the agribusiness sector. The conference was focused on the following major themes in the agribusiness ecosystem: digital innovations and technology; policy support; access to finance and markets; and skills development. The conference also highlighted the importance of these drivers to agribusiness-centered entrepreneurship and competitiveness.

In conclusion, building a resilient, adaptive and powerful agricultural sector starts with empowering SMEs that are the engine of the Kenyan economy. The knowledge-sharing collaboration sessions in this conference between stakeholders spanning the triple helix of government, private sector and academia will help build an ecosystem where resourceful agribusiness entrepreneurs can take advantage of local, national, regional and international opportunities thus creating a dynamic, competitive and vibrant agribusiness sector in Kenya and across Africa.

By Shailja Sharma, Executive Fellow and Coach

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