Employment potential in agricultural value chains
Agriculture-based economies are facing the challenge of creating large numbers of jobs for their rapidly growing young population. Adequately high incomes and wages are also required to increase the purchasing power of employees, stimulating demand for goods and services outside agriculture and creating new employment opportunities. The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH sectoral project ‘Agricultural Trade, Agribusiness, Agricultural Finance’ together with other sectoral projects commissioned two studies with the Sahel and West Africa Club Secretariat at the OECD and Michigan State University in 2018-2019 on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).
The results are summarised in the Policy Brief ‘Employment potential for young adults in sub-Saharan Africa: potential of agricultural value chains.
Population growth, economic growth and urbanisation are leading to rising demand for more diverse and higher quality foods. Not just direct employment opportunities are relevant, but also jobs in upstream and downstream production steps and service processes in the wider food system (for example food handling, processing, packaging, marketing).
Increased number of processing establishments in rural areas
According to the studies, around 66 per cent of all workers in West Africa are active in the general area of food production. While many of these work in agriculture, the share of non-agricultural employment is growing, and already accounts for 31 per cent of total non-agricultural employment. Although processing businesses so far employ only a small share of these, their importance will grow rapidly, as they are located in rural and peri-urban areas and accordingly create local jobs and income. It is striking that these plants are predominantly set up by (informal) SMEs, a ‘hidden middle’ which will continue to play a key role.
Even if agricultural value chains from farm to fork cannot offer sufficient income sources for the entire rural population, the growing agro-food markets nevertheless offer relatively diverse employment possibilities, particularly for young adults and women. Especially the food logistics sector has low entry barriers and high demand due to urbanisation rates. These opportunities can be strengthened by targeted public and private investment, for example in broad-based productivity growth in agriculture or in information and communications technologies.
Dr. Heike Höffler, Deutsche Gesellschaft für internationale Zusammenarbeit (GIZ) GmbH, Bonn/Eschborn, Germany
GIZ Policy Brief
OECD Papers on West Africa
Brief & Graphs at OECD website
Michigan State University Paper: Africa's evolving employment trends: Implications for economic transformation