1. Agro-Allied Industrialization and Regional Value Chains
Ousmane Badiane, Director for Africa

2. ECONOMIC GROWTH AND DEMAND OUTLOOK
Most Countries Will Reach Middle Income Status In 2030
All Countries Will Reach Middle Income Status By 2050
Source: Sulser T. B. et al

3. ECONOMIC GROWTH AND DEMAND OUTLOOK
Intraregional Trade By 2025
Under Current Trends
Source: Badiane et al. 2014

4. ECONOMIC GROWTH AND DEMAND OUTLOOK
Regional Trade In Staples: Major Source of Future Income Growth
Increase in Demand and Incomes in Billion US$
+ $100B = Growth of staple food demand in urban markets in Africa
+ $30B = Potential income for smallholder farmers
IFPRI/Badiane

5. THE RISE OF PROCESSED FOODS
ECONOMIC GROWTH AND DEMAND OUTLOOK
THE RISE OF PROCESSED FOODS
Projected Demand Growth 2010 – 2014
(Estimated Purchased Food Budget Share in 2040)
UNPROCESSED
PROCESSED
LOW VALUE
ADDED
HIGH VALUE
Non-
Perishable 4x
(8%)
5.5x
(17%) 7x
(23%)
6.5x
(20%) 8X
(18%)
10X
(15%)
Source: Tschirley, D et al

6. RAPDIDLY TRANSFORMING REGIONAL VALUE CHAINS
1. TRADITIONAL MILLET VALUE IN SENEGAL

7. RAPDIDLY TRANSFORMING REGIONAL VALUE CHAINS
2. MILLET BASED MEALS

8. RAPDIDLY TRANSFORMING REGIONAL VALUE CHAINS
3. THE NEW MILLET VALUE CHAIN
HOME
BASED
MILLET
PROCESSING
READY TO COOK
MILLET PRODCUTS
ON THE SHELF

9. RAPDIDLY TRANSFORMING REGIONAL VALUE CHAINS
3. THE NEW MILLET VALUE CHAIN
HOME
BASED
MILLET
PROCESSING
READY TO COOK
MILLET PRODCUTS
ON THE SHELF
TRADITIONAL MILLET
BASED MEALS

10. RAPDIDLY TRANSFORMING REGIONAL VALUE CHAINS
3. THE NEW MILLET VALUE CHAIN
HOME
BASED
MILLET
PROCESSING
READY TO COOK
MILLET PRODCUTS
ON THE SHELF
TRADITIONAL MILLET
BASED MEALS
READY TO EAT
MILLET
MEALS ON THE SHELF

11. EMERGING AGRO-ALLIED INDUSTRIAL SECTOR
Profitability, Growth And Maturation
Current characteristics of regional agro-allied industries
Rising number of firms producing the same low quality, often imitated goods #
Time
Source: Badiane, O. and M. McMillan. 2016; Based on Otsuka and Sonobe (2011)

12. EMERGING AGRO-ALLIED INDUSTRIAL SECTOR
Profitability, Growth And Maturation
Current characteristics of regional agro-allied industries
Rising number of firms producing the same low quality, often imitated goods
As new entrants copy same products, profitability declines for everyone
No capacity to invest and innovate; stifling firm growth and maturation $ #
Time
Source: Badiane, O. and M. McMillan. 2016; Based on Otsuka and Sonobe (2011)

13. AGRO-ALLIED INDUSTRIALIZATION STRATEGIES
Two Key Questions
How to bend the profitability curve and escape from low and declining profits?
How to promote enterprise growth through consolidation and specialization? $ #
Time
Source: Badiane, O. and M. McMillan. 2016; Based on Otsuka and Sonobe (2011)

14. AGRO-ALLIED INDUSTRIALIZATION STRATEGIES
Three Priority Areas for Policy and Investment
Process and product innovation: Vocational training & Technology acquisition
Market development: Trade & competition policy, quality & standards
Cost of services and Infrastructure access: Power, Telecom, Transport $ #
Time
Source: Badiane, O. and M. McMillan. 2016; Based on Otsuka and Sonobe (2011)

15. AGRO-ALLIED INDUSTRIALIZATION STRATEGIES
Three Priority Areas for Policy and Investment
Process and product innovation: Vocational training & Technology acquisition
Market development: Trade & competition policy, quality & standards
Cost of services and Infrastructure access: Power, Telecom, Transport $ #
Time
Source: Badiane, O. and M. McMillan. 2016; Based on Otsuka and Sonobe (2011)

16. A. SKILLS DEVELOPMENT FOR TRANSFORMING VALUE CHAINS
Absence of professional & vocational training opportunities means:
No skill upgrading for existing smallholder farmers
No skill development for emerging value chain professions
Machine operations and maintenance
Processing technology skills
Product and process innovations
Management and sales
Packaging and distribution
Food quality and safety
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17. AGRO-ALLIED INDUSTRIALIZATION STRATEGIES
Three Priority Areas for Policy and Investment
Process and product innovation: Vocational training & Technology acquisition
Market development: Trade & competition policy, quality & standards
Cost of services and Infrastructure access: Power, Telecom, Transport $ #
Time
Source: Badiane, O. and M. McMillan. 2016; Based on Otsuka and Sonobe (2011)

18. B. TRADE & COMPETITION POLICIES FOR TRANSFORMING VALUE CHAINS
Three policy options for competitive domestic value
chains in regional markets
Notes: Notes: * COMESA+Tanzania. Figures on top of bars indicate cumulative increases in regional export supply in 1000 mt.
Source: Badiane et al. 2014

19. AGRO-ALLIED INDUSTRIALIZATION STRATEGIES
Three Priority Areas for Policy and Investment
Process and product innovation: Vocational training & Technology acquisition
Market development: Trade & competition policy, quality & standards
Cost of services and Infrastructure access: Power, Telecom, Transport $ #
Time
Source: Badiane, O. and M. McMillan. 2016; Based on Otsuka and Sonobe (2011)

20. C. INFRASTRUCDTURE CHALLENGES AND OPPORTUNITIES
Harness ICT for Quick Gains
Africa’s infrastructure gap is lowest in the Telecom Sector
While investing in power and transport infrastructure
Tap into Modern ICT to leapfrog
Torero, M. (2014)

21. USING ICT TO INNOVATE, CUT COST AND GO TO SCALE
How ICT can be leveraged for smallholder agriculture
Lower cost of overcoming physical and institutional obstacles
Bridge the distance to millions of dispersed smallholders
Extend the reach of limited technical staff
Lower cost of access to technology and services
Tap into global knowledge networks
Enable self-learning and peer-to-peer learning
Link smallholders to other value chain operators
Traders, exporters, processors
Financial services providers
Technology services providers
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22. THE CHALLENGE: TAKING ICT SOLUTIONS TO SCALE
Current ICT tools target….
…. an isolated business problem
for a separate segment
of a given value chain
often in specific geographies
They provide solutions that are not replicable nor scalable.
Needed are integrated solutions that digitize all major interfaces between smallholders and other value chain actors.

23. References
Badiane, O. and T. Makombe Beyond a Middle Income Africa: Transforming African Economies for Sustained Growth with Rising Employment and Incomes. ReSAKSS Annual Trends and Outlook Report.
Badiane, O. and M. McMillan Economic Transformation in Africa: Patterns, Drivers and Implications for Future Growth Strategies. In Badiane, O. and T. Makombe (Eds.). Beyond a Middle Income Africa: Transforming African Economies for Sustained Growth with Rising Employment and Incomes. ReSAKSS Annual Trends and Outlook Report.
Badiane, O., S. Odjo and S. Jemaneh More resilient Domestic Food Markets through Regional Trade. In Badiane, O., T. Makombe, and G. Bahiigwa (Eds.): Promoting Agricultural Trade to Enhancing Resilience in Africa. Annual Trends and Outlook Report. Regional Strategic Analysis and Knowledge Support Systems. Washington DC. PP:
Badiane, O., T. Makombe, and G. Bahiigwa Promoting Agricultural Trade to Enhancing Resilience in Africa. Annual Trends and Outlook Report. Regional Strategic Analysis and Knowledge Support Systems. Washington DC.
Otsuka, K. and T. Sonobe A Cluster-based Industrial Development Policy for Low-income Countries. Policy Research Working Paper No World Bank. Washington DC.
Sulser, T. B.; D. Mason-D’Croz; S. Islam; S. Robinson; K. Wiebe and M. Rosegrant Africa in the Global Agricultural Economy in 2030 and In Badiane, O. and T. Makombe (Eds.). Beyond a Middle Income Africa: Transforming African Economies for Sustained Growth with Rising Employment and Incomes. ReSAKSS Annual Trends and Outlook Report.
Torero, M Infrastructure Challenges and Opportunities for Africa South of the Sahara. In Badiane, O. and T. Makombe (Eds.). Beyond a Middle Income Africa: Transforming African Economies for Sustained Growth with Rising Employment and Incomes. ReSAKSS Annual Trends and Outlook Report.
Tschirley, D; T. Reardon; M. Dolislager and J. Snyder Presentation at CAADP Annual Trends Outlook Report Methodology Workshop: Towards a Middle Income Africa: Long Term Growth Outlook and Strategies. IFPRI Washington DC. December 12.

24. Thank you!