According to the Food and Agriculture Organization of the United Nations, agriculture employs 60% of the workforce in West Africa and accounts for 35% of the region’s gross domestic product (GDP). This reveals how important agriculture is to the subregion.
Meanwhile, agriculture’s contribution to the economy of West Africa could be greater than it is currently generating if only the subregion would also invest in adding value to its agricultural products and exporting them to other continents.
Agricultural exports have been transformed in recent decades, moving away from bulk crops to focus more on processed food products and horticultural products. This change in the structure of world agricultural markets has created many new opportunities for exporters, jobs for workers, and export earnings for countries.
Agricultural products like cocoa, honey, shea nuts, oil palm, cotton, and some other vegetables and cereals are already generating income for West African countries like Ghana, Nigeria, Cote dIvoire, and others. However, these can perform when more value is added to them through processing.
A study shows that the cost of inputs needed to produce processed foods can be a substantial problem for farmers in the West African region and firms wanting to enter more lucrative export markets. For example, high tariffs on intermediate inputs could reduce the returns to be gained from engaging in a processing activity, thus reducing firms’ incentives to invest in that activity. Policymakers could address this issue through tariff reforms or through the provision of duty exemptions for inputs used in the production of exportable goods.
Poor infrastructure, including poor roads, can increase transportation costs and transit times, particularly for perishable goods. Investing in infrastructure can reduce costs and encourage higher-value exports.
Domestic policies and trade partner policies significantly impact export growth. Tariff escalation among trading partners hinders Africa’s processed agricultural exports. Lowering tariffs on processed products could increase exports by 115%, but this can’t be solely driven by policymakers.
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