By Koffi Zougbédé, Sahel and West Africa Club Secretariat (SWAC)
In 2011, Fatoumata Cissoko, a graduate in accounting and a young woman living in Guinea, launched her dried-fruit processing company with USD 260. Her company produces about 16 tonnes of dried pineapple a year sold in many shops and supermarkets in the capital, Conakry, and other cities around the country. Recently, her company increased its production capacity substantially to improve its competitiveness in regional and international markets. Fatoumata also opened an organic restaurant to complete the production chain and she directly employs 15 women. The story of Fatoumata is one example of the many emerging job opportunities in West Africa’s food systems.
Off-farm activities — a wealth of diverse job opportunities
The regional food economy, the biggest employer in West Africa, is projected to reach USD 480 billion in 2030 with the non-agricultural sector expected to represent 49% of the value added. As a result, demand for labour in off-farm activities mainly in urban areas — processing, marketing and other services such as food-away-from-home — is growing. These activities have the potential to generate decent and permanent jobs especially for youth and women. About 68% of all employed women work in the food economy and like Fatoumata, most of them operate in off-farm segments.
The majority of these activities are informal as food supply chains are mostly in the “traditional or transitional” stage. This means they do not guarantee a safety net for workers. The COVID-19 crisis has shown that, more than ever, social protection for workers is vital. However, if there are not enough decent and formal jobs, it will be difficult to put in place sustainable social protection systems. Therefore, supporting the transition to modern food supply chains that can create more stable employment should be a priority for policy makers.
Closing the financing gap
To install a local solar fruit-drying unit, Fatoumata received support from the Italian Food Safety Programme (PISA) and obtained an electric kiln from the West Africa Agricultural Productivity Programme (WAAPP) to increase her production capacity. But while Fatoumata’s initial investment of USD 260 helped start her business, it was not enough to acquire the equipment she needed to grow it. 40% of small and medium-sized enterprises (SMEs) in Africa identified access to finance as the primary factor constraining their growth. In Nigeria alone, working capital needs for agribusiness are estimated at between USD 4.6 and USD 6.5 billion per year. Several constraints curb agricultural financing. For banks, the primary reason is the lack of specialist knowledge on agriculture and agribusiness. Many do not have the skills to analyse an agribusiness plan or assess agricultural-related risks and many agribusinesses lack the adequate collateral and records required for getting a loan. Public initiatives, such as the Rapid Entrepreneurship Delegation fund (DER) in Senegal, that offer financing to entrepreneurs at different stages of their activity, can help to reverse the curve. The private sector, through blended finance, can contribute to the rapid transformation of off-farm activities with initiatives, such as the NIRSAL in Nigeria, to make funding available for SMEs that employ or are managed by women and youth.
Developing skills and standards
With a background in accounting, Fatoumata clearly has an education level that gives her the skills to manage a business. However, when it comes to operations — processing fruit, packaging and storage — are her employees sufficiently trained to do the job? In order to take advantage of the diverse job opportunities that are emerging in the off-farm sector and to support the transition to modern food supply chains, women and youth need to acquire the skills to make them more productive. Skills that are both soft (leadership, self-discipline, critical thinking, responsibility) and technical (business and financial management, technology, quality control, agronomy, nutrition). Many of these skills can be acquired through better access to basic education, technical and vocational education and training (TVET) and on-the-job training. Another challenge is certification. The growing off-farm sector needs to provide quality goods and services in order to be competitive locally and internationally and to reassure consumers that they have access to healthy food. Evidence from 41 African countries shows that manufacturing firms with an International Organisation for Standardisation (ISO) certificate achieve 77% higher sales per employee, and certified services firms have 55% higher sales per employee. Like incubators that help start-ups to develop through coaching and training, policy makers should put in place financial support and advisory services to accompany the certification process of firms in the off-farm sector.
Adopting an “ecosystem” approach
Since the launch of her business, Fatoumata has bought more than 320 tonnes of fresh pineapple from farmers, creating a local economy by working with a variety of producers and women’s co-operatives. Adopting an “ecosystem” approach can improve the sustainability of the activities of the actors involved in production supply chains and guarantee job stability for women and youth. Connecting the supply and demand of agricultural products for better-integrated value chains is key. In practice, this means that farmers have secured markets for all or part of their crop production at the beginning of production cycles, and that processors and traders have provided all or part of their supplies. This approach has the advantage of avoiding significant crop losses for farmers and ensuring stable incomes over time. For processors, it is an opportunity to ensure the quality of crops by supporting farmers in their production processes, especially for exporters who target foreign markets.
Addressing the challenges of financing, skills development and co-ordination can significantly contribute to the dynamism of off-farm activities and the creation of more decent jobs for women and youth, ensuring the emergence of more success stories like Fatoumata’s. Spatial factors also matter. Governments should create an enabling environment by providing basic infrastructure, creating the right market incentives, promoting inclusive agribusiness models, and supporting information and communications technologies that foster inclusive value chains.