Africa's economy is based primarily on agriculture.
It provides the primary means of subsistence for 70% of the people and contributes around 25% of the continent's gross domestic product (GDP). Africa has some of the lowest agricultural output and harvests, nevertheless.
Agriculture in Africa produces less than half of what Asia does.
Although agricultural output has expanded by a factor of two over the past three decades, the growth has mostly been on the extensive margin due to an increase in the total area under cultivation rather than factor productivity.
More than 85% of land holdings have farms with less than two hectares of land, and the great majority of agricultural operations are below the subsistence level.
These primarily self-sufficient smallholder farmers employ primitive farming techniques and insufficient quantities of contemporary inputs.
The absence of physical infrastructure like roads, telecommunications, and electricity, the absence of markets for credit and insurance, the absence of property rights and a system of land tenure, and the prevalence of corruption all contribute to widespread market failures in addition to small farm holdings and inadequate use of modern technologies.
These are a few of the underlying issues that limit effective resource allocation in the agriculture industry as well as other rural sectors.
Sadly, despite the continent's abundance of natural resources and large amounts of territory, it continues to be a net importer of food, paying roughly US$35 billion annually.
Agro-industry
According to general agreement, Africa's manufacturing continues to rank among the lowest in terms of value added and employment; its agriculture is underperforming; and its services sector is set up to primarily cater to home customers.
Without a doubt, for Africa to maintain development, its economic system needs to change.
The agricultural business has a bright future.
It has the ability to combine the finest aspects of the industrial, service, and agriculture sectors when the appropriate laws and enabling environment are in place.
Due to its backward and forward connections, it boosts the continent's GDP, moves it up the global value chain, increases incomes and employment opportunities, strengthens food security, improves nutrition to encourage a healthier and more productive workforce, and ultimately reduces poverty.
Agro-industry is typically characterized as actions performed after agricultural products have been harvested in order to convert, preserve, and prepare them for secondary or tertiary use.
It consists of the processing of intermediate commodities, the creation of finished agricultural products, and artisanal, minimally processed, and packaged agricultural raw materials.
A broader meaning of the term "agro-industry" includes not only businesses connected to agriculture but also trade and distribution operations.
Food processing and beverages are the two most significant subsectors of the agro-industry sector, making up more than 50% of the entire formal agro-processing sector in low- and middle-income nations.
The agro-industry might play a significant role in the development of the global food system, which includes the production of products and commodities, marketing, and retailing.
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