Agriculture in Africa has a massive social and economic footprint. More than 60 percent of the population of sub-Saharan Africa is smallholder farmers, and about 23 percent of sub-Saharan Africa’s GDP comes from agriculture. Yet, Africa’s full agricultural potential remains untapped. In a recent analysis, we determined that Africa could produce two to three times more cereals and grains (Exhibit 1), which would add 20 percent more cereals and grains to the current worldwide 2.6 billion tons of output. Similar increases could be seen in the production of horticulture crops and livestock.

Building on three years of analysis and on-the-ground experience with agriculture in sub-Saharan Africa (see sidebar, “Methodology”), this article offers insights in two areas. First, we address findings from our analysis on where the opportunity for growth lies in African agriculture, looking closely at growth in different countries, land expansion, cost competitiveness, and farmer productivity. Second, we describe practical recommendations on the supply and demand sides for companies—both local and multinational—looking to grow in this high-potential but challenging market. Governments, investors, and development partners can also follow this guidance to support the private sector.

Where will agricultural growth in Africa come from?

Realizing Africa’s full agricultural potential will require significant investment. Sub-Saharan Africa will need eight times more fertilizer, six times more improved seed, at least $8 billion of investment in basic storage (not including cold-chain investments for horticulture or animal products), and as much as $65 billion in irrigation to fulfill its agricultural promise. 1 Much investment will also be needed in basic infrastructure, such as roads, ports, and electricity, plus improvements in policies and regional trade flows (Exhibit 2). For the purposes of this article, we define sub-Saharan Africa as including all African countries except Algeria, Egypt, Libya, Morocco, and Tunisia. Unless otherwise specified, South Africa is not included in sub-Saharan Africa.

When we talked to companies considering investing in African agriculture, we encountered questions about what would spur growth in the sector, particularly regarding which countries to pursue, the role of land expansion, the potential for larger-scale farming, and overall cost competitiveness. We found that addressing these topics helped companies focus on the solutions that are mostly likely to propel growth in agriculture in Africa. We discuss these topics below.
A few countries will account for a significant portion of the potential

Analyzing productivity potential across 44 countries in sub-Saharan Africa showed that nine countries make up 60 percent of the total potential, with three countries—Ethiopia, Nigeria, and Tanzania—comprising half of that. While this potential is highly concentrated, the significant variation in agricultural development and policy on the continent means differentiated approaches are required for each market. The three highest-potential countries illustrate this variation well with respect to government involvement in agriculture, enabling environment, and factors such as improved input adoption (Exhibit 3).