Innovative approaches to agribusiness development in sub-Saharan Africa. Volume 1. Summary, conclusions and cross-cutting findings

The project, which included country studies in the East, West, and Southern Africa regions (see the abstracts of PN-ACB-883/884/885) and related literature searches (see the abstract of PN-ACB-882), focused on four high-opportunity areas -- non-traditional agricultural exports (NTAE), agribusiness associations, small and medium enterprises (SMEs), and financial services -- complemented by monitoring and evaluation. This volume summarizes the results of the project. Individual sections introduce the study methodology; identify the countries, projects, and entities reviewed; present findings, conclusions, and lessons learned for the SSA region as a whole; and, more briefly, summarize the findings of the other studies. High-impact areas warranting further research are detailed in conclusion. Overall findings in the four focus areas are as follows. (1) There is a strong need for agribusiness SME development in SSA, especially to support indigenous entrepreneurs. While many donor programs in SSA support commercial SMEs, none offer the full range of services required by a fledgling SME, none focus on agribusiness, and none operate outside the capital cities. Key firm-level constraints facing SMEs include weak management skills, especially in marketing and cost control, and lack of equity/collateral, especially in rural areas. (2) The major constraints to agribusiness lending by financial institutions are the shortage of commercially viable projects and poor loan and investment packaging by the borrower, not a shortage of available funds. (3) Agribusiness association development has the potential for considerable positive impact, especially as a means of helping indigenous small producers and SMEs help themselves and as a leveraged way to support the development of high-opportunity subsectors. Key constraints, include, inter alia, the legacy of government control of cooperatives, the bias toward production of producer-based associations, the low-level of financial and other training and the part-time status of most association management, and members" lack of financial viability. (4) There is significant potential for NTAE development in SSA. Major needs, besides capital, are to upgrade infrastructure (especially roads, airports, and communications) and improve enterprise organization and planning. Includes recommendations for USAID.