Innovative approaches to agribusiness development in sub-Saharan Africa. Volume 4. West Africa

The study concentrates mainly on agribusiness associations and financial services to agribusinesses, secondarily on nontraditional agricultural exports (NTAEs) and small/medium enterprises (SMEs); attention is also given to issues in project monitoring and evaluation (M&E). General findings and recommendations are as follows. (1) In West Africa, export financing systems for NTAE are not well developed and/or are not managed efficiently; a modest export credit fund would enhance the effectiveness of most NTAE promotion projects. (2) Of the countries studied, Ghana has the most developed trade associations, though even these are weak. Further, agribusiness is under represented in most current business associations. It is recommended that donors strengthen umbrella organizations to enable member associations with limited clout and budgets to achieve some lobbying power and voice. (3) Typically, SMEs lack the capital or financing to expand and/or diversify. Commercial banks, agricultural development banks, and NGO/PVO credit projects do not target agribusiness SMEs. USAID could most effectively assist SMEs through an Agribusiness Service Center, which would provide an integrated package of services and access to outside service providers. (4) Financial institutions in all three study countries are wary of extending credit for export financing and/or have weak credit systems. A model project combining management, TA, training, and dedicated credit facilities would likely achieve a demonstration effect by generating credible results. A business-like orientation emphasizing strict credit management and responsibility for repayment would be necessary. (5) USAID has not actively supported association development in West Africa, except in Ghana, and even there to only a limited degree. At a minimum, those supporting associations should insist upon M&E of: sources of finance by type, uses of funds by activity and actual versus expected return or benefits, and membership satisfaction with association management and services. Appendices contain detailed project assessments and association profiles.