AGRIPRENEURS AND AGRIBUSINESS MODELS Unlocking the Promise of YOUTH EMPLOYMENT in Agriculture in Sub-Saharan Africa — Case Studies from Uganda UMAR I. KAMARAH
DISCLAIMER The views expressed in this publication are those of the author and do not necessarily reflect the views of the Islamic Development Bank (IsDB), or its Board of Governors and General Assemblies or Governments they represent. The IsDB Group does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. Original title: Food Security in Africa, Post-Covid Strategy Published in 2022 by Human Development Forum www.humandevelopmentforum.org Human Development Forum
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FOREWORD i ABOUT THE AUTHOR ii ACKNOWLEDGMENTS iii LIST OF FIGURES iv OVERVIEW vii PART 1: Context 1 CHAPTER 1: Overview of youth employment in agriculture in SSA 3 CHAPTER 2: Background information on Uganda 23 CHAPTER 3: Ugandan agro-enterprises with potential for youth employment 31 PART 2: Promoting Youth Employment in Agriculture 51 CHAPTER 4: Unlocking the promise of youth employment in agriculture 53 CHAPTER 5: Private sector engagement unlocking smallholder markets 85 CHAPTER 6: Promoting effective and innovative financing for Agribusiness 91 CHAPTER 7: Promising initiatives of mechanization of the value chain in Uganda 103 PART 3: Lessons Learnt, Conclusions and Recommendations 111 CHAPTER 8: Lessons learnt and key policy issues for scaling up in SSA 113 REFERENCES 117 APPENDICES 123 Contents
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[ i ] Foreword Global Sustainable Development Goal 8 (SDG 8) recognizes the need to create productive employment as a nexus to boost economic growth. SDGs 1 and 2 underpin the ambition to eradicate poverty and achieve zero hunger. The Islamic Development Bank (IsDB) is therefore supporting its Member Countries (MCs), especially in Sub-Saharan Africa (SSA), to achieve these fundamental objectives. It stresses that 60 per cent of the world’s arable land lies within SSA, with the added advantage of presenting a diverse climate that is able to support the cultivation of most crops that grow around the world. Despite its rich agricultural potential and youthful population, SSA remains a net importer of food. Imports from Russia and Ukraine account for nearly 30 per cent of wheat consumed on the continent. This heavy dependence on food imports leaves the ecosystem vulnerable to shock. According to the International Food Policy Research Institute’s Food Security portal, wheat prices have been volatile since the beginning of the Russia conflict in February 2022 and international spot prices have risen to almost US$10 per bushel, the highest since March 2008. It’s also worth noting that Africa has the highest youth labor force compared to other regions, estimated at approximately 70 per cent of its total population, even higher than the global average of about 64 per cent. When properly harnessed, SSA’s youth is one of its greatest assets, with its numbers growing rapidly and expected to double to over 830 million by 2050. If properly managed, this working age population could support both increased productivity and stronger, more inclusive economic growth across the continent. Of the continent’s estimated 420 million youth aged 15–35, one-third is unemployed. Unemployment is a major cause of forced migration for youth, and often leads to various forms of criminality including drug abuse, robbery, gender-based violence and radicalization. And, apart from addressing the unemployment problem, the continent is equally challenged to address a high level of underemployment. Addressing youth unemployment is not a one-dimensional procedure, but requires a comprehensive approach that pays special attention to the quality of basic education, skills development and training to improve young people’s productivity. The approach should also take into consideration available resources and economic opportunities in various sectors of the economy including agricultural commodity value chains. For rural areas, where agriculture is the predominant source of employment, this approach should also focus on rural development, while removing obstacles that hinder progress in agriculture, agribusiness, entrepreneurship, and decent wages for rural jobs. This study provides examples of successful youth-led enterprises in agriculture and agribusiness. It aims to encourage young people to consider the agriculture sector as one of the best options for self- employment, thereby combating high youth unemployment. Documented models have been compiled to inform policymakers and development partners on how to assist young people to become successful agro-entrepreneurs, create jobs, move into the fast-growing agribusinesses roles, take advantage of other sustainable rural economic opportunities, and improve incomes by raising productivity. I hope the models documented in this book will help IsDB’s MCs to develop customized strategies and practical programs to address youth employment and invest in better information systems to monitor how well these strategies are working, post-Covid 19. These models have clearly illustrated that the agriculture and agribusiness sectors provide investment and job opportunities, thus addressing the challenge of youth employment in SSA. Additionally, valuable insights are provided here on measures to improve access to Islamic financing, including private sector sources brought to bear on inclusive Value Chains (VCs). The book also provides useful lessons on the policy and institutional support that is needed to grow sustainable and inclusive VCs. The evidence demonstrates that good policies, a conducive business environment and strategic support from governments can help agribusiness reach its potential. Dr Mansur Muhtar Vice President, Operations Islamic Development Bank, Saudi Arabia
About the author Dr Umar I. Kamarah is a Senior Rural Development Economist and food security specialist at the Islamic Development Bank (IsDB) where he has worked for more than a decade. His areas of expertise include Rural Livelihoods, Agribusiness, Youth employment, Micro finance, Land Tenure Security, Natural Resources Management, and Community-Driven Development (CDD). He leads or supports Bank’s work in these areas to offer solutions to clients and other development partners. It involves clients and partner-support in the design and implementation of rural poverty reduction and inclusive growth programs in the 57 member countries of IsDB. His current areas of interest are social entrepreneurship, promotion of on-farm and off-farm jobs, social and environmental safeguards, ICT-based innovations in agriculture and rural development, strengthening local institutions, economic and social organizations and networks of the poor. Before joining IsDB, he was a rural development specialist at the World Bank in Washington, DC. He also served as a field officer for the United Nations Development Program (UNDP) in East Timor. Dr Kamarah successfully completed his MA in Development Studies at Durham University, UK before gaining a PhD in rural development at the University of Manchester; and holds a BA degree in sociology from Fourah Bay College, University of Sierra Leone. A respected author, researcher and recognized social scientist especially on CDD post conflict reconstruction, Dr Kamarah has worked for the last twenty years in mostly fragile and post-conflict countries. He provides thought leadership, strategic vision, and direction as Task Team Leader (TTL) for numerous projects with community empowerment components for the Bank’s agriculture and rural development portfolio of US$ 550 million, with projects across Africa, Asia, Middle East and Latin America. For example, one of the most impactful development projects he designed as the TTL was the Community Agriculture Infrastructure Improvement Program (CAIIP) of US$ 720 million in Uganda, jointly funded by IsDB and AfDB (Africa Development Bank) through a community development project. It received a Development Impact Honors Award in 2013 from the US Treasury Department in Washington DC, recognizing excellence in project design and implementation. He has authored a number of publications and working papers. Notable achievements include the well-received publication of his book on Rural CDD entitled Sustainable Rural Development: Semantics or Substance? The study of agricultural and rural development projects in Sierra Leone, University Press of America, which provides detailed coverage of the role of civil society and local institutions in rural development. Recent publications include: (i) Understanding Agricultural Value Chains in Uganda’s Diary sector: the role of Rural Producer Organizations in Pre & Post COVID-19 Era - published in 2021, GlobeEdit, Mauritius; (ii) “Livestock Value chains that foster inclusivity and scaling up” in Inclusive Growth: Making Value Chains work for Smallholder Farmers, pp 51 to 66 (co-authored with S. Staal, et.al) published in 2020, Islamic Development Bank, Saudi Arabia; (iii) “Combating Marine Pollution in Sierra Leone” in A Better World Volume 6 Life Below Water: Actions and Commitments in Support of the Sustainable Development Goals SDGs, pp 85 to 87 – published in 2020, Human Development Forum, United Kingdom. [ ii ]
Acknowledgments During the final weeks of putting this manuscript to bed, something awful happened. Tragically, Mohamed S. Fofana, who was Deputy Governor, Bank of Sierra Leone and champion of the rural sector agenda, passed away in Freetown, Sierra Leone. The basis on which an institution is founded is that it comprises far more than the sum of its individuals, but institutions are built, steered, and governed by people. To use a well-worn phrase, ‘people matter’ — in determining not only the effects of development projects, but also the effects of development institutions. Mr. Fofana mattered a great deal to the themes discussed in this book. For example, that limited economic opportunities in rural areas make it difficult to secure decent and productive employment, hence the need to create viable economic opportunities for youth in the rural sector. Involving youth in agriculture, either through (self) employment or through entrepreneurship is increasingly seen as a potential solution to unemployment, food insecurity, rural poverty and migration. As a valued friend and mentor, this book, dedicated to Mr. Fofana, represents a small recognition of those debts that we cannot now repay. The preparation of this publication was possible thanks to valuable contributions of individuals, divisions, organizations and their inputs are gratefully acknowledged. This book benefits from documents and reports, including important IsDB reports: IsDB (2020), Operation Evaluation Department, Jeddah, Saudi Arabia; IsDB Operations Evaluation Department, Synthesis Report of the Evaluation of the IsDB Interventions in the Agriculture and Rural Development Sector (1991–2014); IsDB (2018), Change for Impact — Transforming Agriculture and Rural Development in IsDB member countries; IsDB (2020), Inclusive Growth, Making Value Chains Work for smallholder Farmers, Jeddah, Saudi Arabia. The article presented in Chapter 5: ‘Private Sector Engagement — Insights from the Uganda Rice Scheme’ was prepared by Zafer Ozkhan, Operations Team Leader (OTL) for Regional Hub Uganda as well as the project management team in Uganda and me. For Chapter 6: ‘Financing Smallholder Agribusinesses and Promoting Access to Islamic Financial Products,’ I received relevant technical inputs including documents and the Project Completion Report (PCR) from Khalid Abdel Rahman Mohamed Ahmed, OTL in Rabat, Morocco. Useful comments on the various drafts of the book were received from the following IsDB staff: Sabri Er, Khalid Abdel Rahman Mohamed Ahmed, Jamal Mamoud, Biola Kazeem Badmos, Baboucarr Jaw, Zafer Ozkhan, Khalid Hilal, Sameh Hussein, Ali Khan, Abdulaziz Slaoui, retired IsDB staff, Kafkas Caprazli (Food and Agricultural Organization of the United Nations - FAO), Mohamed AwDahir – (FAO) and John McGregor, retired senior World Bank economist. Our thanks also go to our consultant, Ollen Wanda in Uganda and team, and to Khushnud Alam and Abdulaziz Chauhdary, IsDB for administrative support. The book was generously supported by our charitable organization, the IQRA Foundation for Sierra Leone. Special thanks are due to the peer reviewers of the manuscript: IsDB; Sameh Hussein, senior technical cooperation coordinator, Africa, IsDB; Bradley Todd Hiller, Lead Climate Change Specialist (Mitigation), Frank F. K. Byamugisha, former operations adviser and lead agriculture specialist in the Africa region of the World Bank, Washington DC; and Abdoul Karim Ouro Samah, senior advisor to executive director of the World Bank, Washington DC, whose careful review and advice contributed to the final outcome. Finally, I would like to express gratitude to my wife, Fatmata, and children Najmudeen, Umar, Khadija, Fahad and Hamza. While, I recognize the support and role played by many people and institutions in the research and completion phase of the present report, I alone remain responsible for all its shortcomings. Umar I. Kamarah Jeddah, Saudi Arabia June 2022 [ iii ]
[ iv ] List of figures What is Agribusiness? ����������������������������������������������������������������������� vi Pathways to smallholder agriculture and resource requirements ����������������������������������������������������������������������������������������� 12 Access to traditional and mobile money accounts across four countries ������������������������������������������������������������������������14 Distribution of underutilized land across SSA ������������������� 15 Hectares of arable land per person in agriculture (10 years average) in selected countries ������������������������������15 Estimated (1950–2000) and projected (2000–2050) rural population growth rates in developing regions ��������������������������������������������������������������������������� 16 Location of Uganda in East Africa ������������������������������������������24 Economic growth rates (%) for agriculture, services and industry since 2000 ����������������������������������������������24 Some selected socioeconomic and demographic indicators FY 2018/19 ��������������������������������������������������������������������� 25 Documentation phases ������������������������������������������������������������������ 28 Comparison of working versus non-working across gender and residence ����������������������������������������������������32 Share of young people who transited by subcategory and occupation (%) ������������������������������������������������������32 Occupation of youth by residence �����������������������������������������33 Share of youth employment by sector ���������������������������������� 33 Pathways for agricultural employment andtheir requirements ��������������������������������������������������������������������������������������� 35 Table 9 Coffee production, export volumes (million, 60kg bags) and value (US$, million) �������������������� 41 Livestock ownership and numbers by household ����������46 CURAD agribusiness incubation model �������������������������������55 The 3-tier agribusiness model – Kigarama Commodity Marketing cooperative society ���������������������� 57 Partners and responsibilities ��������������������������������������������������������58 The 4-tier agribusiness model: m-Omulimisa Agtech 59 Achievements of mobile extension services �������������������� 60 m-Omulimisa progress in agricultural insurance ������������� 60 The 4-tier agribusiness model – Twezimbe Area Cooperative Enterprise ������������������������������������������������������������������63 Partners and responsibilities for Twezimbe ACE ������������� 63 The Youth champion: Nucleus agribusiness model ����� 65 The farmer researcher agribusiness model ������������������������66 Tukwatirile Wamu youth seed farmer group partners and their responsibilities ��������������������������������������������67 NUCAFE organizational structure ������������������������������������������� 68 NUCAFE partners and their roles ���������������������������������������������70 Youth agriculture livelihood model — Handz (U) ����������72 Youth learning/livelihood agribusiness program model �����������������������������������������������������������������������������������75 Bongomin Group 3-tier youth agribusiness model �������77 Gender segregated data of smallholder rice outgrowers under the PRUL contract farming scheme in various locations (parishes) across five districts in eastern Uganda ���������������������������������������������������������������������������� 87 Instruments for working capital (excluding risksharing modes) �����������������������������������������������������������������������������������93 Term financing instruments ���������������������������������������������������������� 94 Implementation framework of Ard El Kheir for the YES program �����������������������������������������������������������������������������������������95 The Milk for Good business model �����������������������������������������97 Contract farming model ����������������������������������������������������������������98 Attributes of water harvesting and utilization technologies �������������������������������������������������������������������������������������� 106 Attributes of proven agro processing and value addition equipment developed in Uganda �������������������� 106 Attributes of farm implements developed in Uganda ������������������������������������������������������������������� 107
[ v ] List of acronyms 3ADI African Agribusiness and Agroindustries Development Initiatives AGRA Alliance for a Green Revolution in Africa AU African Union BOU Bank of Uganda BTVET Business Technical and Vocational Education Training CAADP Comprehensive Africa Agricultural Development Program CDO Cotton Development Organization CDD Community Driven Development CGIAR Consultative Group on International Agricultural Research CTA Cotton Textiles and Apparel CUC Cumulative Undisbursed Commitments CURAD Consortium for Enhancing University Response to Agribusiness Development DDA Dairy Development Authority DLG District Local Government DRC Democratic Republic of Congo EAC East African Community ECA Economic Commission for Africa EPRC Economic Policy Research Centre EPZ Export Processing Zone FAO Food and Agriculture Organization of the United Nations FDI Foreign Direct Investment FOAM Farmers Ownership Agribusiness Model GAP Good agronomic practices GDP Gross Domestic Product GHG Green House Gases Ha Hectare HDI Human Development Index IFAD International Fund for Agricultural Development ILO International Labor Organization IRD Integrated Rural Development LFPR Labor force participation rate MAAIF Ministry of Agriculture, Animal, Industry and Fisheries MFPED Ministry of Finance, Planning and Economic Development MSME Micro Small and Medium Enterprises MT Metric Tone MTIC Ministry of Trade, Industry and Cooperatives MUK Makerere University Kampala NARO National Agricultural Research Organization NDP National Development Plan NEET Not in employment education or training NEPAD New Partnership for Africa’s Development NPA National Planning Authority NRM National Resistance Movement NUCAFE National Coffee Farmers Organization PCR Project Completion Report PEAP Poverty Eradication Action Plan PNPM National Program for Community Empowerment (Government of Indonesia’s flagship community driven development program) R&D Research and Development RHU Regional Hub Uganda SACCO Savings and Credit Cooperative Organization SDGs Sustainable Development Goals SMEs Small to Medium Size Enterprises SSA Sub-Saharan Africa SWF Sovereign Wealth Fund TGCU The Grain Council of Uganda TVET Technical Vocational Education Training UBOS Uganda Bureau of Statistics UCDA Uganda Coffee Development Authority UGX Ugandan Shillings UIA Uganda Investment Authority UNDESA United Nations Department of Economic and Social Affairs UNDP United Nations Development Program UNECA United Nations Economic Commission for Africa UNIDO United Nations Industrial Development Organization UNICEF United Nations Children Fund USAID United States Agency for International Development VSLA Village Savings and Loans Association WB World Bank WDI World Development Indicators YES Youth Employment Support
[ vi ] WHAT IS AGRIBUSINESS? Agribusiness is a broad concept that covers input suppliers, agro-processors, traders, exporters and retailers. Agribusiness provides inputs to farmers and connects them to consumers through the financing, handling, processing, storage, transportation, marketing and distribution of agro-industry products and can be decomposed further into four main groups: 1 Agricultural input industry for increasing agricultural productivity, such as agricultural machinery, equipment and tools; fertilizers, pesticides, insecticides; irrigation systems and related equipment 2 Agro-industry: Food and beverages; tobacco products, leather and leather products; textile, footwear and garment; wood and wood products; rubber products; as well as construction industry products based on agricultural materials 3 Equipment for processing agricultural raw materials, including machinery, tools, storage facilities, cooling technology and spare parts 4 Various services, financing, marketing and distribution firms, including storage, transport, ICTs, packaging materials and design for better marketing and distribution. Agribusiness is thus a term used to mean farming plus all the other industries and services that constitute the supply chain from farm through processing, wholesaling and retailing to the consumer (from farm to fork in the case of food products). Agro-industry comprises all the post-harvest activities that are involved in the transformation, preservation and preparation of agricultural production for intermediary or final consumption of food and non-food products (Wilkinson & Rocha 2009). It consists of six main groups according to the International Standard Industrial Classification (ISIC), namely food and beverages; tobacco products; paper and wood products; textiles, footwear and apparel; leather products; and rubber products. The term captures a diverse range of primary and secondary post-harvest activities, ranging from basic village-level commodity preparation to modern industrial processing and involving widely differing levels of scale, complexity and labor, capital and technology intensity. Food processing industries tend to dominate this sector in developing countries, including Africa. Rao (2006) groups food processing industries into three categories: Primary — those that involve the basic processing of natural produce, for example, cleaning, grading and dehusking Secondary — those that include simple or elementary modification of natural produce, for example, hydrogenation of edible oils Tertiary — those that include some form of advanced modification to the natural produce such as making it into edible products like tomatoes into ketchup, dairy products into cheese etc. The agrifood system encompasses the interlinked set of activities that run from “seed to table”, including agricultural input production and distribution, farm-level production, raw product assembly, processing and marketing. It encompasses the value chains for different agricultural and food products and inputs and the linkages among them. The agrifood system is also a shorthand term for agriculture and related agro-industries. While most of the analysis refers explicitly to that part of this “expanded agriculture” that produces food, the main findings and conclusions are focused on how to effectively engage and attract youth in agriculture. Here, the way forward is either through self-employment or through entrepreneurship. Agro-processing is the “subset of manufacturing that processes raw materials and intermediate products derived from the agricultural sector. Agro-processing industry thus means transforming products originating from agriculture, forestry and fisheries.” (FAO 2019)
[ vii ] Overview More than ever, Africa is in need of its youth to develop the agricultural sector. Rural youth are the future of food security, yet few young people see a future for themselves in agriculture or in rural areas. Limited access to credit, land and other productive resources makes it difficult for young people to consider a future in agriculture. So, the key question is: how can these hurdles be overcome such that the African youth can be re-engaged in agriculture? Sub-Saharan Africa (SSA) has the world's fastest growing population as well as the youngest. The subcontinent, is projected to be home to 1.7 billion people by 2050, making it the second most populous region in the world (after South Asia) and the only region in which the rural population will still be growing. About 65 per cent of the total population of Africa is below the age of 35 and 10 million youth enter the labor market annually. If well harnessed, the high youth population would be one of the greatest assets available to African countries and would prove a considerable force for improving the productivity and growth of all sectors of Africa’s economy. Africa’s youth bulge offers a range of opportunities (Kamarah, 2016, 2020). Africa faces an unprecedented opportunity because half of the population is under 25 years of age. Each year between 2015 and 2035, there will be half a million more 15-year-olds than the year before it. Africa’s youth bulge offers a range of opportunities that include working age labor to produce goods and services and a chance to capture the manufacturing jobs that are relocating from other countries due to wage rises. Despite these potential opportunities, failure to efficiently exploit the youth dividend for development might generate social unrest. By 2035, the number of sub-Saharan Africans reaching working age (15–64 years) will exceed that same number in the rest of the world combined and, by 2100, SSA’s share of the global labor force is expected to have increased from 10 per cent in 2010 to 37 per cent. The prospect of 90 million new labor market entrants by 2030 demands serious attention from planners and resource allocation decision makers. The 18 million productive jobs that will be needed yearly through to 2035 to absorb new entrants is around six times the number that are currently created in the continent each year. The agricultural sector holds great potential for growth and socioeconomic transformation of African economies and the creation of jobs for the vast majority of youth. The emergence of dynamic, competitive industries based on agriculture will be central to meeting Africa’s extensive employment and food security challenges. Agriculture, already Africa’s biggest employer, is the most immediate means of catalyzing economic growth and employment for young people (Filmer and Fox, 2014). To realize this potential, farming must shift rapidly from its present status as an occupation of last resort and low productivity to one of technical dynamism and recognized opportunity. This will be realized through making the necessary investments across the agricultural value chain linking production agriculture to agribusiness and the creation of vertically integrated agro-industries. This study assesses agribusiness models and strategies that promote youth employment in the agricultural sector in Uganda with potential for scalingup and replication within SSA. The study assesses the status of youth employment in agriculture; identifies the major agro-enterprises with greatest potential for deepening and expanding youth employment; documents the existing successful agribusiness models for youth employment; and examines the mechanization of agricultural value chains. The Ugandan economy has experienced high economic growth rates over the last three decades, maintaining average economic growth rates of 6.5 per cent per year since 1990. This good economic performance has resulted in improvements in the socioeconomic conditions and wellbeing of the population. From 1990 to 2018, poverty decreased from 56.4 per cent to 21.4 while life expectancy increased from 45.9 years to 63.4 years. While these successes are appreciated, the high economic growth rates have not translated into commensurate growth rates in employment. Most of this growth has been driven by that in the services sector and, while this has expanded in size, its share of employment remains very low. As the services sector has grown highly over the last three decades, agricultural sector growth has been low, with its share of contribution to GDP declining while remaining the biggest employer. The The Ugandan economy has experienced high economic growth rates over the last three decades maintaining average economic growth rates of 6.5 per cent per year since 1990. This good economic performance has resulted in improvements in the socioeconomic conditions and wellbeing of the population
[ viii ] industrial sector that, for long, has been envisaged as the major source of employment creation has not taken off and the share of population engaged in the sector remains low at 7.1 per cent. This slow growth is a major challenge for Uganda as its rapid population growth requires large-scale job creation, especially in the industrial sector to absorb new entrants into the labor market (Kamarah, 2016). Harnessing the power of the human capital is a key pillar in the medium- and long-term development plans and strategies of the Ugandan Government. Vision 2040, Uganda’s long-term development aspiration, identifies inadequate human resources as one of the critical challenges that constrains development. A large youthful labor force that is poorly educated and skilled is central to this challenge. These youths have not been gainfully employed and remain underemployed within low productive, low return and uncompetitive informal enterprises including subsistence agriculture and the informal services sector. The structure of youth employment by sector differs from the aggregate employment for the whole population where agriculture is the leading source of employment. While 64.6 per cent of the population is engaged in agriculture, only 37.8 per cent of the youth population is engaged in the sector. The low share of youth employment in agriculture could partly be explained by the challenges that hinder youth from engagement in the sector. These include limited access to land, limited access to capital, agriculture being predominantly rural, and poor attitudes of youth towards agriculture. The high youth population in the service sector is also a significant driver of the growth in employment in services generally. With the limited growth of formal jobs, the informal sector has been the major source of employment across all major sectors of the economy. Only 6 per cent of the youth are employed as professionals while 91 per cent were in informal employment. Overall, 31 per cent of the total youth population is engaged exclusively in subsistence agriculture production only, but with great variation between gender, and areas of residence. How can struggling small businesses and agroenterprises be helped supported? In an attempt to answer this question, agro-enterprises with the greatest potential for deepening and expanding youth employment in agriculture were identified. These are value chains that employ the majority of youths in agriculture and hold great potential for youth employment because of the size of the market opportunities and their suitability for youth conditions and needs. Five agricultural value chains were identified for support, and their opportunities presented, namely: dairy, maize, coffee, cotton, and meat. The meat value chain covers produce from all livestock including beef, goat, mutton, pork and poultry. Support is aimed at helping small businesses and jobs impacted by Covid-19, and strengthening institutions and policies for economic recovery. Several youth-led agribusiness models and strategies for youth employment were identified. There are multiple ways through which youth agribusiness models can emerge, grow and become important drivers for the growth of the sector and of youth employment itself. A few agribusiness models were identified. The models The 3-tier agribusiness model of Kigarama Commodity Marketing Cooperative Society of Isingiro district, Western Uganda — with a membership of 450 youths, the society is engaged in the business of agricultural production, community seed multiplication, bulking, collective marketing of produce, purchase of agricultural inputs, produce storage and primary processing. With a number of partnerships with government, NGOs and the private sector, the society is able to bulk 100Mt per season for members, but has capacity to scale up to 350Mt. The 3-tier agribusiness model of the Bongomin Group Ltd involves the group as the service provider with an intermediary role in training, skilling and management of unskilled and semi-skilled wage workers. The model works well in labor-intensive agro-enterprises such as rice. The lesson from this model is that a focus on training of an unskilled and semi-skilled labor force in the agricultural sector enhances the employability of these wage earners. The 4-tier agribusiness model of m-Omulimisa — a youth-led agricultural technology company operating an ICT-powered model using a network of 40 village agents, all youths, to provide a bundle of agriculture-related services including agriculture extension, agricultural insurance, inputs demand aggregation and distribution, soil testing and agricultural finance. Of the 13,314 farmers registered with the platform, 47.5 per cent are youths. Leveraging ICT, telecommunication, data, and innovation, the company developed a 3-step program aimed at directly supporting MSMEs with training, financing, Only 6 per cent of the youth are employed as professionals while 91 per cent were in informal employment. Overall, 31 per cent of the total youth population is engaged exclusively in subsistence agriculture production only
[ ix ] and support for the stabilizing and scaling of resilient businesses that can withstand future shock. The company targets micro- and small-scale enterprises run by young people between the ages of 20 and 30, engaged in critical food, cash crop, and livestock value chains from the provision of inputs, primary production, processing, logistics, storage, and distribution in the five focus districts. Additionally, the company aims to partner with organizations, cooperatives, and associations with agrifood members. Through these engagements, grassroots and MSME agripreneurs from the five focus districts will be identified and incorporated. The 4-tier agribusiness model of Twezimbe Area Cooperative Enterprise, Ntwetwe sub-county, Kyankwanzi district, engages in the business of production, trading and grain processing but also of savings mobilization for members. The enterprise comprises 2,679 youth out of 3,689 members and produces maize, beans and coffee. The cooperative is able to aggregate 2,000Mt of produce per season and supplies to local and international markets. It also has a milling capacity of 5Mt per day that serves members for free but also non-members at a fee. The cooperative links members to financial institutions to obtain credit for investment. The farmer ownership agribusiness model of the National Union of Coffee Agribusinesses and Farm Enterprises (NUCAFE) seeks to transform the way in which youth coffee farmers approach production, educating the farmers in how to become proactive and innovative entrepreneurs. With 450,000 youth farmers engaged in production, the Union facilitates bulk marketing, bulk purchase of inputs, bulk transportation and marketing. The farmer remains owner of the coffee commodity through all value chain processes, with the Union earning a commission. Handz (U) operates an integrated agribusiness model in the coffee value chain in Western Uganda. The company supports smallholder coffee farmers in the region to improve productivity and quality. It multiplies and supplies clean and updated planting materials to the farmers and trains them in improved coffee management including proper planting, good harvesting and drying practices. Other business models include: v The youth champion model practiced by Alarm vocational institute v TEXFAD 2-tier agribusiness model v Smallholder commercial farmer agribusiness model promoted by MAAIF v Youth champion agribusiness model operated by MAAIF v Youth-led cooperatives agribusiness model promoted by USAID v Youth out-growers/satellite farmers agribusiness model v Agribusiness incubation model promoted by Makerere University and NARO v The school farm camp initiative agribusiness model promoted by the Ministry of Agriculture and Ministry of Education. The study also examines the mechanization of agricultural value chains and highlights that the utilization of mechanization in agriculture in SSA is the lowest in the world. In the region, 50 to 85 per cent of work on farms continues to be done manually through human power alone. Limited adoption of mechanization leads to heavy losses through exposure to drought, post-harvest losses and failure to attract and integrate into lucrative global value chains. Despite the low use there are some successful innovations that can be scaled such as the pedal pump, the rice thresher-cleaner in Senegal, and the wheel tractor. Low investment in research and development in agricultural mechanization is the biggest challenge hindering the emergence of technologies suitable to local needs. Youth in agriculture face a number of challenges that restrict growth in incomes, growth of their agroenterprises, and survival. Some of these challenges are youth-specific while others are structural and cut across all dimensions of the economy. These include: limited access to land; limited access to affordable and quality inputs; inaccessible and unaffordable financial services; limited access to agricultural extension services; weak and unstructured agricultural markets; poor perception of youth towards agriculture; high levels of poverty in rural areas; limited access to affordable and suitable agricultural mechanization technologies; climate change; inadequate knowledge and skills; and inadequate physical infrastructure and facilities. This study makes several recommendations that include strengthening partnerships; training and skilling of youth; the provision of necessary physical infrastructure such as roads, electricity and water; the establishment of youth development funds; enhancing the capacity for research and development; and the establishment of youth programs rather than projects. Low investment in research and development in agricultural mechanization is the biggest challenge hindering the emergence of technologies suitable to local needs
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PART 1: Context [ 1 ]
[ 3 ] KEY MESSAGES u The informal sector is the main source of employment across subSaharan Africa, accounting for 70 per cent of all employment. u The rise of Africa’s youth population offers the continent an unprecedented opportunity for capturing manufacturing jobs that are relocating from other regions due to wage rises. u The emergence of dynamic, competitive industries based on agriculture will be central to meeting Africa’s massive employment and food security challenges. CHAPTER 1: Overview of youth employment in agriculture in SSA
[ 4 ] UNLOCKING THE PROMISE OF YOUTH EMPLOYMENT IN AGRICULTURE IN SUB-SAHARAN AFRICA Introduction Africa south of the Sahara has the world’s fastest growing population and the youngest. By 2050 the sub-continent, is projected to have 1.7 billion people, will be the second most populous region in the world (after South Asia) and the only region in which the rural population will still be growing. Other regions will experience a significant decrease in rural populations between 2015 and 2050 (-50 per cent in East Asia, -10 per cent in South Asia, -45 per cent in Europe), at the same time that SSA adds an estimated 150 million rural people (nearly +30 per cent). The young people yet to be born are in addition to the 330 million already present and about to enter the labor force, of whom 195 million will live in rural areas, calling for focused investment in the rural sector (Hazell & Rahman 20 15). According to AGRA (2019), about 65 per cent of the total population of Africa is below the age of 35 and 10 million youth enter the labor market annually. If well harnessed, the high youth population is one of the greatest assets that African countries can tap into and an estimable force for improving the productivity and growth of all sectors of Africa’s economy. Africa’s youth bulge offers a range of opportunities (Filmer and Fox, 2014). First, the world’s goods and services cannot be produced without working-age labor. SSA, along with South Asia, can be the main supplier of the world’s workforce, either by producing goods and services in the region or by sending workers to regions with a shortage of workers. Second, wages in the manufacturing industries in other regions are rising, providing an opportunity for Africa’s labor force to compete for these jobs. Third, increasing concentrations of workers in urban areas can be a source of innovation and rapid economic growth (World Bank, 2018). Unlike other regions, youth comprise the majority of the population in urban and rural areas in Africa. They come from different and highly varied social backgrounds, cultures and traditions. With proper planning and well-structured social and economic policy formulation, and implementation, Africa’s youth can be mobilized to provide goods and services for the continent and for the world in general. Improvements made to the educational attainments of young people offers African youths with the required basic skills and empowers them to make meaningful and productive contributions to the continent’s economic and social wellbeing. Since 1990, SSA’s progress towards universalizing primary education has been nothing short of stupendous. The region’s average primary gross enrolment ratio (GER) rose from 68 per cent in 1990 to 98 per cent in 2015, and enrolments grew from 63 million students to 152 million, with 78 per cent of primaryschool-age children enrolled (Sajitha et al, 2018). This achievement enables Africa to equip its youth with basic competencies in literacy, numeracy, and science that are an essential building block for knowledge capital required for tapping into world’s rich accumulation of scientific and technological knowledge for economic and social transformation. Realizing the potential of youth in African development, many African countries have increasingly made youth development central to their countries’ visions and strategies. The African Union Agenda 2063 highlights youth as an important resource for triggering growth and socioeconomic development of national economies (Africa Union Commission, 2015). Indeed, investing in young people living in rural areas is key to enhancing agricultural productivity and food security, boosting rural economies, and reducing ruralto-urban migration. Young people have the enormous potential for the innovation and risk-taking that is often at the core of growth and development in rural areas, particularly in smallholder agriculture. Young farmers and producers in Community Driven Development (CDD) programs often have greater capacity for innovation and entrepreneurship than adults. This capacity may better equip them to address the emerging requirements of agriculture and the rural non-farm economy. Because CDD devolves responsibilities and resources to the local level, activities can occur simultaneously in a large number of communities without being constrained by central bureaucracy. When rural youth communities are trusted to drive development and are given appropriate information, support and clear rules, a system can be put in place not to provide for the rural poor but to facilitate their active and ongoing capacity to roll out poverty reduction efforts. The US$2 billion National Program for Community Empowerment (PNPM) in Indonesia provides an example of a large-scale program of national support to CDD that has been successfully implemented (S. Wong and S. Guggenheim 2018; World Bank, 2001, S. Guggenheim etal., 2006). Young people bring energy, vitality, and innovation into the workforce. When their willingness to contribute is matched with opportunity, they have Young people have the enormous potential for innovation and risk-taking that is often at the core of growth and development in rural areas
[ 5 ] a transformative impact on economic growth and social development, often referred to as the youth dividend. African leaders and policymakers know that the youth dividend will not be deposited automatically into national accounts; they will have to take proactive steps to collect it, and most are ready to do so. Therefore, channelling the energy, strength, and dynamism of Africa’s youth into productive, competitive and profitable agribusinesses, including food production, will boost agricultural productivity, ensure a sustainable food production system, create jobs, and generate incomes (AGRA, 2015). The experiences and lessons learned from Asia and Latin America demonstrate that one of the most effective means of reducing poverty is to provide proactive avenues for employment creation, with a particular emphasis on youth. The SSA region has the highest poverty rate in the world and, despite registering high economic growth rates over the last two decades, the decline in the rate of poverty has been considerably lower than the region’s economic growth rates due to the slow growth in agriculture (World Bank 2013). This is understandable given that growth coming from agriculture has been shown by empirical research to be more povertyreducing than growth coming from other sectors (Diao, Hazell and Thurlow, 2010; Christiaensen, Demery and Kuhl, 2011). Hence, to reduce poverty, there is a need to boost productivity and growth in agriculture through modernization and commercialization which includes reversing the ageing trend of the African farming population (the average farmer in SSA is 60 years old (FAO 2014)) by attracting youth who are better educated than the older generation and yet remain unemployed or underemployed (Filmer et al. 2014). Absorbing youth into agriculture would boost youth employment and overall economic growth as well as reducing poverty in SSA, taking advantage of the large and growing youth population in the region relative to the rest of the world. Africa projected to experience higher youth population growth rates in the next 30 to 80 years Between 2020 and 2050, the World’s population will grow by another 2.4 billion people, of whom the majority (around 1.3 billion) will be born in Africa (UNDESA, 2015). Nine of the world’s top ten countries ordered by the youngest median population age will also be in the region. By 2050, the population of 28 countries in Africa are projected to double, while Ethiopia, the Democratic Republic of Congo, Nigeria, Tanzania and Uganda are among nine countries that will account for more than half of the world’s population growth. Nigeria, presently the world’s seventh most populous country, is projected to rise to third place in the world, surpassed only by China and India. It follows that the share of Africans in the world’s population is set to grow from 16 per cent in 2015 to 25 per cent by 2050 and then 40 per cent by 2100 (UNICEF, 2014). By 2035, the number of sub-Saharan Africans reaching working age (15–64 years) will exceed that same number in the rest of the world combined (IMF, 2015) and, by 2100, SSA’s share of the global labor force is expected to have increased from 10 per cent in 2010 to 37 per cent. Again, between 2015 to 2030, the number of young people aged 15 to 24 years in SSA, potentially able to enter the labor market, will increase by over 90 million. The prospect of 90 million new labor market entrants by 2030 demands serious attention from planners and resource allocation decision makers. The 18 million productive jobs that will be needed yearly through to 2035 to absorb new entrants (IMF, 2015) is around six times the number that are currently created in the continent each year (AfDB, 2016). If this expansion takes place without an improvement in education, skills and job creation, already low incomes could fall, and marginalized youth may emerge as a force for social dislocation and political destabilization (Samman and Watkins, 2017). Alternatively, through proper planning, Africa can exploit the opportunity that would come with an accelerated demographic transition with enhanced skills development and job creation. With a proper groundwork therefore, SSA’s favorable age structure offers a tremendous opportunity to accelerate economic growth and human development. The school-age population of SSA (aged 17 years and under) will grow by 314 million between 2015 and 2050 and the growth will be concentrated among older children (UNICEF, 2014). As of 2019, some 198 million young people were in the 15–24 age group in SSA, and this is expected OVERVIEW OF YOUTH EMPLOYMENT IN AGRICULTURE IN SSA The 18 million productive jobs that will be needed yearly through to 2035 to absorb new entrants is around six times the number that are currently created in the continent each year 1
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