Unlocking the potentials of Micro and Small Enterprises (MSEs) in building local technological capabilities in agro-processing industry

Abstract

This research was aimed at feeding into the quest for ways that would help advance Africa’s effort to industrialize its economy. Empirical evidence suggests transforming the agro-industry and inserting MSEs into value chains is the most feasible strategy. Inspired by arguments against global value chains (GVCs) orientation of Africa’s industrialization strategies, this research investigated the link between local production and technological capability in Africa using indicators from various international databases and cross-country quantitative analyses. The research also undertook an in-depth qualitative investigation on Ethiopia’s edible oil industry as an important case capable of shedding some light on problems linked to Africa’s agro-processing with a special focus on local production system and technological capability. The finding revealed strong positive linkages between local value chains and technological/innovation capabilities in Africa. Structural constraints, under-developed supply chains, and poor implementation and coordination of policies have limited Africa’s capability to harness potentials inherent in the agro-processing sector.