Smallholder Farmers’ Access to Inputs and Finance in Africa

Abstract

Agriculture remains the mainstay of most economies inAfrica, accounting for 37% of gross domestic product (GDP), nearly 60% of export earnings, and over 76% of employment. Over the decades, agricultural value added has averaged 17%, growing at a rate of 1.4%. This has been driven primarily by low use of modern technologies such as improved crop varieties, fertilisers and other complementary inputs, which in turn is an artefact of limited access to agricultural finance. The direct consequence of low agricultural productivity is the high rates of poverty and malnutrition on the continent. African governments are renewing efforts to promote agriculture, recognising that GDP growth originating in agriculture is about four times more effective in reducing poverty than GDP growth in other sectors, although how best to do this within very complex political economies remains a challenge. As an important first step towards reducing poverty and increasing wealth among smallholder farmers in Africa, this chapter explores the major challenges in farmers’ access to productive farm inputs and finances and reviews alternative approaches that could be used to improve access by farmers to these resources.