Africa Agricultural Machinery Market Analysis, Growth and Opportunity Assessment

The African agricultural machinery market is projected to register a CAGR of 5.8% during the forecast period. In 2019, tractors dominated the agricultural machinery market. Individual ownership, collective ownership, fee-based service delivery, and leasing are the types of machinery usage systems followed in the region. The rising demand for mechanization and the increased number of medium-scale farmers owning tractors have created private mechanization hiring market in the region, especially in Ghana. As a result, the mechanization level is projected to increase in the future, thereby driving the growth of the market.

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Key Market Trends

Increasing Focus on Sustainable Mechanization

Agriculture plays a crucial role in Africa’s economic development, but the sector is performing below its potential. Currently, around 60% of Africa’s population depends on agriculture for livelihood, yet the sectorial contribution to the gross domestic product was paltry 21% in 2016. Even though Africa has the highest area of uncultivated arable land in the world, amounting to nearly 202 million hectare in 2016, its productivity lags far behind other developing regions. Moreover, crop yields are only reaching 56% of the international average. So, there is a dire need to increase crop yields in the coming decades to keep pace with food demand driven by population growth and rapid urbanization in Africa. Therefore, the mechanization can, directly and indirectly, bridge the yield gap, by reducing the harvest and the post-harvest losses. According to the Food and Agriculture Organization of the United Nations (FAO), agricultural mechanization in Africa is still at its initial stages. FAO undertook the studies and revealed that mechanization in the country is slowly moving from hand-driven technology to power sources. For instance, as of 2016, Central Africa had 15% of its land entirely under power sources, followed by West, Southern, and Eastern Africa, with 30%, 46%, and 50%, respectively. As a result, the availability of tractors per hectare in the Southern African Development Community(SADC) has risen by 12% from 2010 to 2016. However, as stated in the sustainable development goals, indicated in agenda 2063, the African Union Commission(AUC), and the Food and Agriculture Organization of the United Nations (FAO) view agricultural mechanization as an immediate indispensable action attaining the Zero Hunger vision by 2025. Such initiatives towards sustainable agricultural mechanization are likely to boost the market for agricultural machinery and implements shortly.

Tractors Dominated the Market

The African tractors market was valued at USD 1.21 billion in 2019 and is anticipated to witness a CAGR of 9.6% during the forecast period. According to the research survey conducted by Agri evolution Alliance, Africa holds a great market potential for agricultural machines, including tractors in particular. The government’s increasing support to develop this market is estimated to drive this sector. For instance, the government in Ghana provides tractors at subsidized rates to entrepreneurs who run 89 centers that rent out, and service tractors. In major parts of Africa, tractor sales were affected due to uncertainty regarding crop yields and exchange rates.

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Christophe Rude

Christophe Rude

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