Market Trends of Africa Agricultural Machinery Industry
This section covers the major market trends shaping the Africa Agricultural Machinery Market according to our research experts:
Increasing Focus on Sustainable Mechanization
Even though Sub-Saharan Africa has the highest global area of uncultivated arable land, productivity lags far behind other developing regions. Also, yields are only about half the international average, far below the growth levels needed to keep pace with food demand driven by population expansion. However, mechanization may dramatically improve the yield gap. Therefore, the focus on sustainable agricultural mechanization has been a prime developmental goal in the African region. Furthermore, in 2018, FAO and the African Union launched the Framework for Sustainable Agricultural Mechanization for Africa (SAMA), setting out a long-term vision and national and regional priorities, emphasizing cooperation with the agricultural machinery industry. Interventions could aim to move smallholders from hand-tool-based labor to innovative technologies. Sustainable mechanization relieves labor shortages, cuts working time, raises productivity, and encourages youth into agriculture to create jobs.
In 2021, the European Agricultural Machinery Industry Association (CEMA) and the Food and Agriculture Organization of the United Nations (FAO) renewed their memorandum of understanding (MoU) on sustainable agricultural mechanization until 2025, which includes a focus on African countries.
Tractors Segment Dominates the Market
According to the research survey conducted by Agri evolution Alliance, Africa holds great market potential for agricultural machines, including tractors. The government's increasing support to develop this market is expected to drive this sector. For instance, the Ghana government provides subsidized tractors 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.
Additionally, issues concerning land restitution and farmworkers' shares in farms added to the farmers' uncertain conditions. According to the latest report published by the South African Agricultural Machinery Association (SAAMA), tractor sales increased by 15.5% in September 2022 compared to September 2021. Tractor sales amounted to 6,479 units in September 2022, up from 5,610 units in September 2021. However, the region is currently facing major constraints that hamper the market's growth. One such limitation is the private sector's involvement, which is severely hampered by government resistance and corruption, affecting the imports of tractors.
