A new attempt at Africa's industrialization?

By

Afrika is about ready. There are promising approaches for a sustainable industrialization. However, the path poses challenges to the continent.

(c) Rainer Kwiotek/Zeitenspiegel
The digital revolution will shape Africa's future. (c) Rainer Kwiotek/Zeitenspiegel/Menschen für Menschen

By Helmut Asche

Helmut Asche

Professor Helmut Asche is an economist and sociologist. From 1985 to 1998 he worked as an economic advisor for GTZ. Until 2016 he taught as an honorary professor at the Department of Anthropology and African studies, University of Mainz.

All contributions

The refugee crisis shed a completely new light on the issue of jobs in Africa

In most African countries, the majority of people work in agriculture. According to predictions of the future economic structure of sub-Saharan Africa, by far the largest number of new jobs – at least in rural areas – will also be in agriculture. Alongside this, employment opportunities are emerging in modern service sectors, especially the IT industry.

 

It seemed unrealistic for Africa to imitate the East Asian development model.

 

 Less than 20 years ago, experts confidently described this combination of agriculture and services as typifying the trend of development on the African continent. Especially in the English-speaking world, academic papers that addressed the question of ‘should Africa industrialise?’ regularly concluded that it should not and recommended instead that it should leapfrog the industrial age. This leapfrogging would involve omitting an entire economic sector – that of manufacturing – and moving directly into an agriculture-cum-service age. It seemed unrealistic for Africa to imitate the East Asian development model. This way of thinking completely excluded a specific industrial policy that could have boosted the faltering development of industrial productivity. There was too deep-seated a memory of the grandiose attempts of Latin America and Africa to bring about industrialisation through state-owned companies operating behind high tariff walls – endeavours that with some exceptions resulted mainly in the production of white elephants.

 

There has been a radical paradigm shift here – and it has occurred not just since the refugee crisis shed a completely new light on the issue of jobs in Africa but in fact some years before that. New studies of structural change and employment trends in Africa have shown that continuation of the present trend – involving job growth in the private and public service sectors and to some extent in agriculture – will not create anywhere near the number of jobs needed to absorb the up-and-coming cohorts of young people looking for work. The demographic window of opportunity will quickly snap shut again. Extrapolated scenarios highlight the need for a radical game change – which will not happen without energetic political support. Alongside manufacturing industry as a driver of job creation, industrial policy thus once again takes centre stage in the development policy debate. Also on the agenda now are the new challenges of economic and environmental sustainability. The belching smokestack phase of catch-up industrialisation is no longer a realistic option, in Africa or elsewhere. A paradigm shift is therefore needed on no fewer than three fronts. The task facing a ministry of trade and industry that is responsible for coordinating this process with the private sector could not be harder.

 

Planning has become harder rather than easier

However, there is at least some clarity with regard to the practical essentials of modern industrial policy – namely a joint search for industrial opportunities by the public and private sectors, and selective promotion with clear time horizons, feedback loops and public control (see: PEGNet Policy Brief). What is far less clear in theoretical terms is which industrial sectors the economic latecomers among the developing countries should focus on. This is a result of the heuristic disposition of modern industrial policy, which has elevated collective self-discovery in a world of complex inter- and intra-industry division of labour to the status of a principle. Patterns of growth are generally more diverse than they were in earlier industrial periods. The classical sequence of industrialisation – typically from light to heavy industry – is not one that developing countries can readily pursue. Rational planning in the context of modern industrial policy has thus become harder than in the past rather than easier.

 

Of course even in such a scenario many agriculture-related jobs will still be created, for example in agroindustry or in the processing of agricultural commodities such as textiles and leather. The situation benefits from the fact that the paradigmatic flying geese of labour-intensive industrialisation, which originally took off in Japan, moved westwards from China a long time ago. However, an economy as a whole does not learn much from the establishment of mature labour-intensive industries. In Africa – as elsewhere – job creation is not the same thing as knowledge creation. An economic policy that promotes dynamic industrial networks must aim at both. With deliberate reference to the processors contained in our computers, I have termed this the ‘dual core’ of modern industrialisation strategies. In practice it is South Africa’s partially successful industrial policies that provide the closest example.

 

Many of these trends cannot be confidently predicted for Africa – and this uncertainty extends to the promise held out by the digital revolution. IT-saturated sectors are one of the principal areas in which leapfrogging is actually taking place; it can be observed in the skipping of the landline telephone stage and the development of innovative banking services. Startups focusing on the development of software and IT-based services are blossoming in Africa. By contrast, there is as yet no clear picture of how developing regions will be affected by the new risks to classical industrial employment that arise from the spread of the Internet of Things and what Germany has termed ‘Industry 4.0’. We do not know precisely what the ultimate effect of the digital revolution in Africa will be.

 

Let’s stick to the subject of leapfrogging. The second sector that is coming up with innovative technical solutions in Africa is renewable energy: off-grid solar systems are particularly promising and combinations of off-grid and on-grid solutions will no doubt take off soon. As in the field of telecommunications, the systemic failure of large-scale networks in Africa is being creatively bypassed and the outcome is a growing contribution to sustainable economic development as defined by the SDGs. In any case, it has now become clear that – contrary to the theories of old-fashioned development economics – leapfrogging relates not to the skipping of industrialisation in general but to progressive leaps forward geared to sustainable and inclusive solutions within particular industries and services. However, the African energy policy debate is still a long way from coming down on the side of sustainability. Large coal-rich countries such as Mozambique, Nigeria and South Africa face a complex public choice, at least for a transitional period in their development: should they rely entirely on renewable energies or go for an energy mix for the time being?

 

Some researchers say that in view of the global trade in tasks, African companies should focus on individual work processes and not on the establishment of entire industrial sectors.

 

Equally unclear is the outlook with regard to industrial division of labour. Promoting the participation of African producers in global and regional value chains is one of the new development cooperation mantras. Some researchers say that in view of the global trade in tasks, African companies should focus on individual work processes and not on the establishment of entire industrial sectors. Yet despite recent descriptions of the great unbundling of concentrated industrial production, we are now witnessing a trend towards re-agglomeration of important industrial sectors. Does it make sense after all to have a fully integrated textile chain in Ethiopia, or at least in a regional community? It is hard to advise developing countries on this point. In view of these uncertainties, which can only be reduced by a structured public-private dialogue with practical iteration loops, and also on account of the notorious political and economic risks – corruption, clientelism and so on – modern industrial policy in developing countries is one of the most challenging areas of policy. Many countries will be unable to deal with it, especially as there are a couple of other problem areas that also come into play.

 

One of the most exciting development policy challenges for some time to come

(c) Rainer Kwiotek/Zeitenspiegel
Helmut Asche: "Africa is full of imaginatives for a sustainable industry."

Promotion of industry is particularly difficult in a group of countries that should be able to fund it themselves: countries that are rich in mineral resources. After decades of discussion of the ‘resource curse’ and the Dutch disease, development economists still have no more than a vague idea of how to deal with the structural disadvantage of agriculture and the manufacturing sector.

 

And, finally, there is the issue of the connection between industrialisation and regional integration. One aspect of this is the fact that, for reasons of economies of scale, a whole range of industries depend on large connected markets. At the same time, successful regional integration requires the relatively balanced industrialisation of member states, and that is even harder to achieve politically. Promoting regional value chains does not automatically have a balancing effect. In consequence, both industrialised and developing countries often fall for the idea of pursuing an industrial policy that hits out at their own regional association. Whether it is ‘Buy American’ at the expense of NAFTA or ‘Buy Ugandan’ at the expense of the EAC, it is always a problematic policy, to put it mildly. The links between agricultural, industrial and trade policy are in any case uncertain territory. For all these reasons, the list of African countries that have actually pursued a successful industrial policy in particular sectors is very short: Botswana, Ethiopia, Mauritius, Rwanda and South Africa. And there is not a single oil producer among them.

 

One can also have a positive take on this: sustainable industrialisation is going to remain one of the most exciting development policy challenges for some time to come, and Africa is full of imaginative initiatives in this field.

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How a Nigerian fintech wants to secure 1 billion US dollars for farms

An Interview with Blessing Mene

Small farmers often have a hard time getting financing. An app in Nigeria wants to change that: Founder Blessing Mene about what his app offers - and about the opportunities and limitations of agricultural financing.

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Partners for change - Network meeting on transforming agricultural and food systems

A Contribution by the Federal Ministry for Economic Cooperation and Development

At the network meeting "Partners for change - Transformation to a food secure, resilient and sustainable future", almost 250 participants from over 20 countries came together to exchange experiences and ideas on the transformation of agricultural and food systems. The final product, joint recommendations to transform agricultural and food systems, can now be read online.

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The common thread is the importance of collaboration

A contribution by Scaling Up Nutrition Movement

It takes the joint efforts of diverse actors to achieve a transformative impact on the global food system. Barbara Rehbinder, Scaling Up Nutrition Movement (SUN), discusses four people-centred principles to get closer to this goal.

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Agricultural Financing – from a broader Perspective

A Contribution by GIZ

In Sub-Saharan Africa, not all financial institutions (FIs) have access to knowledge about how to implement processes to enhance rural financial inclusion. The pan-African Community of Practice (CoP) plays a pivotal role in supporting these institutions along this transformative journey.

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Agriculture is more than Culture or Tradition

A Contribution by Simeon Kambalame

How can agriculture engage more young people in rural areas? Advocacy and education campaigns can play an important role here. Simeon Kambalame, Timveni Child and Youth Media Organisation, has launched such a campaign in Malawi.

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Sowing change

A Contribution by Brot für die Welt

Roughly 800 million people suffer from hunger worldwide. Change is needed - for people and for the environment. Brot für die Welt reports on the starting points offered by everyone's ecological footprint and handprint.

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Shu Wen Ng, the Clear-Sighted

An Interview with Shu Wen Ng

Shu Wen Ng is a health economist. She knows what is best suited to go on a plate. But how can this be achieved on a mass scale in countries with lower incomes? "The solutions to gett there already exist," she says, "but what is often missing is courageous leadership to implement them."

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Stick together and learn from each other

By Claudia Jordan

During the Women Leadership Programme in May 2024, around 20 women from African countries and Germany met again for a one-week workshop in Bavaria, Germany to become fit for leadership in their organisations. One topic that concerns the women across countries is climate change, but also violence against women and their discrimination in agriculture.

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African countries decide to tackle soil health challenges

A Contribution by GIZ

At the Africa Fertilizer and Soil Health Summit (AFSH), organized by the African Union (AU) and the Government of Kenya in May, the Nairobi Declaration was adopted. It aims to triple domestic production of organic and inorganic fertilizers by 2034 and to improve access and affordability for smallholder farmers. GIZ reviews the Summit.

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Coordination as a Game-Changer

A Contribution by Emmanuel Atamba & Larissa Stiem-Bhatia

Drawing on dialogues with experts in Kenya, TMG Research releases its latest policy brief highlighting the critical need to strengthen coordination mechanisms in food systems governance. Emmanuel Atamba and Larissa Stiem-Bhatia from TMG Research summarize the results.

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"Pandemic increases violence against women"

Interview with Léa Rouanet

African countries still face huge gender gaps in terms of access to work and capital. What are the consequences of Corona for women in Africa? Jan Rübel interviewed Léa Rouanet on lockdowns and gender-based violence. The economist works at the Africa Gender Innovation Lab of the World Bank.

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'It has never been more possible'

Interview with Carin Smaller (Ceres2030)

Over a period of two years, the Ceres2030 team spent researching answers to the questions of how much it will how much it will cost to realize SDG 2 and where that money should be spent most effectively. IISD Senior Advisor and Ceres2030 Co-director Carin Smaller about small farmers, machine learning and women empowerment.

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Is the international community still on track in the fight against hunger?

Interview with Miriam Wiemers (Welthungerhilfe)

The Global Hunger Index (GHI) 2020 shows that the world is not on track to meet the international goal of “zero hunger by 2030”. If we continue at our current speed, around 37 countries will not even have reached a low hunger level by 2030.

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"Agricultural research unties the Gordian knot"

Interview with World Bank Vice President Voegele

The CGIAR agricultural research organization is systematically repositioning itself. We spoke with Juergen Voegele, Vice President for Sustainable Development at the World Bank, about progress to date - and discuss what needs to be done collectively to stop global hunger in ten years.

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GFFA 2021 focussed on climate and COVID-19

A report by David Sahay (Zeitenspiegel)

110 speakers from 120 countries met virtually at the Global Forum for Food and Agriculture (GFFA) to discuss the challenges to global food supply. They asked the question: How can food systems support the health of people and the planet?

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“We have to prepare for the unexpected”

Interview with Dr Maria Flachsbarth (BMZ)

In August, Germany’s development ministry set up a division concentrating on One Health topics. Parliamentary State Secretary Maria Flachsbarth on knowledge gaps at the human-animal-environmental interface, the link between One Health and food security, and lessons learnt from previous pandemics.

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KLAUS WOHLMANN / GIZ

"Farmers are smart"

Interview with Maria Andrade

From the lab to the masses: Maria Andrade bred varieties of biofortified sweet potatoes which are now widely used all over the continent. She sets her hope on the transformation of African agriculture.

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(c) Kate Holt / Africa Practice

Leveraging investment impacts

A contribution by Heike Baumüller, Christine Husmann, Julia Machovsky-Smid, Oliver Kirui, Justice Tambo

Any initiative whose aim is to reduce poverty in Africa should focus first on agriculture. But what kind of investment has the greatest impact? The use of scientific criteria provides some answers.

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Small-scale farmers’ responses to COVID-19 related restrictions

A study by SLE

The lockdown due to COVID-19 hit the economy hard - including agriculture in particular with its supply chains and sales markets. What creative coping strategies have those affected found? The Seminar for Rural Development has begun a research study on th

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"We must mobilise all available resources"

A contribution by Ismahane Elouafi (ICBA)

Freshwater deficits are affecting more and more people throughout the world. In order to counter this, our global food system will have to change, our author maintains. A case for more research on alternative crops and smart water solutions.

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ONE WORLD no hunger - Meet the people driving rural transformation

A program by the partners of the special initiative One World no Hunger

The future is rural. On September 24, meet leaders and visionaries from Africa and South Asia who will enter into dialogue with european key actors.

Join uns here to meet the people.

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City, Country, Sea: 6 Innovations in the Fight Against Climate Change

A listicle for climate-neutral agriculture

Vertically growing plants, magnetic cotton. Hairy leftovers fertilizing fields, tractors running on algae? These six innovations could lead agriculture’s next Green Revolution!

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What is Our Food Worth to Us?

A Contribution by the TMG Think Tank for Sustainability

Towards integrated accounting standards in the food and farming sector with the help of True Cost Accounting (TCA).

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A New Mindset to Reform Agriresearch

A Contribution by Lennart Woltering (CGIAR)

In context of the 15th CGIAR System Council Meeting, Lennart Woltering shares his assessment of the ongoing One CGIAR reform process.

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Diversity Is the Fundamental Principle to Use

An Interview with Shakuntala Thilsted

A conversation with aquatic researcher Shakuntala Thilsted on the long-neglected nutrition benefits of aquatic diets and the empowering qualities of a sustainable aqua-food systems transformation.

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For a just transition to a sustainable planet we must secure land rights

A contribution by TMG

At the UNCCD COP15, the Töpfer Müller Gaßner Think Tank (TMG) hosted four side events. The agenda of the kick-off event included discussions for the Human Rights and Land Navigator.

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The lessons learned from the last food crisis - A solution?

A Contribution by Agnes Kalibata

Inadequacy and fragility of food systems becomes more apparent with every food crisis. The question we must answer is “Where do we go from here?”

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Food security is more than production volumes and high yields

A Contribution by Adrian Muller, Catherine Pfeifer and Jürn Sanders (FiBL)

Taking Biodiversity Focus Areas under production or abandoning lower yielding, more extensive production systems is the wrong approach to mastering the looming global food crisis, say the authors of the Research Institute of Organic Agriculture (FiBL).

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COVID-19 and Rising Food Prices: What’s Really Happening?

A Contribution by IFPRI

Taking a look at the data (as of February 11th 2022) what the current price hike means for world hunger and what can be done to prevent from another food crisis.

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The Rice Sector in West Africa: A Political Challenge

New insights on trade and value addition in the rice sector in West Africa

Low import tariffs, smuggling activities, unpredictable tax exemptions and weak enforcement of food safety standards: The potential of local rice value chains is undermined in West African countries.

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5 Questions for Jann Lay: What is Corona doing to the economy?

Interview with Jann Lay (GIGA)

The Corona pandemic is hitting economies around the world very hard - but developments in African countries are quite diverse. There are different speeds, resiliences and vulnerabilities. What are the reasons for this? Apl. Prof. Jann Lay of the GIGA Institute provides answers.

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Water may offer the only chance

Interview with Caroline Milow and Ramon Brentführer

Groundwater resources remain dormant in the soil of African regions. Where does it make sense to use them – and where does overexploitation of nature begin? Caroline Milow (GIZ) and Ramon Brentführer (BGR) talk about potentials in the future and lessons from the past.

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The Insect Whisperer

A Contribution by Jan Rübel and Zain Jafar

Agriculture is coming under pressure worldwide: bacteria, viruses and insects are causing problems for crops. In Palestine, Dr. Rana Samara from the Palestinian Academy of Science and Technology is researching solutions to the problem. And she finds them in nature itself.

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"Soy can be made into more than just flour"

A report by Johanna Steinkühler (GIZ)

The soybean is a natural crop that can be used to make a lot of food. So, Tata Bi started a small processing business first on her own, then with a few other women, which provides the women with an additional source of income year-round besides selling the soybeans.

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"Without peace, there will be no development"

Interview with Karina Mroß (DIE)

What contribution does development cooperation make to conflict prevention? What can it do for sustainable peace? Political scientist Karina Mroß talks to Raphael Thelen about post-conflict societies and their chances for peaceful development.

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MarkIrungu /AGRA

Spiritual mortar for the young generation

A contribution by Jan Rübel

Fred Swaniker is working building a new era of leaders. And what about agriculture? ‘It needs to be more sexy!’

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(c) Privat

The 'Grey Gold'

A contribution by Maria Schmidt (GIZ)

The Cashew Council is the first international organisation for a raw material stemming from Africa. The industry promises to make progress in processing and refining cashew nuts - and answers to climate change

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No rainforest for our consumption

A contribution by Jenny Walther-Thoß (WWF)

In the tropics rainforests are still being felled for the production of palm oil, meat and furniture. It is high time to act. Proposals are on the table.

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(c) GIZ

Sustainable Artisanal Fisheries and Aquaculture in Rural Areas

Fish is important for combating malnutrition and undernourishment. But it is not only notable for its nutritional value, but also secures the livelihoods and employment for 600 million people worldwide.

A Project of GIZ

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Youth as key actors for a transformation of agri-food systems

Five Questions for Anke Oppermann

In October, the Committee on World Food Security (CFS) adopted policy recommendations ‘Promoting Youth Engagement and Employment in Agriculture and Food Systems’. Anke Oppermann answers five questions on youth employment in the agricultural sector.

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Priscilla Impraim and her chocolate business

A contribution by Jan Rübel

Priscilla Impraim is one of the first women in Ghana to enter the chocolate business. Despite some hurdles, she founded the company Ab Ovo Confectionery Limited in 2006 with currently six permanent employees and 25 seasonal employees.

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Achieving more together – New forms of cooperation for sustainability in the cotton sector

A Contribution by Saskia Widenhorn

Saskia Widenhorn, Head of the Cotton Component in Cameroon and the Sub-Saharan Cotton Initiative at GIZ, reports on the Bremer Cotton Week, which brought together international industry experts. The agenda included supply chain transparency, sustainability and new forms of cooperation between the private sector and partner countries.

 

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Why organic is a „blessed” method

An Interview by Claudia Jordan

Three female entrepreneurs from Mozambique, Sri Lanka and Uganda tell their stories about starting organic businesses from scratch, now selling Baobab Oil, Gotukola powder and Shea butter in international markets. And they explain why their business is almost 100 percent female.

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Sang'alo Institute invests in farming of sunflower crop

A contribution by James Wanzala

Kenya is a large importer of vetable oils mainly from Indonesia and Malaysia - amongst them sunflower oil. Due to the Russian war of aggression against Ukraine, there were supply bottlenecks and food shortages, leading to less affordable vegetable oils in Kenya. As a response to the lack of supply, the Sanga'alo Institute of Science and Technology, took that impulse, teamed up with the GIZ and established regional cultivation and refinement of sunflowers.

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Mozambique: How informal workers find jobs through an app

A Contribution by Leonie March

There are only about 1 million jobs in the East African country. The majority of the population works in the informal sector, and it can be difficult for them to find customers. Biscate offers a digital solution - without the need for internet, data or smartphones.

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Stepping into the future: How youth organisations are driving change

A contribution by Felix Chiyenda

Together they are stronger: In many African countries, young men and women are coming together to form youth organisations. These organisations help young people in rural areas to earn a living in the agricultural and food sector, creating prospects for the future in rural areas.

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The Principle of Sharing

A contribution by gebana

gebana, a Swiss fair trade company, follows the principle of "sharing" with its corporate philosophy: farming families in the Global South participate directly in the sales of their online shop. Caroline Schaar, Marketing at gebana, explains the company's approach.

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Where Goats Listen to the Radio

A Contribution by GIZ

German and Ugandan women farmers come together in Mecklenburg-Vorpommern to exchange experiences – from modern milking systems to the challenges of women's participation in agricultural decision-making. Amid goats, lavender ice cream, and engaging discussions, one thing becomes clear: women can achieve great things together, across borders and generations.

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Uprooting the Norm

A Contribution by GIZ

As a passionate social scientist and entrepreneur from Malawi, Ngabaghila Chatata knows that she can overcome any challenge. Her story stands out in a country faced with high unemployment, particularly in its rural areas. As the managing director of Thanthwe Farms, she has set out to inspire the next generation of young agripreneurs – proving that successful business starts with the right mindset, not only capital.



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