The Economist finds African trade bigger than thought — a chance to boost farm value-addition. How policymakers and agribusiness can capture more value locally.

A new analysis argues that African trade has been systematically underestimated — a conclusion with direct consequences for the agriculture sector. If intra-African trade and value-added agri-processing expand, farmers and processors could capture substantially more value domestically rather than exporting raw commodities. For African agriculture, this is a strategic moment: strengthen processing, harmonize standards and invest in logistics to retain a larger share of the food value chain.

The analysis highlights three structural shifts needed: (1) improved transport and customs systems to reduce the time and cost of moving food across borders; (2) investment in agro-processing and cold storage to convert raw commodity exports into higher-value products; and (3) regulatory harmonization and sanitary standards that open regional markets and reduce non-tariff barriers. For smallholders, value addition can mean farm-gate processing co-ops, local milling, and aggregation services that increase bargaining power and income.

Private investment, combined with targeted public policy (tax incentives for processing, infrastructure financing, and capacity building), can accelerate the shift. Donors and development finance institutions have a role in de-risking early investments in processing hubs and storage that support farmers and create jobs. The upside is significant: more jobs, higher farm incomes, and food systems that are less exposed to raw commodity price swings.