Agricultural value chains play a crucial role in driving East Africa’s economic growth, with micro, small, and medium enterprises (MSMEs) at the center of this transformation. Recent efforts have increasingly focused on empowering women and youth within these value chains, highlighting their significant contributions and the barriers they face.
Data from a survey of over 25,000 MSMEs across Kenya, Uganda, Rwanda, and Tanzania provides a detailed understanding of the agricultural sector’s structure and dynamics. A key finding is the strong involvement of youth in agricultural value chains, with about 72 percent of MSMEs led by individuals aged 18 to 35. However, the likelihood of older MSME owners being women is 41 percent higher. This trend may be attributed to younger women’s responsibilities in domestic and childcare duties, which often delay their entry into entrepreneurship.
Education has been identified as a major factor influencing MSME operations and success. In East Africa, agricultural commodity value chains involve a complex network of farmers, producers, aggregators, traders, transporters, and retailers. These actors work together to move goods from rural to urban markets, ensuring food security and economic sustainability.
Age-related occupational trends within the sector reveal that farming, fishing, and animal husbandry are 22 percent more likely to employ older MSME owners, while small-scale trade is 16 percent more common among youth-led MSMEs. These trends suggest that younger entrepreneurs often prefer ventures with quicker financial returns, while older business owners are more engaged in traditional farming and livestock activities.
One of the report’s key recommendations is the modernization of agriculture through technology and improved access to credit. Digital innovations could make agriculture more appealing to younger generations, encouraging balanced participation across different age groups. Access to financial services and investment opportunities is particularly important in enabling youth to scale their agricultural enterprises.
Vegetable and animal products stand out as some of the most prominent value chains in the region, reflecting the diversity of agricultural activities. Approximately 50 percent of MSMEs operate in the cereal value chain, highlighting the importance of staple food crops in East Africa. Additionally, a third of MSMEs are involved in edible vegetables, roots, and tubers, emphasizing the role of horticulture and root crops in regional food production.
The digitalization of agricultural business operations is another notable trend transforming the sector. Around 44 percent of MSMEs now own smartphones, enabling them to access mobile banking services, productivity apps, and e-commerce platforms. This shift towards digital solutions is improving financial transactions, enhancing market access, and increasing efficiency in input distribution.
Innovative platforms such as M-Kulima and M-Pesa are streamlining agricultural transactions, making it easier for small-scale farmers and traders to access credit, purchase inputs, and sell their produce. These technological advancements are not only increasing efficiency but also providing opportunities for financial inclusion and economic empowerment, particularly for women and youth.
Despite these positive developments, barriers remain for women and young entrepreneurs in agricultural value chains. Limited access to land, financing, and training continues to hinder their full participation and economic potential. Addressing these challenges through targeted policies and initiatives could further strengthen agricultural MSMEs and enhance East Africa’s economic growth.
Modernizing agricultural practices, expanding digital access, and improving financial inclusion will be key to sustaining and enhancing the contributions of MSMEs to the region’s development. By leveraging technology and supportive policies, East Africa’s agricultural value chains can continue to thrive, fostering economic resilience and improving livelihoods across the region.
