Agriculture remains the backbone of many African economies, employing about 60% of the population and contributing up to 35% of GDP in some countries. However, millions of farmers still struggle to access inputs, markets, and finance. This is where Market Systems Development (MSD) comes in.
Market Systems Development (MSD) is changing the way we think about agriculture in Africa. It focuses on fixing the whole system — not just helping individual farmers. With strong markets, better access to finance, and improved services, agribusinesses can grow and create more jobs.
History of Market System Development
The Market Systems Development approach evolved in the late 1990s, first popularized through DFID (UK) and the Springfield Centre. It replaced older models of direct intervention that often disrupted local markets.
MSD started as “Making Markets Work for the Poor” (M4P). It focused on:
- Identifying market barriers.
- Encouraging local solutions.
- Creating long-term, inclusive economic change.
By the early 2000s, MSD was widely adopted by donors like USAID, GIZ, SDC, and organizations such as Mercy Corps, Practical Action, and SNV.
What Is Market Systems Development?
Market Systems Development is a systemic approach that improves how agricultural markets function. It focuses on:
- Sustainability: No handouts only partnerships that last.
- Inclusivity: Markets that benefit smallholders, women, and youth.
- Scalability: Interventions that grow beyond pilot projects.
In practice, MSD improves:
- Input supply systems – Improving access to inputs (seeds, fertilizer)
- Market access – Building linkages between farmers, buyers, and service providers (processing, storage, logistics).
- Financial services – Improving access to information, and finance.(credit, insurance).
- Information services (prices, weather, extension).
Why Market Systems Development Matters Today
Africa faces a dual challenge:
- Feeding a growing population (projected to hit 2.5 billion by 2050).
- Creating jobs for over 10 million youth entering the job market each year (AfDB, 2023).
Yet, agriculture remains largely underdeveloped. For example:
- Up to 50% of perishable crops are lost post-harvest due to weak value chains.
- Only 4% of Africa’s arable land is irrigated.
- Less than 10% of smallholders have access to formal credit.
These are not just technical problems they are market failures. And MSD provides the tools to fix them.
Why Market Systems Matter for Agribusiness in Africa
Africa has huge agricultural potential. Yet, most smallholder farmers face:
- Low productivity.
- Poor access to markets.
- High post-harvest losses.
- Lack of finance and information.
These issues are often systemic, meaning they are part of how the market works. That’s why the Market Systems Development approach is important. It addresses the root causes.
When markets are inclusive and efficient:
- Farmers get better prices.
- Agribusinesses grow faster.
More jobs are created in rural areas
Key Benefits of Market Systems Development for Agribusiness Growth
1. Stronger Value Chains
MSD improves how products move from farm to market. It builds trust and cooperation between farmers, traders, processors, and retailers.
MSD builds links between actors across the value chain:
Farmers → Aggregators → Processors → Retailer
2. Access to Finance
Through MSD, financial institutions develop better products for farmers and agribusinesses. This helps them invest in growth.
By partnering with banks and fintechs, MSD expands access to tailored financial products like input credit, warehouse receipts, and crop insurance
3. Inclusive Growth
MSD focuses on women, youth, and marginalized groups. It makes sure they also benefit from market opportunities.
Agro-dealers, traders, and processors all play a role. MSD helps them become more efficient and responsive to demand.
4. Private Sector Engagement
The approach works closely with the private sector. It encourages companies to invest in sustainable agribusiness models.
MSD promotes win-win models where companies invest in inclusive sourcing and innovation. Examples include outgrower schemes, contract farming, and mobile-based services.
Case Study: Kenya’s Horticulture Sector
Kenya’s horticulture industry is a top export earner, valued at over KES 150 billion ($1.2 billion) in 2023 . Market Systems interventions have helped:
- Link over 200,000 smallholders to export buyers.
- Introduce cold chain infrastructure to reduce losses by 30%.
- Train farmers on GAP (Good Agricultural Practices) and GLOBALG.A.P compliance.
The result? Higher incomes, more jobs, and stronger agribusinesses across the country.
What’s Next?
The future of MSD in Africa lies in:
- Digital Transformation: Agri-tech platforms, e-extension, digital credit scoring.
- Green Growth: Climate-smart and regenerative value chains.
- Urban Agriculture: Growing markets for fresh produce in cities.
- Youth Inclusion: Agripreneurs using innovation to disrupt traditional systems.
According to McKinsey , Africa’s agribusiness sector could grow from $300 billion to $1 trillion by 2030 — if market systems work
Final Thoughts
Market Systems Development is not just a theory. It is a practical, proven approach that supports agribusiness growth in Africa. By building better systems, we can help agriculture thrive and bring lasting change to millions.
Africa’s agriculture sector is full of potential. But to unlock it, we must fix the systems that hold farmers and agribusinesses back.
Market Systems Development is a proven, powerful approach. It’s about transforming markets from farm to market so they work for everyone.
With the right investments, partnerships, and training, MSD can shape a more inclusive, resilient, and prosperous agricultural future for Africa.
