Africa’s food mar­ket to hit $1trn by 2030

Con­ti­nent must add value to its ex­ports and start see­ing farm­ing from a busi­ness point of view

The East African - - OUTLOOK - By VIC­TOR KIPROP Spe­cial Cor­re­spon­dent

Agri­cul­ture is ex­pected to re­place min­er­als as the driver of Africa’s eco­nomic growth, as busi­nesses wake up to op­por­tu­ni­ties of a rapidly grow­ing food mar­ket in Africa.

The lat­est Africa Agri­cul­ture Sta­tus Re­port (AASR) launched at this year’s African Green Revo­lu­tion Fo­rum in Abid­jan, Cote d’ivore, shows that agri­cul­ture will be Africa’s quiet revo­lu­tion, with SMES and small­holder farm­ers cre­at­ing the high pro­duc­tiv­ity jobs and sus­tain­able eco­nomic growth which failed to ma­te­ri­alise from min­er­als and in­creased ur­ban­i­sa­tion.

Ac­cord­ing to the re­port, Africa’s food mar­ket is rapidly grow­ing, with op­por­tu­ni­ties in the sec­tor es­ti­mated to be worth more than $1 tril­lion ev­ery year by 2030, to sub­sti­tute food im­ports with high value food made in Africa.

“Africa has the la­tent food re­sources, skills and land ca­pac­ity to tip the bal­ance of pay­ments and move from im­porter to ex­porter by eating food made in Africa,” said Dr Agnes Kal­i­bata, Pres­i­dent of Alliance for Green Revo­lu­tion in Africa.

In­clu­sive ap­proach

“This re­port shows us that agri­cul­ture in­volv­ing an in­clu­sive trans­for­ma­tion that goes be­yond the farm to agribusi­ness will be Africa’s surest and fastest path to that new level of pros­per­ity,” Dr Kal­i­bata said.

She added that in or­der to suc­ceed, Africa’s agri­cul­tural fo­cus has to be dif­fer­ent from those seen in the rest of the world.

It should be an in­clu­sive ap­proach that links mil­lions of farms to agribusi­ness, cre­ates ex­tended food sup­ply chains and em­ploy­ment op­por­tu­ni­ties for mil­lions, in­clud­ing those who will tran­si­tion from farm­ing.

This, the re­port says, will be in con­trast to the model in other parts of the world where farm­ing is shift­ing to largescale com­mer­cial con­cerns and food pro­cess­ing, which em­ploys rel­a­tively fewer peo­ple and re­quires a lot of cap­i­tal.

The an­nual study noted that de­spite hav­ing 37 per cent of its pop­u­la­tion liv­ing in ur­ban cen­tres, Africa has seen most jobs cre­ated in the lower pay­ing, less pro­duc­tive ser­vices sec­tor rather than heavy in­dus­try.

The re­port also high­lights the op­por­tu­nity for Africa to feed it­self by meet­ing the de­mands of af­flu­ent, fast grow­ing ur­ban pop­u­la­tions on the con­ti­nent look­ing for high val- ue pro­cessed and pre-cooked food.

Value ad­di­tion

Ac­cord­ing to the African De­vel­op­ment Bank, Africa’s food im­ports stand at $35 bil­lion with the fig­ure ex­pected to rise to $110 bil­lion by 2025, un­less the con­ti­nent im­proves the pro­duc­tiv­ity and global com­pet­i­tive­ness of its agribusi­ness and agri­cul­ture sec­tors.

“Im­pres­sive value ad­di­tion and em­ploy­ment is be­ing cre­ated by SMES along value chains in the form of in­creased agri­cul­tural trade, farm ser­vic­ing, agro pro­cess­ing, ur­ban retailing and food ser­vices,” said Peter Hazell, Di­rec­tor, In­ter­na­tional Food Re­search Pol­icy In­sti­tute.

Satel­lite track­ing, big data and other dig­i­tal tech­nolo­gies were fronted as among the new op­por­tu­ni­ties for the agri­cul­tural sec­tor to help lo­cate new-high value agri-eco­nomic zones, smarter fi­nanc­ing and food se­cu­rity poli­cies.

“Smart sup­port is just as im­por­tant as the scale of sup­port for Africa’s highly di­verse farm­ers and agribusi­nesses. Th­ese busi­nesses need as­sis­tance tai­lored to groups of vi­able small farms at dif­fer­ent de­vel­op­men­tal stages, rather than sup­port for all,” Dr Kal­i­bata said.

The sta­tus re­port urges govern­ments to stim­u­late pri­vatepub­lic part­ner­ships to pro­vide more in­no­va­tive fi­nanc­ing and in­sur­ance prod­ucts for small­holder farm­ers and their house­holds.

Cur­rently, Africa ac­counts for less than two per cent of the $2 bil­lion global agri­cul­tural in­sur­ance busi­ness.

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