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I read a fairly recent report published by the World Bank titled Growing Africa: Unlocking the Potential of Agribusiness. It was quite a large document and I think sharing all the information in one post will be a bit too much. In this post I will highlight  the current state, potential, and challenges of the agribusiness environment, according to the report.

CURRENT STATE

  • In most African countries, agriculture and agribusiness have been loosing in the competitiveness race.
  • Many developing countries, such as Brazil, Indonesia and Thailand, now export more agricultural produce than all of Sub Saharan Africa  (ex South Africa) combined.
  • Africa’s crop yield are way below potential. Crop models show that current maize yields reach only 20% of potential yield and that cash crops yield 30%-50% of potential yield.
  • The value of agricultural exports from Thailand (a country with 66 million people) now exceeds that of all of Sub Saharan Africa ex South Africa (a region of more than 800 million people).
  • The value of Brazilian exports is now 150% higher than the value of African exports, although it was similar to Africa’s in the 1980s.
  • While Africa’s export share is falling, Africa’s imports of many foods products have been rising.
  • Crops and livestock yields are often half of averages in Asia and Latin America, largely reflecting Africa’s very low use of modern inputs such as improved seeds, fertilizer and irrigation water.
  • Most African economies have a comparative advantage in agriculture. Africa has more than half of the world’s agricultural suitable yet unused land and its impressive water resources has scarcely been tapped.
  • Just eight countries contain two-thirds of this uncultivated land (Sudan, South Sudan, Democratic Republic of Congo, Mozambique, Madagascar, Zambia, Angola & Tanzania) although it is often in places far from ports and roads.
  • Africa has scarcely tapped its water resources. Sub Saharan Africa (ex South Africa) uses less than 2% of its renewable water resources, against a world average of 5%.

THE POTENTIAL

  • According to the report Africa earns an average of 24% of its annual growth from its farmers and their crops. The report estimates that if the sector is provided with more electricity and irrigation, smart business and trade policies and a dynamic private agribusiness sector that works side by side with government to link farmers with consumers in an increasingly urbanised Africa, agriculture and agribusiness together could command a US$1 trillion presence in Africa’s regional economy by 2030. Africa is now at a cross roads from which it can take concrete steps to take on a much bigger role in both the regional and global market or continue to lose competitiveness thus missing a major opportunity for structural transformation.
  • Agribusiness can play a critical role in jump starting economic transformation through the development of agro-based industries that bring much needed jobs and income.
  • Global experience suggests that with the growing incomes and urbanisation driving the commercialization of agriculture, the share of both downstream and upstream agribusiness activities are poised for rapid growth. This strong growth is an opportunity for agriculture.
  • Urban food markets are set to increase four fold to exceed US$400 billion by 2030, requiring major agribusiness investments in processing, logistics, market infrastructure and retail networks.
  • The most dynamic sectors overall are likely to be rice, feed grains, poultry, dairy, vegetable oils, horticulture and processed foods for import substitute, along with the traditional tropical exports and their derived products (especially cocoa, rubber, cashews and palm oil), together with some higher value horticultural crops, fish and biofuels for export.
  • Africa is a growing importer of processed food. It imports nearly US$400 million of processed fruit juices and canned fruits and vegetables, suggesting major agribusiness opportunities to develop local processing capacities

THE CHALLENGES & CONSTRAINTS

  • Developing downstream agribusiness activities (such as processing) as well as upstream activities (such as supplying of inputs).
  • Developing commercial agriculture.
  • Supporting and linking small holders and entrepreneurs to productive value chains.
  • Problematic and erratic policies in agricultural output and input markets.
  • Limited access to land and respect for community land rights. Difficulties for investors to access secured and tradable land rights and for government to protect the rights of small holders.
  • Poor infrastructure and high transportation cost.
  • Difficulties for small holders and small firms to access technologies, information and finance.

I hope THE POTENTIAL section has inspired some agripreneurs to find innovative and collaborative ways of tapping into the aforementioned opportunities.  No doubt, the challenges and constraints present real difficulties, and therefore impact our ability to achieve the level of required success. It is therefore imperative that we think creatively and innovatively to overcome these constraints to achieve tangible success. The next post will discuss what the report suggests as ways of overcoming these constraints…

Please share your thoughts…Thanks for stopping by!

http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/03/12/000425962_20130312103050/Rendered/PDF/756630v10REPLA0frica0pub03011013web.pdf

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3 thoughts on “Agribusiness

  1. Pingback: Women Educated for Agribusiness Leadership | LANDsds Sustainable Voice

  2. Pingback: TAKING ADVANTAGE OF OPPORTUNITIES IN AFRICAS’S AGRIBUSINESS | Africa

  3. Pingback: TAKING ADVANTAGE OF OPPORTUNITIES IN AFRICAS’S AGRIBUSINESS | TheInvestmentMan

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