BY BEN EGUZOZIE
- $45bn needed to fully harness existing potential
- Only $7bn currently available
Africa’s agribusiness sector is predicted to grow to become a $1 trillion business by 2030. Already, leaders of the continent’s top agribusiness companies, while sharing their thoughts on the future of the industry, believe that agribusiness will become the ‘new oil’ on the continent.
Jennifer Blanke, vice president for agriculture, human and social development at the African Development Bank (AfDB), says agriculture is a key priority for the pan-African multilateral development bank through its Feed Africa strategy.
“By transforming Africa’s agriculture sector, it will become the engine that drives Africa’s economic transformation through increased income, better jobs higher on the value chain, improved nutrition, and so on,” Blanke said in a remark at an Africa Investment Forum (AIF) session titled, Agribusiness: Investment Conversation with Industry Leaders.
Participants at the AIF say, project sponsors, borrowers, lenders and investors, gathered at the AIF to make deals on investment opportunities are fuelling the motor of inclusive growth.
Africa has vast agricultural potential, and if well harnessed, the continent’s agribusiness sector is set to reach $1 trillion by 2030.
Some agribusiness leaders believe there is a need to invest $45 billion per year to harness the power of agriculture; and move up the value chain to create jobs and wealth.
At present, however, only $7 billion is invested in the sector. Investments from the private sector, leaders said, will create an adequate environment and enhance the emergence of locally owned agro-processing industries, capable of creating jobs and increasing incomes in rural Africa.
The continent could become a net exporter of agricultural commodities, replacing $110 billion worth of imports, as well as doubling its share of market value for select processed commodities.
The full-capacity session was a highlight of the AIF, organised by the AfDB. The event brought representatives from multilateral financial institutions, pension funds, sovereign wealth funds, government officials and private investors to Johannesburg, South Africa for three days.
Participants in the agribusiness session discussed the industry’s entire value chain. Leading the ‘fireside chat’ was a roundtable of experts that included Aliko Dangote, president and CEO of the Dangote Group; Zainab Ahmed, minister of finance of Nigeria; William Asiko, CEO of Grow Africa; John George Coumantaros, chairman, Flour Mills of Nigeria and TP Nchocho, CEO of Land and Agricultural Bank of South Africa.
“We need to do the research to produce the right solutions to the issues we might face along the value chain. Youth are particularly involved in this aspect as they know how to develop tools addressing issues such as water management and release,” said Dangote.
Agribusiness can also promote industrialisation and urban employment, break the ‘productivity gap’ of development, and improve the quality of life for all Africans. Attendees said Africa’s agricultural potential needs to be unlocked.
Session participants said they want to bring African agriculture to the next level. For the small and medium scale farmers, the main challenge remains access to finance.
Ahmed, Nigeria’s minister of finance, urged investors and development partners to adapt their policies to accommodate more participants in the agriculture value chain. “I want us to eat what we grow and consume what we produce,” Ahmed said.
Edward Mabaya, manager of agribusiness development at the AfDB, highlighted the vast investment opportunities in Africa’s agribusiness including, seed, fertiliser, mechanisation, processing and storage.
