Africa’s $1trn food market seen driving economic growth in a decade

Food production and agribusinesses, estimated at over $1 trillion in market value, have been identified as sources of growth for African economies by 2030, according Africa Agriculture Status Report released Wednesday in Cote d’Ivoire.

According to the report, agriculture will be Africa’s quiet revolution, with a focus on SMEs and smallholder farmers creating the high productivity jobs and sustainable economic growth that failed to materialise from mineral deposits and increased urbanisation.

The report stated that smart investments in the food system could change Africa’s position if planned correctly.

“The power of entrepreneurs and the free market is driving Africa’s economic growth from food production, as business wakes up to opportunities of a rapidly growing food market in Africa that may be worth more than $1 trillion each year by 2030 to substitute imports with high value food made in Africa,” the report indicated.

Agnes Kalibata, president of the Alliance for a Green Revolution in Africa (AGRA), which commissioned the study said: “Africa has the latent natural resources, skills, human and land capacity to tip the balance of payments and move from importer to exporter by eating food made in Africa,” adding that the report shows that agriculture involving an inclusive transformation that goes beyond the farm to agri-businesses will be Africa’s surest and fastest path to that new level of prosperity.

She opined that for Africa agricultural revolution to succeed there need to be a huge difference from those seen in the rest of the world, requiring an inclusive approach that links millions of small farms to agribusinesses, creating extended food supply chains and employment opportunities for millions including those that will transition from farming.

“This is in contrast to the model often seen elsewhere in the world of moving to large scale commercial farming and food processing, which employs relatively few people and requires high levels of capital,” she said.

The report highlights the opportunity for Africa to feed the continent with food made in Africa that meets the growing demand of affluent, fast growing urban populations on the continent looking for high value processed and pre-cooked foods.

It equally advocates that this opportunity should be met by many of the continent’s existing smallholder farmers as part of the growing demand for Africa’s food is met by imports.

The report acknowledges that the private sector holds the key to the transformation of the food system in as much as impressive value addition and employment are being created by SMEs along value chains in the form of increased agricultural trade, farm servicing, agro processing, urban retailing and food services.

“Large agribusinesses like seed companies, agro processors and supermarkets are also playing an increasing role in the food value chain in many regions,” said Peter Hazell (IFPRI), the technical director of the report.

The report also urged governments to nurture a globally competitive food production sector through measures such as increasing infrastructure investment in secondary cities and towns, improving the reliability of energy and water supplies, building more wholesale market spaces, promoting open regional trade, identifying and investing in first mover crops and introducing stricter standards for food safety and quality.

“Smart support is just as important as scale of support for Africa’s highly diverse group of famers and agribusinesses. To step up their game, businesses needs assistance tailored to distinct groups of viable small farms and agribusinesses at different development stages, rather than blanket support for all,” added Kalibata.