When most people think of agriculture in Africa, images of poor and
overworked farmers with crude tools on a rural farm readily come to mind. Many,
especially young Africans, still think that agribusiness is a poor man’s
occupation. Nowadays everybody wants a white-collar office job in the city.
Agribusiness is hardly on anyone’s mind.
Did you know that Africa sits on an agribusiness goldmine but most
people just don’t see it? If you’re one of the blind, allow me to open your
eyes with a few exciting facts you need to know about agribusiness in Africa:
1. Africa’s
richest man, Aliko Dangote, recently invested $1 billion in rice production.
Every year, Africa spends billions of dollars on rice imports, and Dangote
wants a slice of the market.
2. Since 2009,
investors in the USA, Europe, Middle East and Asia have been buying and leasing
millions of hectares of African land for agricultural purposes. Many people may
not know it but there’s a trend of serious land grabbing by foreign interests
for African land.
3. Foreign Direct
Investment in African agribusiness was $10 billion in 2010 and is projected to
reach $45 billion by 2025. Agriculture is taking a huge leap in Africa and
investors want a piece of the action too.
4. Africa’s
agribusiness industry will be worth $1 trillion by 2030. That’s huge! If this
projection by the United Nations comes true, agribusiness will become the ‘new
oil’ in Africa!
In the light of these facts, the rich and wealthy folks are
investing in Africa’s agribusiness industry while the majority of Africans are
largely ignorant about the amazing potentials of agriculture on the continent.
Let me share with you five reasons why agriculture is the biggest
business opportunity right now in Africa. And why many of the world’s top
business people are investing in African agribusiness.
1. Africa has
cheap agricultural land
According to the World Bank, Sub-Saharan Africa is home to nearly
50% of the world’s fertile, usable and uncultivated agricultural land. The
size, over 200 million hectares! The continent is now widely considered to be
the future breadbasket of the world. It is this huge abundance of land
resources that gives Africa the strategic potential to feed the world!
Most of Africa’s agricultural land lies in the savannah and tropical
rain forest belt, which receives a favourable amount of rainfall and sunlight
all year round. As a direct consequence, more than 80% of food crops consumed
across the world can be produced here.
Interestingly, a large proportion of Africa’s agricultural land is
located in the rural areas. That’s why they’re often cheap to buy or lease. On
the average, one hectare of land (10,000sqm) can be leased for as low as $100
per year (depending on the location). This makes it one of the best land
bargains you can find anywhere in the world!
2. Africa has a
ready market and high demand for agricultural produce
Agribusiness is one of the best business opportunities in the world
as food never goes out of fashion. People must eat food every day!
Currently, Africa’s population is just over one billion people. At
its current growth rate, the continent’s population is expected to reach 2.2
billion by 2050. Now and in the future, Africa will always have a lot of mouths
to feed.
Africa currently spends billions of dollars every year to import
grains, flour and all kinds of finished and semi-finished foods which it can
produce locally. There is a huge opportunity for entrepreneurs who can provide
cheaper and locally-grown alternatives to the food that Africa imports.
It’s not just the food industry that depends on agribusiness.
Several other industries, especially the manufacturing and processing
industries, depend on agribusiness for a wide range of raw materials. As
Africa’s economies continue to grow, the demand for raw materials will surely
increase and create more interesting opportunities for agribusiness on the
continent.
3. Improved varieties
and farm practices are changing the game across Africa
Agribusiness in Africa has suffered through the years because of its
poor yields and crude farm practices. Most of the crops cultivated on the
continent produce very little and are often very prone to pests, diseases and
drought. As a result, most African farmers used to work very hard but have very
little to show for all their hard work during harvest time.
However, due to advances in crop/animal science and technology, it
is now possible to harvest more food per hectare than ever before in Africa’s
history. There are now improved crop and animal varieties that mature earlier,
require less resources, and are less susceptible to pest attacks, diseases and
drought. Across Africa, these improved varieties are increasing yields by as
much as 400%!
There are now improved and locally-adapted varieties of maize,
cassava, millet, rice, sorghum, beans, sweet potato, cowpea, groundnut,
soybean, pigeon pea, banana, durum wheat, and bread wheat.
There are also several local and international organisations that
are focused on supporting African farmers with improved seedlings and support.
One of such organisations is the Alliance for a Green Revolution in Africa
(AGRA), launched by the Rockefeller Foundation and the Bill & Melinda Gates
Foundation in 2006.
4. Agribusiness
is very scalable
You can start with what you have.
Whether you own one plot of land or 10,000 hectares, agribusiness is
one of few business opportunities that allow you to start on any scale, with
whatever you have!
Entrepreneurs like South Africa’s Anna Phosa started her agribusiness in 2008 in
her backyard with just four pigs. Today, she owns a 350-hectare pig farm and is
a major supplier to Pick n’ Pay, the South African supermarket chain.
The opportunity to start small means that people with little capital
can become part of Africa’s multi-billion dollar agribusiness industry. Because
of the guaranteed demand for agricultural produce, that small vegetable or
poultry farm in your backyard could just become a huge business tomorrow.
Every evidence shows that you don’t have to be a wealthy investor
with millions of dollars in the bank or a highly-educated person in order
to start a business in agriculture in Africa. You can start where you are and
use what you have, and grow from there. You can start your agribusiness journey
in your home backyard or do it on a part-time basis with your day job. It’s
very flexible that way!
5. Agribusiness
is a huge job creator
Agribusiness is one of the most effective ways to create jobs and
empower millions of Africans. At present, up to 60% of the labour force in
Sub-Saharan Africa is employed in the agribusiness industry. Agribusiness
remains a top employer of labour in many African countries.
The value chain in the agribusiness industry, from food production,
processing and marketing provide huge opportunities for employment and
entrepreneurship.
So, if you’re looking to start a business or invest in an industry
that makes a significant social impact, provides jobs and creates sustainable
wealth, agribusiness is surely the way to go!
Africa is
changing. You need to be part of this big dream that’s finally coming true!
Author Bio:
Mark-Anthony Johnson
CEO at JIC Holdings
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