The value of agribusiness on the African continent can still reach $1 trillion by 2030, but business leaders and experts in the sector expect a $45 billion annual investment to stimulate the required growth.
At the Africa Investment Forum last week, where project sponsors, borrowers, lenders and investors gathered to make deals on investment opportunities, the African Development Bank (AfDB) in a statement emphasised echoes of optimism that, with its vast agricultural potential, Africa’s agribusiness sector was still predicted to reach $1 trillion by 2030.
Agribusiness will become the ‘new oil’ on the continent, African Investment Forum participants said, fuelling the motor of inclusive growth.
The $1 trillion estimate first surfaced last year in the Africa Agriculture Status Report, released at the end of the African Green Revolution Forum (AGRF) in Cote d’Ivoire. It had emphasised that the power of entrepreneurs and the free market were driving Africa’s economic growth from food production, as businesses wake up to opportunities of a rapidly growing food market in Africa, which might be worth more than $1 trillion each year by 2030 to substitute imports with high value food made in Africa.
The emphasis, as BusinessDay previously reported, is however not just on crop production, but involvement of SMEs and other entrepreneurs in developing smart, innovative solutions to provide processing capabilities for the African food market.
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At the forum, some agribusiness leaders said there was 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, only $7 billion is invested in the sector. Investments from the private sector, the leaders said, will create the 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 AfDB noted.
“Agriculture is a key priority for the African Development Bank, through our Feed Africa strategy,” Jennifer Blanke, the AfDB vice president for Agriculture, Human and Social Development, said. “Understand that 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,” she said in her opening remarks at an Africa Investment Forum session titled, ‘Agribusiness: investment conversation with industry leaders.’
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, CEO, Dangote Group; Zainab Ahmed, Nigeria’s minister of finance; William Asiko, CEO, Grow Africa; John George Coumantaros, chairman, Flour Mills of Nigeria, and TP Nchocho, CEO, Land and Agricultural Bank of South Africa.
Agribusiness can also promote industrialisation and urban employment, break the ‘productivity gap’ of development, and improve the quality of life for all Africans, said attendees who reaffirmed Africa’s agricultural potential needs to be unlocked.
The AfDB’s statement also noted that 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. Zainab Ahmed, Nigeria’s minister of finance, urged investors and development partners to adapt their policies to accommodate more participants in the agriculture value chain.
