Agriculture in Africa – All You Need To Know

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No Farmers, No Food, No Future

With the largely uncultivated land that covers over half of the continent, tropical climates that permit long farming seasons as well as a variety of crops, a booming labour force and an increasing population that provides a ready market for produce consumption, one would imagine that Africa would be brimming with food.

Sadly, African countries are yet to harness these opportunities as statistics show that millions of people experience chronic hunger. In East Africa alone, 28 million people need humanitarian assistance.

Clearly, there is a need to explore the untapped potentials to ensure sustainable food production, distribution and security.

WHY AGRICULTURE?

“The agricultural transformation that Africa needs today has to be much more focused on a market driven, business agenda that encompasses the entire food system, not just agricultural production”(Peter B. R. Hazell, Africa Agriculture Status Report)

Over 60% of Africa’s populace live below the poverty line and the other part that eat depend to a large extent on imported food (produced or processed abroad).

Agro processing has been identified as a key element in the agribusiness value chain as stakeholders opine that as a promising foreign exchange earner, processing agro foods and other non-oil products for export is the way to go.

INVESTMENT OPPORTUNITIES

Farm input production

In order to increase the amount of food produced and quality of yield, there are certain products permitted for use. These include feedstuffs, fertilizers and certain plant protection products.

With the goal being mechanized farming for both local use and exports, having these products greatly influence the outcome. What currently obtains is that, farmers are operating with little or no intervention from these products.

When it is made readily available via public-private partnerships, the same portion of land will optimally produce crops with bountiful harvest.

The farmers will then have enough resources to invest in growing their business and seek further expansion.

It’s the little things they say, that make the big changes.

Large scale farming

This has been hampered largely by market uncertainty.

Even though some farms have the capacity to produce more food, they are not sure if they’d be able to sell them as some large harvests lead to wastage and food spoilage when the food crops are not sold.

This is especially true for fresh food products such as tomatoes, peppers, fruits and vegetables in general.

When there is adequate investment in the entire agricultural value chain, there will be storage facilities for these products and processing options to ensure that value is being gotten even months after harvest.

Access to funding will also make it easy for African farmers to operate on a large scale, make use of the latest technology and harvest healthy crops and livestock all year round.

Farm produce processing

Most of the farm products produced in Africa are either consumed locally or exported raw for onward processing. Setting up a processing plant for most of these crops would be the next logical step for Agriculture in Africa.

That is, processing of agricultural products presents a variety of attractive investment and job opportunities that could trigger sufficient food production for local consumption, and export potential thereby creating wealth for millions of Africans and investors alike.

A good example of this is the Africa JUICE, an Ethiopia-based vertically integrated grower and processor of tropical fruit juice

The identified investment opportunities in the agricultural value chain in Africa include fresh fruits processing, foodstuff retailing or grocery service, fish farming, herbs, flowers framing and gardening, livestock feed production, poultry farm, mushroom farming, frozen chicken production, and grass-cutter farming, snail farming, coconut juice production, beekeeping and honey production, plantain chips production, custard manufacturing, fruit juice or jam production, groundnut processing, cashew nut processing, soya beans processing, spices production, dairy products, vegetable farming.

The opportunities are endless as each item has the ability to yield more than one end product after processing.

Veterinary Services

This is the aspect of agriculture that overlaps with medical tourism. The professional care of livestock and domestic animals is especially essential to the production of a healthy livestock.

This could be preventive or curative. Having access to the appropriate vaccines, booster vitamins and having adequate medicine available will contribute to a robust economy based on livestock.

This is important because outbreaks can occur without warning and if there’s no system set up to examine, evaluate and treat affected livestock, there would be a serious sickness and/or death of animals, stunted growth in some cases and a colossal loss of funds invested in rearing the livestock.

Most of the veterinary service providers in Africa at the moment are either under-equipped or under-staffed.

And many still use outdated methods in examination and treatment of livestock. Adequate investment in training veterinary personnel and providing new and standard equipment will make their job of caring for livestock more efficient.

Farm produce marketing

Marketing the farm products remain the largest area of need of Agriculture in Africa. And when you create a solution to a problem, you can be profitable.

Since the urban areas need fresh food produce, there is room for the creation of a robust marketing system that does three things:

– buys these crops from the farmers

– stores them to retain their freshness

–  connects to the appropriate export links for shipping.

There are businesses who already are into the export business. Creating the communication channel between them and the farmers will ensure that the crops grown with export value get sold. This includes crops like ginger, cocoa, coffee, etc

And there are some tech businesses that have developed apps to aid this process like the Verdantapp. Their app helps provide agricultural information that will save time and money for farmers, agribusinesses and cooperatives. They bring together the entire value chain from input providers to extension to financial services too.

Agricultural extension services

Extension services refer to a wide range of supportive programs that exist around a farmer—from trainings to market linkages to technology transfer schemes. Historically, such programs have been government-led, and in Africa underfunded, and therefore ineffective throughout much of the continent.

But the effect of what little effort there is, can be seen.

Across the continent in Ethiopia, the country’s Ministry of Agriculture and its Agricultural Transformation Agency (ATA), established in 2010, have also developed several initiatives to increase farmer productivity – especially for several “priority” crops targeted by the government. And while these programs use traditional extension service methods, like inperson trainings, the Agency also makes smart use of technology. In 2014, for example, the Agency launched a hotline for farmers to call for agricultural advice and crop-specific tutorials. The free, voice-based hotline (which is available in 3 of the country’s major languages) makes sense in a country in which literacy rates are very low, as is access to the internet. According to a recent report, the service has been well received, having registered one million callers in its first year of operation. If private investors can venture into providing such services, even at a cost, it would go a long way to increase productivity in this sector of the continent.

PROBLEMS/CHALLENGES OF AGRICULTURE IN AFRICA

We are continually faced by great opportunities brilliantly disguised as insoluble problems. – Lee Iacocca

Here’s an alarming truth – Over 50% of Africa’s land mass is still uncultivated and fertile yet the figure of its starving citizens is alarmingly increasing! What could be the cause?

Ignorance

Most of the young, educated people in Africa are in the urban areas pursuing white-collar jobs and have left the burden of agriculture to the aged and less educated. When sensitization programs and education is carried out extensively, Africa will be able to utilise the knowledge of these University trained youths to introduce farming methods and techniques that will foster productivity.

Funding

Most African farmers remain peasant as a result of poverty. When there’s adequate funding or at least access to interest-free loans, farmers would be able to grow their farms optimally.

Investment houses and commercial platforms can set up funding mechanisms that will be mutually beneficial and nurture the growth and expansion of Agriculture in Africa.

Transportation & Marketing

After successfully cultivating, tending and harvesting crops, one challenge that farmers encounter is that of adequate transportation to where the demand for their goods are.

Spoilage occurs most times, in transit.

Investing in haulage vehicles and specialized motors for transporting food products will be a welcome development.

Also there is the possibility of investing in alternative source of transportation.

The railway system will be excellent as a more affordable way of transporting food and livestock with minimal risk of accidents and spoilage.

Drought

Combating drought in many parts of Africa has been mainly by irrigation and manual watering of crops.

More can be done via creation of green houses and other modern way of growing crops in a controlled environment.

This expands the planting possibilities of the different regions because there’s no more barriers as to what can be planted or not. The crops grow and flourish in a condition that is best for them without suffering the harsh effects of the soil and weather conditions.

AGENCIES SUPPORTING AGRICULTURE

Recently, a number of agencies have supported and continue to promote agriculture in Africa. Their areas of assistance range from funding to the provision of extensive knowledge, inputs and improved seed varieties.

Among many, there are organizations like; SEED Foundation (www.funds forngos.org), AGRA (agra.org), Nippon foundation (www.nippom-foundation.or.jp), LAFCo and the rest.

Particularly, organizations providing funds for agricultural purposes include Lending for Africa farming (www.lendingforafricanfarming.com, Agriculture fast track AFT (www.afdb.org) etc.

NEED A GUIDE?

At Footprint to Africa Investor Service, we act as a bridge between global investors, African business owners and government agencies. We help intra African and foreign investors find the right partners and opportunities, form joint ventures or partnerships, and to establish presence through public private partnership (PPP).

Contact Us Today!

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