Agribusiness can grow threefold
Charles Brewer, Managing Director of DHL Express Sub-Saharan Africa said that one particular sector which has seen significant growth in Africa is agribusiness, which entails the full value chain from agricultural production and farming through secondary processing, distribution and retailing to the end user/consumer (farm-to-fork concept). “The retail sector is booming in Africa, as is the rapid growth of populations and the African middle class. As a result of this expansion, there is a greater availability of and demand for good quality agricultural produce and processed food products than ever before.”
He cited to the recent report by World Bank – Growing Africa: Unlocking the Potential of Agribusiness – which revealed that Africa’s farmers and agribusinesses could create a trillion-dollar food market by 2030 – a three-fold increase from the current size of the market which is estimated to be worth US$313 billion.
“This expected growth highlights the growing market and many opportunities for agribusiness in southern Africa and related value chain role players to expand into Africa,” said Brewer. According to Hennie van der Merwe, CEO of the Agribusiness Development Corporation (ADC), based in South Africa, Africa provides a new market for agribusiness firms.
“Given its increased spending power, demand for goods and untapped land resources, Africa is currently experiencing a revival in terms of its focus on agribusiness, not only to increase food self-sufficiency, but also to create jobs and economic activity, specifically in rural areas,” said van der Merwe.
“In the current climate, Africa is increasingly offering greater growth forecasts,” he noted. However, while Africa is well-endowed with resources, it often lacks much of the necessary expertise to unlock the commercial potential of its agriculture resources. The only exception is South Africa is with its expertise in commercial farming and agribusiness.
“One of the major limitations on agribusiness development in Africa is human capacity and human skills constraint.
The ability and experience to develop and manage commercial farming and agribusiness ventures are largely lacking in the African environment and that major technology transfer and capacity building would be necessary in this regard.” He said this is where the opportunity lies for local businesses and farmers to expand beyond their borders and offer expertise in neighbouring countries.