Africa holds key to trillion dollar food market, World Bank says

Farmers in Africa can create a trillion-dollar food market by 2030 if they expanded their access to more capital, better technology, irrigated land and grow high-value nutritious foods says a World Bank report.

The report dubbed Growing Africa: Unlocking the Potential of Agribusiness report in Africa says  Africa’s food systems, currently valued at US$313 billion a year from agriculture, could triple if governments and business leaders radically rethink their policies and support to agriculture, farmers, and agribusinesses, which together account for nearly 50 percent of Africa’s economic activity.

“The time has come for making African agriculture and agribusiness a catalyst for ending poverty,” says Makhtar Diop, World Bank Vice President for Africa Region. “We cannot overstate the importance of agriculture to Africa’s determination to maintain and boost its high growth rates, create more jobs, significantly reduce poverty, and grow enough cheap, nutritious food to feed its families, export its surplus crops, while safeguarding the continent’s environment.”

Due to a combination of population growth, rising incomes and urbanization, strong demand is driving global food and agricultural prices higher.  Supply issues – slowing yield growth of major food crops, slowdown in research spending, land degradation and water scarcity issues, and a changing climate all mean that prices will remain high.  In this new market climate, Africa has great potential for expanding its food and agricultural exports.

Africa holds almost 50 percent of the world’s uncultivated land which is suited for growing food crops, comprising as many as 450 million hectares that are not forested, protected, or densely populated. Africa uses less than 2 percent of its renewable water sources, compared to a world average of five percent. Its harvests routinely yield far less than their potential and, for mainstay food crops such as maize the yield gap is as wide as 60 to 80 percent. Post-harvest losses run 15 to 20 percent for cereals and are higher for perishable products due to poor storage and other farm infrastructure. 

African countries, the report further says, can tap into booming markets in rice, maize, soybeans, sugar, palm oil, biofuel and feedstock and emerge as major exporters of these commodities on world markets similar to the successes scored by Latin America and Southeast Asia.  For Sub-Saharan Africa, the most dynamic sectors are likely to be rice, feed grains, poultry, dairy, vegetable oils, horticulture and processed foods to supply domestic markets.  “Improving Africa’s agriculture and agribusiness sectors means higher incomes and more jobs. It also allows Africa to compete globally.

Today, Brazil, Indonesia and Thailand each export more food products than all of sub-Saharan Africa combined.  This must change,” says Jamal Saghir, World Bank Director for Sustainable Development in the Africa Region.
The report cautions that even as land will be needed for some agribusiness investments, such acquisitions can threaten people’s livelihoods and create local opposition unless land purchases or leases are conducted according to ethical and socially responsible standards, including recognizing local users’ rights, thorough consultations with local communities, and fair market-rate compensation for land acquired.

The report corroborates a previous study by FAO that said that even with Sub-Saharan Africa being among the leading regions in hunger and drought, it could become among the more productive agricultural regions of the globe and eventually the breadbasket of the world, if primed.
The report is testament to a breed of emerging agropreneurs in Kenya who have either invested in modern irrigation methods or are involved in planting of high yielding crops that have turned them to overnight millionaires. Such crops like yellow passion fruits, red pawpaws and tissue culture bananas , which are high yielding and disease resistant, are enjoying a brisk market both locally and internationally a factor that explains the benefits the farmers are enjoying.

Written by Bob Koigi for African Laughter