Posted on :Monday , 18th November 2019
Africa is currently the second most populous continent in the world, its current population is 1.2 billion. This growing population of Africa could reach 2 billion by 2030 and 2.5 billion by 2050 as per the United Nations projections. This shows that one in five consumers globally will be African.
Africaâ€™s agribusiness sector is expected to reach $1 trillion by 2030, so there is certainly cause for optimism. Consumer demand for food in Africa is growing at an exceptional rate.
After population there comes quality counts. Sustained GDP growth rates in several countries across the continent have translated into rising incomes for some segments of the population. As per the report, by African Development Bankâ€™s African Economic Outlook, the middle-class population is expected to reach 1.1 billion by 2060 which will reach 42% of the population.
The average African middle-class consumer is becoming relatively more wealthy, sophisticated and discerning in the food they choose to buy and eat. Concerns about price/quality trade-offs, convenience, nutritional content, and food safety, amongst others, are central in their minds.
The next is powerful. Even though most growth poles are small to medium cities, megacities with populations of over 10 million inhabitants, such as Cairo, Lagos, and Kinshasa, have gained increased fame. These metro-poles offer great opportunities for investment, as a result of more urbanization of high consumption, concentrated spending power.
On the supply side, there is significant untapped potential. Over 60% of the worldâ€™s uncultivated arable land is in Africa.
By realizing the huge opportunities the African Development Bank is at the forefront of this coalition of the â€œreadyâ€ to transform African agriculture. Under its Feed Africa Strategy, the Bank is supporting its regional member countries to address both demand and supply-side constraints along agricultural value chains.
Through initiatives like the Technologies for African Agricultural Transformation (TAAT), the Bank is boosting historically low yields in priority commodities such as rice, maize, and soybeans. In Sudan for example, the TAAT-supported heat-resistant wheat variety has increased wheat self-sufficiency from 24% in 2016 to 45% in the 2018-2019 farming season.
On the other hand, Special Agro-Processing Zones (SAPZs) are attracting both hard and soft infrastructure and creating value addition to increased agricultural produce. Together with partners, including Korea-Exim Bank and the European Investment Bank, the African Development Bank has invested $120 million in SAPZs in Guinea, Ethiopia and Togo, which will significantly expand local agro-processing activities along numerous agricultural value chains.
Along with these key investments in Africaâ€™s agricultural value chains, the continent is starting to consolidate its wins. A case in point is regional integration, exemplified by the recent ratification of the African Continental Free Trade Area (ACFTA), which has the potential to make Africa the largest free trade area in the world.
Agribusiness has already caught the eye of investors. Last year, it was one of the main attractions at the inaugural Africa Investment Forum conference, which is becoming the continentâ€™s premier marketplace for global and pan-African business leaders, and an innovator in accelerating deals.