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Africa’s Agriculture and Agribusiness Markets Set to Top US$ One Trillion in 2030

Posted on 06 March 2013 by Africa Business

STORY HIGHLIGHTS
  • Africa has the potential to create a trillion-dollar food market
  • But farmers need better access to help them grow and trade their products
  • A new report outlines challenges and solutions to Africa’s Agriculture and Agribusiness sectors

WASHINGTON –A new World Bank report “Growing Africa: Unlocking the Potential of Agribusiness,” says that Africa’s farmers and agribusinesses could create a trillion-dollar food market by 2030 if they can expand their access to more capital, electricity, better technology and irrigated land to grow high-value nutritious foods.  The report calls on governments to work side-by-side with agribusinesses, to link farmers with consumers in an increasingly urbanized Africa.

“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.”

New Findings

Good prospects: Africa’s food and beverage markets are projected to reach $1 trillion by 2030. By way of comparison, the current size of the market is $313 billion, offering the prospect of a three-fold increase, bringing more jobs, greater prosperity, less hunger, and significantly more opportunity enabling African farmers to compete globally.

Performance boost needed: Africa’s agriculture and agribusinesses are underperforming.  Many developing countries such as Brazil, Indonesia, and Thailand now export more food products than all of Sub-Saharan Africa combined.  Even as export shares are falling, import of food products is rising.  The report argues that these adverse trends can be reversed through good policies, sustained public-private investment, and strong public-private partnerships backed by open, transparent procedures and processes along the entire value chain.

Untapped land and water: Africa has more than half of the world’s fertile yet unused land.  Africa uses only two percent of its renewable water resources compared to the global average of five 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.

While pointing to the need for significant investment in infrastructure the report carries an unequivocal warning: in the rush to allocate land for agribusiness, care needs to be taken so that acquisitions do not threaten people’s livelihoods and land purchases or leases are conducted according to ethical and socially responsible standards, including recognizing local users’ rights, holding consultations with local communities, and paying fair market-rate compensation for land acquired.

Adding Value

The report took an in-depth look at entire value chains – the process for taking products from farms to markets – for five commodities, rice, maize, cocoa, dairy and green beans.  Africa is the world’s leading importer and consumer of rice, paying US$3.5 billion for import bills. By increasing rice production, Senegal can help meet local demand but more capital is needed together with greater investment in irrigation and easing restrictions on access to land. Ghana, another top importer, produces more varieties of rice but at significantly higher cost.

“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.

Success Story

Although much of Eastern and Southern Africa is well suited to dairy production, only Kenya has established a competitive dairy industry. Kenya’s industry is based partly on a formal sector for processed milk and other dairy products, but its dynamic informal sector (based mostly on raw milk) is even more important, supplying over 80 percent of the market. Kenya’s success largely comes from the entrepreneurship of smallholders’ who choose high milk-yielding cross-bred cattle, improved feeds and paid better attention to animal health.  Also, Kenya success points to the importance of improving linkages to the formal sector through cooperative milk collection and milk cooling centers. Even though challenges remain government policy, especially flexibility in setting quality and safety standards for the informal chain were vital.

Looking Ahead

The report says agriculture and agribusiness should be at the top of the development and business agenda in Sub-Saharan Africa. Strong leadership and commitment from both public and private sectors is needed.  For success, engaging with strategic “good practice” investors is critical, as is the need for strengthening of safeguards, land administration systems, and screening investments for sustainable growth.  Concluding on an upbeat note, the report says Africa can draw on many local successes to guide governments and investors toward positive economic, social and environmental outcomes.

“African farmers and businesses must be empowered through good policies, increased public and private investments and strong public-private partnerships,” says Gaiv Tata, World Bank Director for Financial and Private Sector Development in Africa.  “A strong agribusiness sector is vital for Africa’s economic future.”

 

Source: WorldBank.org

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Les marchés alimentaires d’Afrique pourraient générer une opportunité de 1 000 milliards de dollars à l’horizon 2030

Posted on 06 March 2013 by Africa Business

Selon un nouveau rapport publié aujourd’hui par la Banque mondiale, les agriculteurs et le secteur agroalimentaire africains pourraient générer un marché de 1 000 milliards de dollars à l’horizon 2030, s’ils parvenaient à élargir leur accès à des fonds supplémentaires, à l’électricité, à une meilleure technologie et à des terres irriguées en vue d’y cultiver des aliments à haute valeur nutritionnelle et sous réserve que les gouvernements africains puissent travailler plus étroitement avec les exploitations agricoles afin de nourrir la population urbaine croissante de la région.

Selon le nouveau rapport – « Growing Africa: Unlocking the Potential of Agribusiness » (Croissance de l’Afrique : libérer le potentiel du secteur agroalimentaire), les systèmes alimentaires de l’Afrique, actuellement évalués à 313 milliards de dollars annuels à partir de l’agriculture, pourraient tripler si les gouvernements et les chefs d’entreprise procédaient à une refonte radicale de leurs politiques et de leur soutien au secteur, aux agriculteurs et aux exploitations agricoles, qui représentent ensemble près de 50 % de l’activité économique africaine.

« Le moment est venu de faire de l’agriculture et du secteur agro-alimentaire africains un catalyseur pour mettre fin à la pauvreté » déclare Makhtar Diop, vice-président de la Région Afrique de la Banque mondiale. « Nous ne pouvons pas exagérer l’importance revêtue par l’agriculture dans la détermination de l’Afrique à maintenir et à stimuler ses taux élevés de croissance, à créer plus d’emplois, à réduire de façon significative la pauvreté et à cultiver suffisamment de denrées alimentaires nutritives à bas prix pour nourrir ses familles et exporter ses récoltes excédentaires, tout en préservant l’environnement du continent ».

L’industrie agro-alimentaire offre de solides opportunités de croissance

Sous l’effet conjugué de la croissance démographique, de la hausse des revenus et de l’urbanisation, une forte demande oriente à la hausse les prix mondiaux des aliments et des produits agricoles. Les problèmes liés à l’approvisionnement ralentissant la progression du rendement des principales cultures vivrières, le fléchissement des dépenses de recherches, les défis posés par la dégradation des terres et la rareté de l’eau ainsi que le changement climatique, signifient tous que les prix se maintiendront à des niveaux élevés. Dans un tel contexte, l’Afrique dispose d’un potentiel considérable pour développer ses exportations alimentaires et agricoles.

L’Afrique détient pratiquement 50 % des terres mondiales non cultivées qui conviennent aux cultures vivrières, recensant jusqu’à 450 millions d’hectares non boisés, ni protégés, ni surpeuplés. L’Afrique utilise moins de 2 % de ses ressources renouvelables en eau, par rapport à une moyenne mondiale s’élevant à 5 %. Ses récoltes produisent systématiquement un volume nettement inférieur à leur potentiel  et l’importance des écarts de rendement peut atteindre de 60 à 80 % s’agissant des cultures de soutien, comme le maïs.  Les pertes après récoltes atteignent de 15 à 20 % pour les céréales et sont supérieures pour les produits périssables, en raison des mauvaises conditions de stockage et du manque d’infrastructures agricoles.

Les pays africains peuvent exploiter les marchés en plein essor du riz, du maïs, du soja, de l’huile de palme, des biocarburants ainsi que des matières biologiques et s’imposer parmi les principaux exportateurs de ces marchandises sur les marchés mondiaux, à l’instar des réussites de l’Amérique latine et de l’Asie du Sud-est. Concernant l’Afrique subsaharienne, les secteurs les plus dynamiques sont probablement le riz, les céréales fourragères, les volailles, les produits laitiers, les huiles végétales, l’horticulture et les aliments transformés pour approvisionner les marchés nationaux.

Le rapport met en garde sur les acquisitions de terres qui, bien que nécessaires pour les investissements du secteur agro-alimentaire, peuvent constituer une menace pour les moyens de subsistance des personnes et engendrer une opposition locale, à moins que les acquisitions ou fermages ne soient effectués selon des normes responsables sur les plans éthique et social, reconnaissant notamment les droits des utilisateurs locaux, résultant de consultations approfondies avec les communautés locales et incluant un dédommagement équitable respectant le prix du marché pour les terres acquises.

« L’amélioration de l’agriculture et du secteur de l’agroalimentaire africain signifie des recettes plus élevées et des emplois supplémentaires. Cela permet également à l’Afrique de se mesurer à la concurrence internationale. À ce jour, le Brésil, l’Indonésie et la Thaïlande exportent chacun plus de produits alimentaires que tous les pays de l’Afrique subsaharienne réunis. Cela doit changer », indique Jamal Saghir, Directeur du développement durable de la Banque mondiale pour la région de l’Afrique.

Les chaînes de valeurs sont fondamentales

Riz : l’Afrique est devenue un grand consommateur et importateur de riz. Les Africains importent la moitié du riz qu’ils consomment et le paient au prix fort, soit 3,5 milliards de dollars par an, voire plus. Le Ghana et le Sénégal sont deux importateurs de premier plan. Le Sénégal se montre compétitif parmi ses voisins, mais le pays souffre de  la difficulté qu’éprouvent les agriculteurs à accéder aux terres, aux capitaux et aux financements pour accroître l’irrigation et les variétés de cultures appropriées. Le Ghana produit moins de variétés de riz que le Sénégal, mais à un coût nettement plus élevé et prélève des droits de douane de 40 % ainsi que d’autres frais sur les importations. Le grain, la propreté et le conditionnement, étant tous de médiocre qualité, il s’agit de facteurs considérablement dissuasifs pour les consommateurs, ce qui freine le rendement du secteur.

Maïs : Il s’agit du produit alimentaire de base de nombreux Africains, et il est cultivé sur 25 millions d’hectares, soit 14 % des terres cultivées. En Zambie, dont la population consomme en moyenne 133 kilogrammes de céréales par an, le maïs fournit la moitié des calories de leur régime alimentaire. La Zambie se montre compétitive dans ses importations de maïs, mais ses exportations sont un échec. Des frais de transport élevés, des coûts de main-d’œuvre supérieurs et des rendements plus faibles s’associent pour accroître les coûts d’un tiers par rapport à la Thaïlande, gros producteur international de maïs pluvial. Le rapport fait valoir que la compétitivité à venir de la Zambie dépend de l’augmentation de ses rendements, de la réduction de ses coûts et de la suppression des mesures tendant à décourager le secteur privé sur les marchés et dans le commerce.

En outre, l’étude examine les chaînes de valeur du cacao au Ghana et celles des produits laitiers et des haricots verts au Kenya.

« Les entreprises et les agriculteurs africains doivent disposer de moyens pour agir, par le biais de bonnes politiques, d’investissements publics et privés accrus, et de solides partenariats publics-privés », affirme Gaiv Tata, directeur du Développement des secteurs privé et financier de la Banque mondiale en Afrique. « Disposer d’un solide secteur agro-alimentaire est vital pour l’avenir économique de l’Afrique. »

Solutions

L’agriculture et l’industrie agroalimentaire doivent figurer en tête du programme de développement économique de l’Afrique subsaharienne. Le rapport préconise une direction ferme et un engagement du   secteur public comme du secteur  privé. À titre de comparaison, le rapport cite l’exemple de l’Uruguay, de l’Indonésie et de la Malaisie. Pour réussir, l’engagement auprès d’investisseurs stratégiques respectant de « bonnes pratiques »  et mettant l’accent sur la croissance durable  est essentiel, de même que le renforcement des mesures de protection et des systèmes d’administration foncière.

Le rapport note que l’Afrique peut également s’appuyer sur les nombreuses réussites locales pour orienter les gouvernements et les investisseurs vers des résultats positifs sur les plans économique, social et environnemental.

 

Source: WorldBank.org

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Africa’s Food Markets Could Create One Trillion Dollar Opportunity by 2030

Posted on 06 March 2013 by Africa Business

WASHINGTON, March, 2013 - Africa’s farmers and agribusinesses could create a trillion-dollar food market by 2030 if they can expand their access to more capital, electricity, better technology and irrigated land to grow high-value nutritious foods, and if African governments can work more closely with agribusinesses to feed the region’s fast-growing urban population, according to a new World Bank report launched today.

According to the Growing Africa: Unlocking the Potential of Agribusiness report, 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.”

Agribusiness: strong growth opportunities

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 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.

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.

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.

Value Chains are essential

Rice: Africa has become a major consumer and importer of rice, and Africans import half the rice they eat and pay top dollar for it, $3.5 billion per year and more.  Ghana and Senegal are significant importers.  Senegal is competitive among its neighbors, but it is held back by the difficulty farmers have in accessing land, capital, finance for irrigation expansion and appropriate crop varieties.  Ghana produces fewer varieties of rice than Senegal, but at significantly higher cost, and levies 40 percent tariffs and other charges on imports. Poor grain quality, cleanliness and packaging are major deterrents for consumers constraining the sector’s performance.

Maize: A food staple for many Africans, maize is grown on 25 million hectares or 14 percent of cropped land. In Zambia where people eat on average 133 kilograms of cereals a year, maize provides half the calories in their diets.  Zambia is competitive when importing maize but fails on exports.  High transport costs, higher labor costs and lower yields combine to increase costs by one-third compared to Thailand, a major international producer of rain-fed maize.  The report argues that Zambia’s future competitiveness depends on raising yields, reducing costs, and removing disincentives for the private sector in markets and trade.

In addition, the study reviewed value chains for cocoa in Ghana and dairy and green beans in Kenya.

African farmers and businesses must be empowered through good policies, increased public and private investments and strong public-private partnerships,” says Gaiv Tata, World Bank Director for Financial and Private Sector Development in Africa.  “A strong agribusiness sector is vital for Africa’s economic future.”

Solutions

Agriculture and agribusiness should be at the top of the development and business agenda in Sub-Saharan Africa. The report calls for strong leadership and commitment for both public and private sectors.  As comparators, the report cites case studies from Uruguay, Indonesia and Malaysia. For success, engaging with strategic “good practice” investors is critical, as is the strengthening of safeguards, land administration systems, and screening investments for sustainable growth.

The report notes that Africa can also draw on many local successes to guide governments and investors toward positive economic, social and environmental outcomes.

 

Source: WorldBank.org

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Africa’s Food Markets Could Create One Trillion Dollar Opportunity by 2030

Posted on 04 March 2013 by Africa Business

WASHINGTON, March 4, 2013/African Press Organization (APO)/ — Africa’s farmers and agribusinesses could create a trillion-dollar food market by 2030 if they can expand their access to more capital, electricity, better technology and irrigated land to grow high-value nutritious foods, and if African governments can work more closely with agribusinesses to feed the region’s fast-growing urban population, according to a new World Bank report launched today.

 

According to the Growing Africa: Unlocking the Potential of Agribusinessreport, 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.”

 

Agribusiness: strong growth opportunities

 

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 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.

 

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.

 

“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.

 

Value Chains are essential

 

Rice: Africa has become a major consumer and importer of rice, and Africans import half the rice they eat and pay top dollar for it, $3.5 billion per year and more. Ghana and Senegal are significant importers. Senegal is competitive among its neighbors, but it is held back by the difficulty farmers have in accessing land, capital, finance for irrigation expansion and appropriate crop varieties. Ghana produces fewer varieties of rice than Senegal, but at significantly higher cost, and levies 40 percent tariffs and other charges on imports. Poor grain quality, cleanliness and packaging are major deterrents for consumers constraining the sector’s performance.

 

Maize: A food staple for many Africans, maize is grown on 25 million hectares or 14 percent of cropped land. In Zambia where people eat on average 133 kilograms of cereals a year, maize provides half the calories in their diets. Zambia is competitive when importing maize but fails on exports. High transport costs, higher labor costs and lower yields combine to increase costs by one-third compared to Thailand, a major international producer of rain-fed maize. The report argues that Zambia’s future competitiveness depends on raising yields, reducing costs, and removing disincentives for the private sector in markets and trade.

 

In addition, the study reviewed value chains for cocoa in Ghana and dairy and green beans in Kenya.

 

“African farmers and businesses must be empowered through good policies, increased public and private investments and strong public-private partnerships,” says Gaiv Tata, World Bank Director for Financial and Private Sector Development in Africa. “A strong agribusiness sector is vital for Africa’s economic future.”

 

Solutions

 

Agriculture and agribusiness should be at the top of the development and business agenda in Sub-Saharan Africa. The report calls for strong leadership and commitment for both public and private sectors. As comparators, the report cites case studies from Uruguay, Indonesia and Malaysia. For success, engaging with strategic “good practice” investors is critical, as is the strengthening of safeguards, land administration systems, and screening investments for sustainable growth.

 

The report notes that Africa can also draw on many local successes to guide governments and investors toward positive economic, social and environmental outcomes.

 

SOURCE

The World Bank

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