Last year, AGRA noted that African agriculture could hit $1 trillion by 2030 from then $313 billion. The report was based on a World Bank research [this report has $313 billion, not $300 that AGRA used]. By comparison, the 2017 GDP of Africa was around $2.2. trillion (nominal).
Most indications are that we are ready for take-off. The prospects for African agriculture looks favorable, despite the recent slowing in economic growth across much of the continent mainly due to the sharp drop in the global prices of oil and minerals. The African food market continues to grow with World Bank estimates showing that it will be worth US$1 trillion by 2030 up from the current US$300 billion. Demand for food is also projected to at least double by 2050. These trends, combined with the continent’s food import bill, estimated at a staggering US$30–50 billion, indicate that an opportunity exists for smallholder farmers—Africa’s largest entrepreneurs by numbers—who already produce 80% of the food we eat to finally transition their enterprises into thriving businesses..
The African Development Bank returned to the same number – $1 trillion– in this year’s meeting in Korea. Indeed, Africa is entering a golden era of agricultural production where technology will drive productivity. We expect continuous improvement in crop yield over the next few years. Everyone knows that fixing agriculture will fix Africa because more than 65% of Africa’s working population is employed in agriculture. So, it has the most catalytic impacts possible in raising millions of people out of poverty.
The African Development Bank (AfDB) yseterday call on African governments to create the right environment for the private sector to lead the continent’s industrial revolution.
“We cannot say we have leadership when we still have 65 per cent of the land in Africa uncultivated. We must develop solutions to agriculture and ensure that the sector can grow to a $1-trillion business,” its President, Akinwumi Adesina, said.
Unlocking Opportunities in African Agriculture
I do believe that we would reach $1 trillion before 2025 with the pace of incremental innovation in the sector. The disruptive innovation is not anywhere around because critical infrastructures like electricity and storage facilities that would enable such are not readily available yet. Nonetheless, African agriculture is getting the attention of many people in the continent at the moment.Here are ways entrepreneurs can play in the sector:
- Precision agriculture by making sensors: here, you make electronic sensors; may be a little hard depending on your skill level
- Agriculture insurance technology: making insurance products geared for farming
- Agro lending technology: delivering capital to farmers at scale supported by technology
- Agro financing – investing in farmers and farms through digital aggregators
- Direct Farming: owning farms and growing crops and/or raising farm animals
- Farming ecommerce: expanding farmers’ markets by providing digital platforms for trade
- Pricing aggregation: facilitating trading through provision of produce price data
- Storage: African farmers struggle with storage of produce. Building solutions in this area will be catalytic
- Logistics: there is a huge opportunity to facilitate the delivery of produce from rural areas to urban areas across Africa with our poor road networks
- Digitization of transactions: from payment to tracing origins of produce, we have a huge need to digitize farming systems in Africa
- Commodity trading: building exchanges for trading commodities
- Farm digitization: most farms must be digitized for them to be tech-ready
- Others: there are opportunities like making digital tools farmers can use. These could include farm diary, mapping solutions, etc
Note: depending on your skill level and areas of capabilities, you may need partners in executing some of the ideas.
This race to $1 trillion is clear – if you fix agriculture, you would fix most problems in Africa. According to McKinsey, a consultancy, African agriculture was worth $100 billion about eight years ago. Now, it has hit about $400 billion meaning that we are on the right track but still have a lot of work to do. Agriculture and the capacity to feed Africa would drive the expected productivity we desire in the continent.
Simple Math, eliminate poverty to increase productivity. When you eliminate the fear of what to eat, the human mind works better. Nigeria needs two major inputs – money and ideas – if we want to create wealth.