Agribusinesses to shift from importing to self sufficiency
In November 2019, the African Agri Council (AAC) held the fourth edition of the African Agri Investment Indaba (AAII), hosted by the South African Government, the Western Cape Government and Wesgro in Cape Town. Throughout the sessions, there was broad agreement that, despite certain regulatory challenges, for an immense potential for investment in African food and agriculture.
Specific panels in the keynote touched on current political reforms, the economic and digital revolution in food and agriculture with one goal in mind; how to boost transactional discussions that will result in business expansion, capital flow and FDI. Agribusinesses are being challenged to meet the globally increasing demand for food, fuel and fibre; while balancing economic and environmental realities. Agribusiness is evolving from a local and regional model to a global structure, making this sector of increasing interest to corporations, public agencies, and society at large – with the right expertise, investment and policies, Africa can evolve and curb the current annual food import bill of $35 billion, which is estimated to rise to $110 billion by 2025.
Panellists in the keynote and the AgTech Summit looked at the impact of new technologies in the industry collective effort to increase efficiency and cut costs. The global AgTech market attracted $16.9 billion of investments in 2018, and the growth in investment activity has greatly increased the speed of AgTech innovation in Africa; for example in 2017 the Bill and Melinda Gates Foundation signed a deal with the EU to invest over $600 million in agricultural innovation in African and South Asian countries, 82 AgTech startups were in operation across Africa by the start of 2018 with 110% growth in start-ups operating in the market since 2016 reported by Disrupt Africa and in 2019 over 280 ventures reported on the continent with an increased focus on ‘homegrown’ specific market related solutions. However, we cannot discuss the business of agriculture in Africa without smallholders, therefore government regulation, historical practices, and poor training have slowed technology adoption on the continent.
There was an overwhelming feeling among delegates that Africa should now focus on a shift from import dependence to self sufficiency, therefore the Indaba co-located events – which included FAO Agri-Invest Roundtable, African Development Bank (AfDB) Investment Masterclass, Grow Africa Development of Regional Agro Dealer Network in Southern Africa Workshop, AgTech Investment Summit, Agro-processing and Retail Masterclass, Commodity Value Chain Masterclass and Future Markets and the Future of Food Masterclass – offered a real opportunity for participants to align themselves with institutions such as the FAO, AfDB and Grow Africa/NEPAD, while addressing areas that should deliver meaningful impact to the development of African agriculture.
Furthermore, at the heart of African Agri Investment Indaba (AAII) 2019 were the Closed Sessions and Investment Discovery Sessions (IDS). AAII Closed Sessions were by-invitation-only with privately-held meetings between investors, selected agribusinesses, financial institutions and government officials. The Investment Discovery Sessions hosted both medium and large scale commercial businesses, namely; food hubs / market precinct solution by ZAMBIA Fresh Lusaka Market (ZLM), processing factories: raisin drying, paste and syrup, peach drying, pecan cracking, vine leaf harvesting by Redsun Raisins, Citrusdal Upper Olifants Dam options and Olifantsriver system by Citrusdal Water Users Association, Mozambique citrus and mango processing project by Moriah Fruit and Lesotho Project by Stargrow.
The future of food in the world will depend on what Africa achieves in agriculture said Dr Akinwumi Adesina, president of the African Development Bank (AfDB), which is imperative why it needs to be at the top of the global food security agenda. AAII is certainly at the top of the global food and agriculture community agenda – a ‘must attend’ event that provides a voice for bankable agribusiness opportunities; to promote Africa as a business and investment destination; drive transactional discussions and profile traditional financial and investment offerings; and those challenging the status quo to meet the complex requirements of the African investment landscape that is more often dominated by risk rather than returns.