Experts reveal nine agribusiness and food opportunities in Africa
Africa’s agribusiness and food sector presents significant commercial opportunities.
Africa’s agribusiness and food sector present significant commercial opportunities. The continent’s population of over 1.3 billion is rapidly urbanising, boosting demand for processed and packaged foods. In addition to catering for locals, businesspeople can leverage the continent’s agricultural resources to produce food products for international markets.
Here are nine agribusiness and food opportunities highlighted by entrepreneurs and investors.
1. Namibia is big and sparsely populated which means imported goods must be transported over vast distances. This drives up the cost of these products. According to Ekkehard Friedrich, partner at private equity firm Eos Capital, opportunities exist for local production of perishable crops in Namibia. “Any goods that are not easily or economically transported lend themselves quite well to local production … Namibia is traditionally a net importer and perishable goods are particularly expensive due to high transportation costs.There is significant and growing global demand for avocados and macadamia nuts.According to Mira Mehta, founder and CEO of Tomato Jos (a Nigerian operation farming tomatoes for processing into tomato paste), one of their biggest headaches is the maintenance of equipment. Because of a shortage of parts, tractors are sometimes out of commission for weeks.Replacing these imported products with locally produced goods presents a significant opportunity, according to Saad Aouad, CIO of 54 Capital. He is particularly upbeat about producing basic food products such as edible oils, pasta and dairy.The process to distil the jelly from a by-product of the crude oil refining process was patented in 1872 by Robert Chesebrough, a chemist in the US. However, Zimbabwe-based entrepreneur Gus Le Breton believes an opportunity exists to grab market share by providing a natural and sustainable alternative to petroleum jelly. “We can make a similar product from mongongo nut oil, marula nut oil, baobab seed oil, etc. It is natural, locally made and doesn’t use any imported ingredients. It is beautiful,” he says.He believes poultry is the future of protein production in Africa. “I see big opportunities in poultry … Chicken is just so much more affordable than beef.The urbanised public is slowly but surely realising the value of camel milk, which is beneficial for lactose-intolerant consumers and has less cholesterol.Sub-Saharan Africa cultivates many fruit crops which can be dried for the export market. While entrepreneur Jaco le Roux, founder of Mozambique-based AfriFruta, has built a viable dried fruit business, he says the industry is more complex than many assume. Much of the fruit grown in Africa is not the correct cultivar for drying. For instance, many types of mango are not suitable because they are too fibrous for European consumers’ tastes. A viable fruit-drying business also requires scale; international buyers are not interested in purchasing small quantities. It can take up to 15 tonnes of fresh mangoes to obtain one tonne of dried fruit.It is also one of the continent’s least industrialised. Cassava roots can be processed into various products: cassava flour, starch, ethanol and glucose syrup. The crop is also gluten-free which opens up opportunities in the health and wellness market. The reasons for the low levels of processing is because the skin of the root contains cyanide; once the root has been removed from the ground, it must be processed (or at least peeled) within 48 hours, before the skin starts to poison the rest of the crop. Poor transport infrastructure also makes it difficult to get harvested cassava from small-scale rural farmers to factories in time. PhilAfrica has overcome these challenges with a mobile cassava processing facility that travels to where the crop is grown. A handful of other businesses are also taking advantage of cassava’s potential: Faso Attiéké makes fresh and dried cassava couscous in Burkina Faso, and Gabon’s Tuber’Chips has introduced flavoured cassava crisps.