News / Africa

    Foreign Investors See Potential in African Agriculture

    Specialists say good governance and improved infrastructure could provide a boost to the sector

    Part 2 of a 5 Part Series: Investment in Africa

    Agriculture is one of the most important economic activities in Africa.  In addition to providing employment, agriculture has the potential to transform African societies through the increased export of produce to Western markets.

    Many agree that transformation will not take place without increased investment in agriculture, including public or private loans to small farmers.  Statistics show that Africa has about 12% of the world’s arable land but 80% of it is not in use. Observers say there are many opportunities to develop land and even make it attractive to agribusinesses.

    The Kenyan story

    Among those taking advantage of new opportunities are Kenyan farmers, including some who are now making millions of dollars exporting flowers.

    According to the International Food Policy Research Institute, horticulture has become the third largest source of foreign exchange in Kenya after tourism and tea.

    But statistics show that farming in Kenya is still typically carried out by small farmers who usually cultivate no more than two hectares.

    Adieno Achieng is a small scale farmer in Kisumu.  She says government can support farmers like herself by subsidizing farm inputs like fertilizers and seeds. She says that farmers would also benefit from access to agricultural loans.

    Investment in small farmers

    But in recent years,  government assistance to small farmers and to agriculture in general has been in decline.

    Mohammed Beavogui is the director of the Western & Central Africa Division of International Fund for Agricultural Development (IFAD) in Rome, Italy.

    He says even international development aid meant for agriculture “dropped from 20% to 4%...”
    But he says that there are signs to show that this trend is changing because of the rise in food prices internationally.  “People complain of food prices, but for agriculture somewhere, it is an opportunity,” he says.

    Leaders from many developing countries are also recognizing the need to invest in their own food security.

    At the 2009 G8 Summit in L’Aquila, Italy, donors collectively committed $20 billion to agricultural development and a new approach to global food security.

    Beavogui says, “The share of agriculture in development is increasing….  For example, my institution, the International Fund for Agricultural Development, got an increase of almost 50 percent of its replenishment to support agricultural projects….  All these are showing that there is an effort to invest in agriculture,” he says.

    He says productivity in Africa has a long way to go to catch up with counterparts in developing nations in Asia.  “We still have to introduce new seeds…new technology,  and fertilizer…”

    Improved Infrastructure Needed

    Also needed, say development specialists are improved ways to take goods to market.

    “If you want agriculture to work you need to allow agricultural products to get to the market, and that means you need roads,” Beavogui says.

    The decision to invest in local agriculture often depends on a region’s ability to move goods from the farm to the factories or to ports for export.

    Statistics indicate that only 34% of sub-Saharan Africa’s rural population lives within two kilometers of a paved road.         In most of Africa, poor road infrastructure accounts for investors deciding to look elsewhere.  “Every fifth African needs at least five hours to get to the nearest market….” Beavogui says.

    Economists point to Malawi, which earns up to 70 percent of its foreign exchange from tobacco.  Most of it is grown in the rural areas, where farmers have to transport the crop many miles to the commercial capital, Blantyre.

    Foreign Investment

    There are some signs that local and western investors are slowly attracting interest in African agricultural potential.  The best example is the African Agricultural Land Fund, a private equity strategy that seeks to invest in food production across sub-Saharan Africa.

    EmVest Asset Management is a joint venture between GrainVest South Africa and Emergent Asset Management of Britain.  EmVest is managed by people with an active interest in African agriculture.  GrainVest is a South African firm that is active throughout the agriculture production chain, including crops, maize milling and futures trading.

    Patrick Devenish is the CEO of agro-industrial conglomerate AICO Africa, Ltd., incorporated in Zimbabwe.  He was recently in the United States to network with other African CEOs in New York.

    He says that AICO has invested heavily in African agriculture and the returns have been good. In Zimbabwe, the company is involved in buying and seed cotton, from which it makes and sells cotton lint.

    Devenish says the agricultural sector in Africa is a particularly under-targeted area that offers great returns for any western investor.  He’d also like to see US companies provide a market for African agricultural exports.  “We would like to see a demand pull rather than push,” he says. Government has a role to play in attracting investment, Devenish says.

    “We would like to see a government focusing on providing an environment for conducive to business rather than getting directly involved in the business….   There are government interventions that have made life difficult.”

    That includes Zimbabwe, he says, where the government confiscated the farms of once-successful farmers.

    AICO Africa Ltd. has been providing financing to small-scale cotton farmers, says Devenish, because “the average small farmer in Zimbabwe doesn’t have access to [it]….”

    Mohammed Beavogui of IFAD Beavogui says another project sponsored by Kofi Annan’s NGO,  the Alliance for a Green Revolution in Africa (AGRA), is developing a “breadbasket approach” to coordinate agricultural development efforts in a Ghana.  The plan will add up to US $500m to the agricultural component of GDP, create up to 15,000 new jobs and double the household incomes of close to 250,000 smallholders.

    Meanwhile, a company called Africa Finance Corporation (AFC), which serves West Africa is helping small farmers.  Its CEO, Andrew Ali, says the strategy of investing in small farms is more useful “than replicating the big farms in the midwest of the US….”

    Ali says it’s similar to the model used by Asian nations like Singapore where small farms are the cornerstone of the country’s relatively successfully agricultural export strategy.

    You May Like

    Video Twists and Turns Aplenty in US Presidential Race

    Even as Americans pause for this week’s Memorial Day holiday, much attention is focused on the presidential contest

    Iran Orders Social Media Sites to Store Data Inside Country

    New requirements are expected to affect the instant messaging app Telegram, which has more than 20 million users inside Iran

    The Struggle With Painkillers: Treating Pain Without Feeding Addiction

    'Wonder drug' pain medications have turned out to be major problem: not only do they run high risk of addicting the user, but they can actually make patients' chronic pain worse, US CDC says

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    By the Numbers

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Chinese-Americans Heart Trump, Bucking National Trendi
    X
    May 27, 2016 5:57 AM
    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Chinese-Americans Heart Trump, Bucking National Trend

    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Reactions to Trump's Success Polarized Abroad

    What seemed impossible less than a year ago is now almost a certainty. New York real estate mogul Donald Trump has won the number of delegates needed to secure the Republican presidential nomination. The prospect has sparked as much controversy abroad as it has in the United States. Zlatica Hoke has more.
    Video

    Video Drawings by Children in Hiroshima Show Hope and Peace

    On Friday, President Barack Obama will visit Hiroshima, Japan, the first American president to do so while in office. In August 1945, the United States dropped an atomic bomb on the city to force Japan's surrender in World War II. Although their city lay in ruins, some Hiroshima schoolchildren drew pictures of hope and peace. The former students and their drawings are now part of a documentary called “Pictures from a Hiroshima Schoolyard.” VOA's Deborah Block has the story.
    Video

    Video Vietnamese Rapper Performs for Obama

    A prominent young Vietnamese artist told President Obama said she faced roadblocks as a woman rapper, and asked the president about government support for the arts. He asked her to rap, and he even offered to provide a base beat for her. Watch what happened.
    Video

    Video Roots Run Deep for Tunisia's Dwindling Jewish Community

    This week, hundreds of Jewish pilgrims are defying terrorist threats to celebrate an ancient religious festival on the Tunisian island of Djerba. The festivities cast a spotlight on North Africa's once-vibrant Jewish population that has all but died out in recent decades. Despite rising threats of militant Islam and the country's battered economy, one of the Arab world's last Jewish communities is staying put and nurturing a new generation. VOA’s Lisa Bryant reports.
    Video

    Video Meet Your New Co-Worker: The Robot

    Increasing numbers of robots are joining the workforce, as companies scale back and more processes become automated. The latest robots are flexible and collaborative, built to work alongside humans as opposed to replacing them. VOA’s Tina Trinh looks at the next generation of automated employees helping out their human colleagues.
    Video

    Video Wheelchair Technology in Tune With Times

    Technologies for the disabled, including wheelchair technology, are advancing just as quickly as everything else in the digital age. Two new advances in wheelchairs offer improved control and a more comfortable fit. VOA's George Putic reports.
    Video

    Video Baby Boxes Offer Safe Haven for Unwanted Children

    No one knows exactly how many babies are abandoned worldwide each year. The statistic is a difficult one to determine because it is illegal in most places. Therefore unwanted babies are often hidden and left to die. But as Erika Celeste reports from Woodburn, Indiana, a new program hopes to make surrendering infants safer for everyone.
    Video

    Video California Celebration Showcases Local Wines, Balloons

    Communities in the U.S. often hold festivals to show what makes them special. In California, for example, farmers near Fresno celebrate their figs and those around Gilmore showcase their garlic. Mike O'Sullivan reports that the wine-producing region of Temecula offers local vintages in an annual festival where rides on hot-air balloons add to the excitement.
    Video

    Video US Elementary School Offers Living Science Lessons

    Zero is not a good score on a test at school. But Discovery Elementary is proud of its “net zero” rating. Net zero describes a building in which the amount of energy provided by on-site renewable sources equals the amount of energy the building uses. As Faiza Elmasry tells us, the innovative features in the building turn the school into a teaching tool, where kids can't help but learn about science and sustainability. Faith Lapidus narrates.

    Special Report

    Adrift The Invisible African Diaspora