Africa’s dynamic agribusinesses are rapidly developing new markets for African food products across the continent through organic growth and global partnerships. Despite coming relatively late to large-scale food production and export, the continent has a number of advantages driving its ability to boost food production and access new global markets.
The world’s population is growing even as incomes are increasing. This is changing diets, driving the demand for food globally. Africa’s population and income are also growing, with increases in the volume and variety of foods consumed tracking middle-class formation in key regions across the continent. All this is happening at a time of investment in transport and logistics infrastructure supported by legislation alive to the benefits of developing competitive trade within Africa.
This is also all happening on a continent with 60% of the world’s unused arable land.
“Africa’s agriculture sector is undergoing rapid change. Advances in the scale of aggregation and investment in processing and associated industries is promoting the large-scale accumulation and movement of African commodities like grains, cocoa, pulses, sugar and edible oils amongst others, within African countries, between African regions and even globally,” says Junaid Jadwat, executive, agribusiness sector, consumer client coverage at Standard Bank.
Family-owned agribusinesses expanding
These changes are being driven by local family-owned agribusinesses expanding their processing, warehousing and distribution capabilities into neighbouring territories, or across regions. “Local companies like Bakhresa Group, Bidco Group, Export Trading Group, Mohammed Enterprises Tanzania Limited and Willowton, with local expertise and strong distribution capabilities, are expanding across borders in their home regions and diversifying across the consumer value chain into higher value FMCG processing,” adds Jadwat.
“The resilience and growing strength of Africa’s family-owned agribusinesses point to their strategic advantage in local knowledge and established relationships,” explains Jadwat.
Standard Bank, present in 20 African markets has worked with many of these family-owned businesses, often for generations, and shares many similarities with them. Standard Bank is focused on driving growth on the African continent, which they call home. The bank has people on the ground who understand their markets, the detail of their client’s businesses as well as the conditions under which they operate. Standard Bank also understands local legislation, along with the challenges of moving goods, managing money and providing liquidity across the continent.
Most importantly, however, Standard Bank along with many of its African agribusiness clients, “can see the opportunity that the continent presents for agribusiness and agri-trade – while providing the global infrastructure to leverage this opportunity,” says Jadwat.
Global agribusinesses partnering with local players
One of these opportunities is the growth potential increasingly realised through partnerships between global agribusiness companies and local or regional players. Established global agribusiness players like Louis Dreyfus Company, Olam, and Wilmar have partnered and are continually looking to partner with locals to pursue opportunities for expansion across the continent, bringing skills, global standards/benchmarks, as well as a strong supply network and scale. “It would be exceedingly difficult for a newly arrived global agribusiness to access these networks without working with a local partner”, explains Jadwat.
“At the same time, many African commodities businesses are at that stage in their development where they are increasingly seeking access to the international trading and distribution networks that the global FMCG multinationals have – if they are to expand volumes and access a wider footprint of global consumers and a larger basket of consumer goods,” he adds.
For more than 20 years, Land O’Lakes has been supporting dairy farmers in Africa by administering funds for US Aid in addition to providing access to markets and technical assistance to improve farmers’ yields and competitiveness. In 2015 Standard Bank was lead debt arranger for Land O’Lakes acquisition of a 52.5 percent stake in Villa Crop Protection, a leading crop protection company based in South Africa. Land O’Lakes is the second largest cooperative in the United States with 2016 net sales of $13.2b and a clear vision for accessing the African agricultural market.
The synergy provides Land O’Lakes access to a continental agricultural network while providing vital chemical and fertiliser inputs. It also provides Villa Crop Protection’s clients with an alternative and expanded global market for their produce. More recently, Land O’Lakes completed a joint venture in Kenya with the Bidco Group, called Bidco Land O’Lakes Ltd, on their animal feeds business, further expanding their African footprint.
Having worked with many of these businesses for decades, Standard Bank is increasingly providing advisory, debt, trade finance, and global markets solutions that not only underpin the expansion of daily trading operations but also support the evolution and drive the earnings of Africa’s entire agricultural sector. Since the sector employs 70% of sub-Sharan Africa’s labour force and contributes 30% towards its GDP, “investing in and supporting the growth, health and dynamism of African agribusiness is central to the future growth and prosperity of the continent that we call home,” says Jadwat.
African Farmers Stories: Oke-Aro Pig Settlement Faces Losses From Disease
The African Farmers’ Stories, powered by Support4AfricanSMEs, in collaboration with Business Day Nigeria, Big Dutchman, Clarke Energy and other partners brings stories from farmers in Africa so that their challenges can be understood and long-term sustainable solutions can be sought.
As we continue to tell these stories, today we highlight the situation at Oke-Aro Agege, bordering Lagos and Ogun States where African Swine Fever has ravaged the Oke-Aro pig farm settlement, resulting in the loss of billions of naira worth of pigs and investments. African Swine Fever (ASF), a highly contagious viral haemorrhagic disease of wild and domesticated pigs is a known contributor to severe economic and production loss in pig farms. It was retrospectively first identified in Kenya in 1907 and can be spread via direct or indirect contact with infected pigs but is not a health risk to humans. Unfortunately, it has no vaccine or cure and must be controlled during an outbreak with classic sanitation measures, cleansing and disinfection, zoning control, surveillance and strict biosecurity measures.
The Oke-Aro piggery estate is located in in Giwa/Oke-Aro; it occupies overs 30 hectares of land with about 5000 pens, making it the largest pig farm in West Africa. It was established about twenty years ago by the Lagos State Ministry of Agriculture but is located in Ogun State and is powered by the National Directorate of Employment. The Oke-Aro Piggery Farmers Association has about 3,000 active members with each operating their own independent piggery within the settlement. The outbreak of such a deadly disease in the settlement is indeed alarming, and an indictment on the years of neglect from poor hygiene, absence of extension officers and poor supervision.
According to the President of the Association, It is estimated that the outbreak has resulted to over two hundred and fifty thousand pigs death worth and resulted in cumulative losses worth over 4.9 billions of naira. Many farmers have lost their entire stock and the lockdown has unfortunately worsened the situation as some tried to quickly sell of their pigs to avoid total loss but could not easily access buyers due to inter-state travel restrictions.
Unfortunately, this tragedy has severely affected the farmers of Oke-Aro pig settlement, as four farmers have been confirmed dead while another thirty are currently hospitalised from shock and high blood pressure brought on by the inability to repay the millions of naira worth of loans taken out to support their farms. Most of these farmers have no insurance premiums, and many are watching their investments, some of which are backed by borrowed funds from development and commercial banks, go down the drain. They are calling for assistance to revive the sector and preserve human lives.
The situation has not gone unnoticed, with farmers taking to social media to lament the challenges the disease has brought about. Many fear the high mortality rates and complain that pigs are being sold at drastic losses for fear of death and to avoid total loss. Fully bred pigs weighing over 70kg are in some cases selling for as low as ₦1500.Other farmers joined in to cite their losses in other areas of livestock farming with Newcastle disease that affects poultry and can also result in total loss of investment.
The Oke-Aro tragedy highlights the importance of the African Farmers’ Stories campaign – to tell the important stories to attract investors and policy makers into the agricultural sector. Indeed, the time to support the African farmer and other entrepreneurs is now, as jobs and livelihoods are being lost. There is an urgent need for investors to address areas such as the recycling sector to recycle the waste from piggeries and to contribute to value addition to the pigs, extension services to support and educate farmers, and policy makers to ensure constant supervision of the standard of hygiene within the settlement.
Article By: Victoria Madedor of Support4AfricanSMEs
COVID-19 Pandemic disrupting our food supply chain – What Next?
Vertical farming. Image credit: Josephine Favre
The COVID-19 Pandemic is challenging us. None of us saw it coming!
Everything around us is changing, from our behaviour in how we deal with the nitty gritty little things to the way on how we look at managing our businesses under Lockdown.
At this point of time, food advocates, including smallholder farmers are facing immense pressure not only on food production, but on distribution/supply due to many countries and their boarders suddenly closing.
There are some countries that are better managed than others thus can go by with their activities on a daily basis, however there are many countries still lacking the appropriate support and expertise necessary to implement sustainable, suitable and appropriate food transition during this Pandemic.
Our entire supply demand chain could so easily be redesigned or redefined due to the COVID-19 Pandemic and the associated economic disruption.
What does that mean? It means owners of food production will need to find ways to monetize their existence. These will result to immediate self-production, leading to door to door delivery of everything we need and consume to our homes.
Building a food production infrastructure which uses less land, less water, less fertilizer and puts higher value, nutritious food at the doorstep of the consumer, is undoubtedly a huge step forward for agriculture and human development.
We are at a point when the technology not only already exists but is improving at an exponential rate; the question is not when but how? How big of a role can vertical farming play in securing the availability of food for future generations while protecting the planet in the process.
Integrating sustainable food production into the urban environment and becoming climate resilient is a necessary step for a modern society. Vertical Farming offers all of this, while also serving as a tool for uplifting quality of life in densely-populated urban areas.
Vertical farming is a smart solution that will use the most advanced technologies in agriculture to provide answers to food production questions. Vertical farms are climate controlled and produce the same quality of food regardless of environmental factors like droughts, floods, pests and disease. By remaining independent of the outdoor environment, vertical farms can provide food for urban and rural areas alike that suffer from food shortage during periods of extreme weather or disease.
It is more clear now that Vertical Farming is no longer just an Urban Farming solutions but a general farming solution given today’s climate changes such as heat waves, extreme floods etc. We need to be in control and Vertical Farming or CEA gives us just that, RESILIENCE.
The African Association for Vertical Farming (AAVF) is playing a very big role to ensure that the farming community (and potential Agriprenuers) are aware of Vertical Faring as a modern way of farming that ascertain productivity despite climate change challenges, while addressing food security delivery.
We the AAVF at this point of time advice every family owning land, small or big, a balcony or a side garden to learn on how to produce, or provide for themselves and their own by using Vertical Farming Technologies as their agriculture method starting from now.
New technologies for single household to complex business projects can now easily be taught. Join us for our online Vertical Farming Trainings at: https://www.aavf.ch/copy-ofapplication-form-1
There can be no doubt that we have to act now and move toward more sustainable thinking in food practices.
We can do this together!
Article By: Josephine Favre, President The African Association for Vertical Farming
Ensuring that Hunger does not Kill more people than COVID-19 in Africa
With the global spread of the COVID-19, and gradual lockdowns in cities and countries across Africa, I have new fears – that starvation and hunger are mounting threats for people across continent. These fears are hinged on the realization that it is planting season in most parts of the Continent, and yet farmers are being asked to sit at home, the movement of seasonal workers is restricted, research institutes that provide seeds, fertilizer blending companies and agrodealers, processors and markets are all being shut down. Our regional and national borders are closed, and trading is being restricted. These realities, if pro-longed and not urgently addressed, will lead to short term consequences of food shortages, price hikes, and medium to long term consequences of under-nutrition, mass starvation and eventually death, especially among our most vulnerable populations.
We have to act with urgency to stem the virus through social distancing and lock downs. At the same time, we must recognize that farmers and workers in the food industry are essential to the fight against the pandemicand desperately need to be protected and supported. Indeed, without nutritious food, the sick cannot recover, and the healthy will eventually become unwell.
My fears are shared by a few stakeholders on the Continent and around the world. The EU Farmer’s organization – COPA-COGECAearlier this week actively advocated for support to ensure minimal disruptions to the food supply chain, worker protection and contingency plans. The United Kingdom and the United States have already outlined comprehensive plans to provide intervention grants, loans, and tax holidays, for stakeholders in the food industry, including restaurant owners and retailers affected by the economic fallout of the pandemic. In Mexico, farmers who continue to plough their fields are being celebrated as heroes.
Sadly, there has been no coordinated action from industry groups, the private sector, civil society, or the public sector to raise awareness about the looming food crises on the African Continent, linked to COVID-19.
Thankfully, it is not too late to act! We must take decisive and proactive steps to ensure that our people have access to affordable nutritious food in both our urban and rural communities. This will require that;
- Our governments at the federal, state, and local levels recognize key stakeholders in the food and agricultural landscape as essential workers and provide them with the protection and support that they need to continue to work, following pre-stipulated safety and health protocols. We must keep food markets and factories open, with clear guidelines around limiting crowds, and widely publicized schedules for who can enter during what periods of time. We can also learn from China’s example over the last few months, where government officials, especially the Ministry of Agriculture and Rural Affairs (MARA) and Ministry of Human Resources and Social Security and National Health Commission repeatedly issued comprehensive notes to farmers on the control and prevention of the virus in rural areas, as well recommendations and protocols for preparing for their planting season and sustaining the livestock and poultry sectors.
Beyond guidance and protocols, our governments must urgently partner with the financial services sector to develop comprehensive loan packages for farmers, and entrepreneurs who are committed to working during the crises and can demonstrate their capacity to fill critical gaps in the food ecosystem. These interventions must actively engage women, who play a critical role in the sector. In addition, our governments must assess thenational strategic and emergency grain reserves to gauge what is available and how to effectively manage and deploy these reserves in a transparent and accountable manner to minimize price hikes and widespread shortages.
- Our industry associations, fast moving consumer goods companies, international trading companies, aggregators, wholesalers, and retailers must work together seamlessly to ensure the efficient and effective provision of affordable food to the masses of people. Leveraging technology, raw material suppliers and processors can actively partner with logisticsproviders and retailers to ensure that food is moved to where it is needed most, and no community is left behind.
This is not a period for hoarding and price gouging, with a focus on profits and growth at all costs. Companies must rise to the higher ideal of shared corporate values, where they put the needs of their customers and the African people ahead of their own requirements for profits and shareholder value. To ensure that this occurs, consumer protection and anti-competition agencies must closely monitor the activities of the largest actors in the food industry to ensure a level playing field.
In addition, the private sector can facilitate the introduction ofdrones, sensors and other precision agriculture andinnovative technology solutions, which will allow for active monitoring of commercial farm activity from a distance. Companies such as Atlas AI have demonstrated the power of technology to manage farms and assess impact, without direct human contact.
Our nonprofit organizations and media organizations must provide thought-leadership, monitoring and guidance to the entire ecosystem. Organizations such as GAIN are already providing critical guidance during this period.
- Finally, average citizens must invest in their own backyard and community gardens, while ensuring social distancing, manage their food budgets judiciously and share with their neighbors. Faith based organizations must open soup kitchens, offering free meals and partner with logistics providers to coordinate drop-offs. We must rebuild trust in our communities by caring for the most vulnerable at this exceedingly challenging time in our history as humanity!
As an eternal optimist, I am hopeful that as a people we will survive the COVID-19 pandemic, emerging with some critical lessons and a more resilient, united,and efficient food ecosystem. Now is the time for governments, stakeholders in the food ecosystem and citizens to act! Every minute counts!
Article By: Ndidi Okonkwo Nwuneli is the managing partner of Sahel Consulting Agriculture & Nutrition and the Co-Founder of AACE Foods. She is a 2018 Aspen New Voices Fellow and is currently writing a book titled “African Entrepreneurs Nourishing the World,” as a research fellow at the MR-CBG at the Harvard Kennedy School.
Visit: Sahel Consult