Imagine for a moment the impact of a $1 trillion African agribusiness sector on the lives of Africans. Currently worth about $313 billion, the sector already provides jobs for 70% of the poorest people on the continent. An increase greater than threefold will bring jobs to lift millions out of poverty; most stomachs will be filled with nutritious meals, Africa’s agricultural exports will dominate global markets, and the continent’s farmers, who have borne the brunt of harsh economic conditions, will get a new lease of life as they become competitive in the global marketplace.
African agribusiness could be worth $1 trillion by 2030
This is not an unreachable dreamland, a World Bank report published in March 2013 argues that it could soon be a reality. The report, Growing Africa: Unlocking the Potential of Agribusiness, projects that African agribusiness could be worth $1 trillion by 2030. It’s the latest in a string of positive reports about the continent’s socioeconomic development prospects, despite political instability in a handful of countries.
But no magic wand will cause a $313 billion agribusiness sector to grow into a $1 trillion behemoth. The World Bank cautions that everyone will have to work hard—governments, the private sector, farmers, and so on. However, the elements for a pole—vault jump are in place. For example, in addition to huge, untapped water resources, Africa has more than 50% of the world’s fertile and unused land—that’s a whopping 450 million hectares. The continent uses only 2% of its renewable water resources, while the global average is 5%. The steady and increasing private sector interest in African agribusiness is just the icing on the cake.
Also, while global prices of agricultural commodities are rising due to increasing demand, supply of these commodities is slowing due to factors like land degradation and water scarcity in many countries, especially in Asia. “Water scarcity has become a major constraint because of competition from rapidly growing industrial sectors and urban populations,” states the Word Bank. Yet Africa has both water and land in abundance.
African agribusiness sector is not just important for the sake of Africa but “essential for ensuring global food security.”
At first glance, the World Bank report paints a glowing—even celebratory—picture of African agribusiness prospects. But the report also rigorously highlights many stubborn and recurring obstacles in the path of development progress. It states that “to generate the jobs, incomes and food so badly needed for Africa’s growing population over the next 20 years, agro—industries need to undergo a structural transformation,” and it calls for more concerted investment in the sector.
There is still some distance to cover to realize the dream of a $1 trillion agribusiness. But many hands are already on deck. Ghana and Senegal are forging ahead with rice production Zambia’s 88 million hectares of available land are said to be quite suitable for maize and Cote d’Ivoire, Ghana and Nigeria already account for two thirds of the world’s cocoa. There is abundant water and land, increasing private sector investment and political commitment, all of which provide flickers of hope for a sector under revival. The World Bank says that an African agribusiness sector is not just important for the sake of Africa but “essential for ensuring global food security.”
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