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VENTURES AFRICA – Managing Director of DHL Express Sub-Saharan Africa, Charles Brewer, has said that agribusiness has witnessed “significant” growth in Africa across the full value chain from production down to retail following increasing demand from the growing middle class.
“The retail sector is booming in Africa, as is the rapid growth of populations and the African middle class. As a result of this expansion, there is a greater availability of and demand for good quality agricultural produce and processed food products than ever before,” he says.
According to a World Bank report, Africa’s farmers and agribusinesses could create a trillion-dollar food market by 2030 – a three-fold increase from the current size of the market which is estimated to be worth $313 billion.
“This expected growth highlights the growing market and many opportunities for South African agribusiness and related value chain role players to expand into Africa,” says Brewer.
According to Hennie van der Merwe, CEO of the Agribusiness Development Corporation (ADC), based in South Africa, given the increased spending power, demand for goods and untapped land resources of the continent, “Africa is currently experiencing a revival in terms of its focus on agribusiness, not only to increase food self-sufficiency, but also to create jobs and economic activity, specifically in rural areas.”
However, he explains that while Africa is well-endowed with resources, it often lacks much of the necessary expertise to unlock the commercial potential of its agriculture resources, whereas South Africa is well regarded for its expertise in commercial farming and agribusiness.
Van der Merwe posits that major technology transfer and capacity building would be necessary to mitigate the problem adding that opportunity lies for local businesses and farmers in this regard to expand beyond their borders and offer expertise in neighbouring countries.
“Partnerships with a local business or association in the specific country are necessary as business owners need to be provided with assistance, guidance and sometimes protection when in the area. It is also essential/indispensable to ensure that all the building blocks for working value chains are in place to ensure and support successful operation. A local partnership will also assist with analysing the market carefully to evaluate what the real market needs, requirements and opportunities are,” Van der Merwe concludes.