It is said that agriculture and agribusiness together are projected to be a US$ 1 trillion industry in Sub-Saharan Africa by 2030 (compared to US$ 313 billion in 2010), and they should be at the top of the agenda for economic transformation and development (Source: World Bank). Also, with regards to food security, Africa is home to over 874 million hectares of land suitable for agricultural production. This means lots of untapped potential for the future of African youth and the African economy. Before we can truly embrace the true benefits of agriculture, we must learn to move away from the Deficit Analysis (challenges of farming) to the Prospect Building (opportunities in farming). In time past, food supply was mainly sourced through traditional agricultural activities, where commodities were highly dependent on climates, cultures, and few local technologies. After years of neglect, agriculture is once again seizing the attention of African governments, business leaders, communities, and development donors, as a powerful driver of the continent’s potential growth. The importance of agriculture to Africa in continuing high growth rates, creating more jobs, significantly reducing poverty, and growing enough affordable nutritious food to feed its families, exporting its surplus crops, while safeguarding the continent’s environment cannot be undermined. Times are changing, and they are changing fast!
It was for these reasons the Afrique Africa Investment Summit was organized by Welcome2Africa at the Accra World Trade Center in Accra from the 17th – 18th November, 2015. The event was attended by dignitaries and key speakers from all over the world. This two day event gave me the opportunity to understand and appreciate the enormous contributions given through Public Private Partnerships. There are three key personal lessons which I took from the summit which I would like to share;
- Pulling Together: identifying resources available
- Growing Together: understanding and utilizing resources
- Winning: celebrating success and ensuring economic growth in Africa
Pulling together: identifying resources available
Through the power of the internet and networks we can find out and utilize different technologies and other Public Private initiatives geared to promote agriculture.
Institutions and organizations like AAIN, GAIN, DAIN, AgDevCo, IFC, Acumen Fund, UniBRAIN Programme, etc, are also in place to provide financial and mentorship support to startups and existing entrepreneurs who desire to enter agribusiness in Africa.
One piece of advice I would give to anyone seeking funds or support from any investor is to firstly identify all the possible risks in your business and reduce them as much as you can. Furthermore, you need to prove beyond assumptions and theories that your business is profitable, preferably by starting something on your own as evidence and to build credibility. This shows that you have “skin in the game”, that you are able to back yourself and that you have what it takes to establish and grow the business, and then it is more likely an investor will give you the time of day. Remember, focus first on identifying a need and explore, test and settle on a solution that would uniquely address the need, and then go get it.
Growing together: understanding and utilizing resources
First of all, to be a successful agribusiness entrepreneur, you need to have the required skills and be well informed about the commodity, market, demand and your return on investment (ROI). Just like in any professional discipline, you cannot just declare yourself a doctor or an engineer whilst you have no proper training to deliver the results you want. You need to have a good idea of whether you would fail or succeed to help you plan. This enables you to learn on the job better, but it is still key to obtain the right resources before you engage yourself in any agribusiness. By doing so, you are reducing the level of risk for your business whilst gaining investor confidence. It would help you identify your priorities and where you would need to focus your funds. I had an interaction with a farm expert with years of experience across Africa, who brought to my attention something that most smallholder farmers do not consider in their farming practice, and even sometimes agribusiness owners – Internal Control. This is vital for any long term agribusiness. He said, “Naturally, people don’t do what you expect on the farm, they do what you inspect”. This means you can have a farm in your backyard, and things would still go wrong, same as you would have had your farm thousands of miles away. You would need to share the vision of your company to your relevant stakeholders (farm managers, field workers, etc.) and together defining ways or structures ensuring business continuity that ensures that things are working in your absence. This is to say visiting your farm regularly may still not be a guarantee.
Create a Win-Win situation for your business. You cannot do away with internal and external partnerships if you want to go far, especially if you are a startup and you lack funds, and you want to maximize profits. Lastly, applications like Esoko, GPS & GSM Trackers, Mobile money, etc. are tools that can be leveraged for remote services to enhance productivity and reduce cost. I may have the competence, you may have the money, the other person, the network, and together we build on the common goal we share.
To Win: celebrating success and ensuring economic growth in Africa
After all is said and done, we need to celebrate success. We need to celebrate those who have made it, learn from their experience to build on ours. No need to start all over if it has already been started. For Africa to win in agriculture, we would have to have a positive mindset driving strong economic growth, and working together as a people. Agribusiness owners must spend time to understand and to optimize their business value chain. Knowing what truly matters at each point of the value chain, eliminating what the consumers/customers do not need, and presenting, packaging or branding the output in a way that attracts growth. As of today, agriculture is the most important sector in most African countries, averaging 24% of GDP for the region. Agribusiness input supply, processing, marketing, and retailing add about 20% of GDP. Global experience and PwC’s latest report ‘Food security in Africa’ suggests that with growing incomes and urbanization driving the commercialization of agriculture, the shares of both downstream and upstream agribusiness activities are poised for rapid growth. Both domestic and global markets are experiencing strong demand, which is likely to continue even as domestic demand accelerates.