African agri-business 'needs investment'

By Francis Maingaila

LUSAKA, Zambia (AA) – Agriculture in Africa has not only suffered from underinvestment and limited research but also from a lack of technology and services for farmers, according to experts.

Zambia National Farmers’ Union (ZNFU) President Evelyn Nguleka told Anadolu Agency unless agricultural practices change “the entire African continent is at risk of falling into deeper [trouble], not only of food insecurity, but also from greater poverty than before”.

Nguleka’s claims follow last month’s African Development Bank (AfDB) annual meeting in Lusaka where the body said it plans to invest up to US$40 billion annually in transforming the agriculture sector.

However, Nguleka said that although most development plans give high priority to agriculture, much government investment has drastically declined in recent years, casting doubt on making fertilizer, machinery, irrigation and finance provision a reality.

Nguleka says compensation for failing crops is unavailable to struggling farmers, who are also unable to access loans because they do not possess collateral.

“Minimal investment in research also has hampered efforts to meet the increased challenges of weather volatility,” Nguleka added. “Until these issues are resolved, the future of agriculture in Africa will continue to be bleak because very few farmers are interested in remaining in the industry.

“If agricultural investment continues to be low, the poverty reduction agenda will only be an idea that will never be realized in Africa.”

However, the AfDB investment plans comes again against a backdrop of the continent possessing a huge spectrum of suitable conditions which could see a broad range of diverse agricultural production.

According to an AfDB report signed by its director for agriculture and agro-industry Chiji Ojukwu, the bank investment will enhance the emergence of locally owned agro-processing industries, capable of creating jobs and increasing incomes for rural Africans.

“If nothing is done, the population in extreme poverty will rise from 420 million in 2015 to 550 million in 2025,” the bank’s research states.

The AfDB suggests that increased food demand and changing consumption habits driven by demographic factors, including population growth and urbanization, were leading factors to rising net food imports – expected to grow from US$35 billion in 2015 to over US$110 billion by 2025.

Additionally, the bank observed that agro-industry will not only promote industrialization and urban employment, but also break the productivity gap of development and will reduce food costs, including supply uncertainties and improve nutrition.

The bank further suggested that harnessing Africa’s agricultural potential could serve as a much-needed a game changer for the continent’s economy:

“Already, countries such as Kenya, Tanzania and Ghana, including Ethiopia, are making progress in the global horticulture industry.

“These countries have deliberately designed policies that support the sector on an understanding that the sector can propel [them] to the top of the global food-value chains,” the report states.

While on a recent fact-finding visit to Zambia, Dirk Hanekom, a South African farmers’ leader, told Anadolu Agency that investing properly in agri-business would “invigorate” the sector in the continent:

“Investing in agro-industry with the purpose of transforming the industry into a fully-fledged business will not only invigorate Africa’s erring economies, but will also ensure food security on the continent where millions of people die of hunger-related diseases, including malnutrition among children.”

Hanekom said agricultural productivity in Africa was crucial insofar as it not only promoted economic growth and helped build people’s resilience, but also had the capacity to reduce chronic food insecurity.

Investment targets for South African farmers include Zambia, Nigeria, the Democratic Republic of the Congo (DRC), Angola, Mozambique, Malawi, Ivory Coast, Tanzania, Namibia and Sudan.

“As a business it will attract its own investments from the private sector who will add value to the entire industry. Once the sector has been properly ‘powered’ it will boost local food production, reduce food import, conserve foreign exchange and above all it will increase domestic savings, including assuring strong macroeconomic and fiscal stability,” said Hanekom.