Agribusiness continues to boom in Africa

The world's population is constantly growing, and with it the interest
of investors in Africa's arable land. The continent has vast untapped
potential - but can local producers compete with foreign companies?
The wind whistling through Berlin on Monday (19.01.2015) was icy.
Three Italian tourists carefully navigated the frozen puddles on the
sidewalk as they scurried to the Brandenburg Gate, ignoring the black
limousines gliding past them in front of the exclusive Adlon Hotel.
These limos were unloading delegates to the day-long "Agribusiness
in Africa" conference, which aimed to bring together entrepreneurs and
development experts from around the world. They hoped to answer
the question: If African governments fail to invest the continent's
youth and infrastructure and provide longer-term loans for small and
medium businesses, is there a danger that others will reap the fruits
of Africa's agriculture?
A 2013 Stanford University study suggests Africa is home to 60
percent the world's uncultivated land suited for crop production. But
Africa accounts for only 3 percent of global agricultural exports. As
the world's population continues to expand, investors have started
looking to the continent's soil in search of profits.
"The advent of the agribusiness phenomenon is a huge opportunity for
Africa," Fadel Ndiame said. He works for AGRA, the Alliance for a
Green Revolution in Africa. The organization helps smallholder farmers
improve their skill set - something they desperately have to do if they
want to compete against large foreign companies moving to Africa.
"I think we need to use the partnership with Europe as an opportunity
rather than as a punishment or something you do because there's an
ultimatum," Ndiame said.
Much of Africa still relies on subsistence agriculture, like here in
Tanzania
Ndiame was referring to the free trade agreements between the
European Union and several African countries that were signed just
before a deadline last year - after which European governments had
threatened to impose higher import tariffs on African products.
Opponents of the agreements, known as EPAs, were afraid that
companies from Europe would displace less competitive African
producers. Fadel was more optimistic, saying that joint ventures could
provide a solution to overcome African companies' productivity gap
that would make it hard to compete with European firms on the open
market.
More profit for small farmers
Fadel said he believes foreign capital and expertise could help
promote local development. Bruno Wenn of the German development
bank KfW agrees. Wenn, who has worked in various development
projects in Africa for over 30 years, says that African governments
need to do more to develop regional markets and to support the
medium-sized companies that have begun to develop in the region.
Like their counterparts in Germany, these firms could become the
motor that could drive development, innovation and jobs. "Banks in a
lot of African countries are reluctant to provide long-term finance for
mid-sized companies. They are ready to provide short-term capital
but with short-term capital you cannot go for long-term investments.
This is unsustainable."
Small farmers are often least well-equipped to deal with drought
A few steps away is Shingirirai Nyamwanza. The 34-year-old is the
managing director for Africa of Global Clover Network, an NGO based
in Tanzania, which seeks to inspire young people to choose
agriculture as a career path. Until recently, this had been hard work,
she said.
But seven or eight years ago there had been a shift in young people's
perceptions: "Once's there's a dollar sign, people are going to
gravitate toward it."
And this, she said, is a hugely positive development. "We talk about
60 percent of the world's arable land being in Africa, so if you don't
engage African young people to do that, guess what, they're going to
send other people to capitalize on this. So again in 30 years, you have
a population that's disenfranchised."
African governments, she said, need to drive the agribusiness agenda
and make it attractive for young people. "Or else, you're looking at
your second or third colonization of Africa. If you don't own your own
land as a people, there's not much you can leverage. And you get into
all sorts of other political and social issues."