The African Development Bank (AfDB) has said that Africa had potential to attract 880 billion dollars (about N141.7 trillion) investment in agriculture by 2030.
This is contained in a report jointly produced by the Agriculture and Agro-industry and Development Research Departments of the bank.
The report said that investment opportunities in agriculture abound in Africa, adding that the continent accounted for about 60 per cent of the uncultivated arable land in the world.
According to the report, it is estimated that Africa has the potential to increase the value of its annual agricultural output from 280 billion dollars in 2010 to about 500 billion dollars by 2020 and to 880 billion dollars by 2030.
“Africa’s projected output is expected to impact significantly on its demand for upstream products such as fertiliser, seeds, pesticides and machinery. “It is also expected to result in the growth of downstream activities such as bio-fuel production, grain refining and food processing.”
The report further stated that both upstream and downstream markets could be valued at up to 275 billion dollars by 2030, if the continent had credible public-private partnerships and sound investment environment. It said that 16 private agents had been engaged in upstream and downstream phases of the agricultural value chain for the transformation of Africa’s agriculture and its economies.
“One major challenge, therefore, is how to develop new institutional arrangements between the public and private sectors that foster private sector development without leaving smallholder farmers isolated during the transition. Currently, large investment opportunities still exist for viable agriculture and components of these investments will include expanding infrastructure across the agricultural value chain.”
This, according to the report, is meant to ease the movement of agricultural goods from farmers to markets, both locally and regionally.
It said that untapped value addition in agriculture as well as improvements in the business regulatory environment and expansion across the continent’s “supermarket” provided unique investment opportunities. “Such market-oriented investments also promote rural employment, facilitate technology transfer, and build a sound foundation for sustainability and long-term sector transformation.
“Despite the recent global financial and food crises, the longer-term inclusive growth prospects of Africa’s agriculture are bright, especially if smallholders are assisted to specialise, add value and reach these growing markets. In particular, the surge in food prices in 2008 and the persistent food price volatility, presents a unique opportunity for African countries to increase their investment in the agriculture sector, to ensure food security and price stability.”
The report said that current high food prices had been attracting large-scale foreign private sector investment in farming, describing it as “great potential for growth”.
