Opportunities to invest in domestic sustainable food and agriculture have grown dramatically in the last decade considering Africa’s rising income levels and high population growth rate. Food demand will skyrocket in the medium term creating new opportunities for agricultural investment and growth in this sector.
Impact of Agriculture in Africa
The urgency on Africa’s food production to satisfy demand will necessitate significant investment to ensure food security as Africa is the only region that has yet to experience a green revolution currently small-scale farmers account for over 60 of Africa’s population while agriculture accounts for approximately 23 percent of the continent’s gross domestic product nonetheless much of Africa’s agricultural potential remains untapped experts say agriculture is a low-risk investment that keeps pace with inflation and increases in value over the long term
Reasons why you should invest in Agriculture
There are many reasons why you should consider investing in agriculture in africa as this industry is set to create many dollar millionaires in the coming years. These are 10 reasons why investment opportunities in the agriculture sector in Africa will make more millionaires.
Projected increase in food demand for current trends the quantity of food produced would only be enough to feed half of the world’s population by 2050. according to the united nations in the next three decades our planet will add 2 billion people and there will be the need to hike agriculture production by 70 percent.
If it was oil utility or water that needed to grow by 70 percent investors would be swarming to stocks and funds in those sectors, the fact that’s not happening in the sustainable agriculture industry spells opportunity for opportunistic investors. These patterns can be reversed and Africa is an excellent place to start going to Africa’s increasing purchasing power and rapid urbanization.
Food demand will soar significantly in the coming years opening up new agricultural growth opportunities, in short people will always need to eat; both livestock and crops contribute to the global need for nourishment the global population is growing and so will the need for sustainable agriculture, being a commodity agriculture is mostly recession proof due to the constant demand for food. This trend present a great chance for investment in agriculture as the demand for food now and future will always be there.
Future African billionaires will be farmers, it seems far-fetched to imagine oneself achieving tenable financial goals through agriculture in four to five years after graduating from high school the ideal narrative would be getting a white-collar job curing sick patients or defending clients in court after attending college. Farming appears to be engaged by people who have no other options however the green revolution has apparently dawned as the agricultural industry has made huge strides.
The once ignored profession is now a highly sustainable treasure trove Dr Akinwumi Adesina president of the African development bank recently asserted unequivocally that the next generation of African billionaires would be farmers when asked for his opinion on where he believed the next crop of African multi-millionaires would emerge. According to Dr Adesina by 2030 the size of the food and agricultural business in africa will reach 1 trillion, so if you are thinking of how to make money that is the sector to be in.
Big market for food processing and logistics industry according to a recent UN food report farmers in several rural villages in africa loses more than half of their harvest every year not to neglect or to lack of care but to the deplorable state of the transport infrastructure that makes it difficult getting their harvest to market centers.
It is estimated that as much as 50 percent of fruits and vegetables, 40 of roots and tubers and 20 percent of cereals legumes and pulses harvested in sub-Saharan Africa are lost before they reach a market with expert knowledge competence and innovation in the food preservation industry. The current scenario provides huge investment opportunities in food processing industry which can process the many harvests that goes waste, there are also opportunities for transport logistics company who can help in transportation of food from rural areas to the cities.
Africa has the potential to feed the entire world, being home to 60 to 65 percent of the world’s uncultivated arable land and 10 percent of renewable freshwater resources, meanwhile its agricultural output has increased by one hundred sixty percent in the last thirty years according to some estimates the Democratic Republic of the Congo alone could feed two billion people.
There will be an ever increasing demand for food and agricultural products as the global population continues to rise approaching 10 billion by 2050 africa just as china dominates the global manufacturing industry has the resources to feed the globe, in the long term these gives a good reason why to look into investment in agriculture in africa as all signs indicate good prospects in the sector.
Investment opportunities in agriculture technologies. The Netherlands has the world’s 17th largest economy and a population of 17.4 million people, a land area of 41 543 square kilometers less than twice the population of Rwanda despite this, the country is the world’s second largest food exporter and the second largest food supplier. In 2017 the Netherlands exported agricultural products worth nearly 92 billion dollars. They were able to do so by focusing incessantly on discovering innovative technology to produce higher yields with fewer inputs.
Many farms in the Netherlands for example produce more than 20 tons of potatoes per acre as compared to the global average yield of nine tons per acre, between 2003 and 2014 modern manufacturing technology led to a 28% increment in vegetable yields a six percent decline in energy consumption and a 29% significant decrease in fertilizer usage, this suggests agriculture thrives with better technology than a heavy reliance land mass.
The present state of agriculture in most parts of africa lacks the needed technology as most farmers engage in their activities manually, with that being said picture the benefit of investment in modern agricultural technology and the huge benefit it will bring as this market is mainly untapped.
Africa remains the only continent yet to experience green revolution as a result of recent innovations in research technology the yield of global agriculture increased substantially during the green revolution. New chemical fertilizers, synthesized herbicides and pesticides were developed during this time period It is estimated that the green revolution saved up to 1 billion people from food shortages. In the last decades many African countries focused more on their natural resources like oil, gold, diamond among others and deserted their agricultural potential at the time when many nations were intended to benefit from the green revolution therefore If africa is to save its people from hunger it must stage its own rendition of the green revolution.
High demand for sustainable organic food according to the non-profit advocacy group impact assets worldwide consumers are increasingly demanding organic and fair trade products including coffee chocolate and quinoa. Consequently big corporations like Starbucks, nestle, green mountain coffee and cargill are turning to smallholders for raw materials The group cites major international raw food firms like Ferraro which is pledged to sustainably source 100 of its palm oil by 2015 and all coffee by 2025.
According to impact assets these types of corporate commitments motivate intermediaries and smallholders to meet demand for organic and fair trade products these higher standards and better connections between buyers and growers lead to increased investment opportunities, with this development africa has a huge potential to meet the world demand of organic food since Africa’s full agricultural potential has yet to be realized. According to a study africa could produce up to three times more cereals and grains adding 20 percent more cereals and grains to the current global output of 2.6 billion tons if the continent’s agricultural productivity improves.
Similar increases in horticulture crop and livestock production could be seen the diverse means of investing in agriculture combined with new concerns over worldwide food consumption make it a compelling option for many investors.
Investment in agriculture can be more sustainable than the stock market. When you invest in agriculture you are investing in a physical plot of land this land’s value only appreciates unlike stocks and businesses, investing in agriculture is typically a long-term venture. Returns vary depending not only on commodity prices but on how much and how fast the land appreciates depending on the farm’s location. Current commodity prices and other factors returns on investment range from three to five percent for commodity based land or ten to fifteen percent for specialty crops, since agriculture investments are long-term they can be set up to be kept in the investors family and passed down to future generations.
Investment opportunities in agricultural digitization. In the coming decades digital technology has the capacity to transcend the food agriculture and fisheries systems mobile platforms, data analytics, high-resolution satellite imagery, precision equipment and artificial intelligence could all help boost sector productivity, sustainability and resourcefulness. Several of these technologies are already in use while others are still in development, this will necessitate significant public and private investment in digital infrastructure as well as education and training. These sectors present a huge opportunities for investment in africa which will yield great return of investment and at the same time improving the lives of millions of people.
Investment opportunities in agricultural education. Agriculture careers encompass some of the world’s largest industries and outlets of long-term careers employing millions of people, with the huge and untapped agricultural potential in africa the educational sector also present a great investment opportunity as more and more qualified experts are needed in these sector.
Most of the jobs in the agriculture and forestry industries are classified as green jobs meaning they help to preserve or conserve the environment. Agricultural engineer, Food scientist, Agricultural manager, Agronomist, Botanist, Forester, Horticulturist, Data analytics and a variety of other careers are among the most popular.
Investment in educational institutions such as private university or a vocational school in most African countries only requires a practicing license, partners and few investors. The next hurdle is hiring lecturers with highly relevant and marketable skills demanded by corporations in the agriculture sector also as the world is moving more and more towards digital education. Investments in physical structures can be limited as most courses can be carried out online.