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Agribusiness in Africa ripe for boom

Cape Town -  The time is ripe for South African firms to tap into Africa's growing agribusiness market, according to managing director of DHL Express Sub-Saharan Africa Charles Brewer.

He said Agribusiness has seen significant growth in Africa and the demand for agricultural produce is set to grow further.

“The retail sector is booming in Africa, as is the rapid growth of populations and the African middle class", he said in a statement on Wednesday.

"As a result of this expansion, there is a greater availability of and demand for good quality agricultural produce and processed food products than ever before.”

Brewer pointed out that a World Bank report entitled Growing Africa: Unlocking the Potential of Agribusiness revealed that Africa’s farmers and agribusinesses could create a trillion-dollar food market by 2030.

This is a three-fold increase from the current size of the market which is estimated to be worth $313bn.

“This expected growth highlights the growing market and many opportunities for South African agribusiness and related value chain role players to expand into Africa,” said Brewer.

Africa provides a new market for agribusiness firms, said CEO of the Agribusiness Development Corporation (ADC) Hennie van der Merwe.

“Given its increased spending power, demand for goods and untapped land resources, Africa is currently experiencing a revival in terms of its focus on agribusiness", said van der Merwe.

He said this will not only increase food self-sufficiency, but also create jobs and economic activity, particularly in rural areas.

Van der Merwe explained that while Africa is well-endowed with resources, it often lacks much of the necessary expertise to unlock the commercial potential of its agriculture resources.

However, he said South Africa is well regarded for its expertise in commercial farming and agribusiness.

“One of the major limitations on agribusiness development in Africa is a human capacity and human skills constraint."

"The ability and experience to develop and manage commercial farming and agribusiness ventures are largely lacking in the African environment and that major technology transfer and capacity building would be necessary in this regard.”

Van der Merwe said this is where the opportunity lies for local businesses and farmers to expand beyond their borders and offer expertise in neighbouring countries.  

It is crucial to have partnerships in place before venturing into projects in Africa, he said.

“Partnerships with a local business or association in the specific country are necessary as business owners need to be provided with assistance, guidance and sometimes protection when in the area."  

“The market in Africa is there and ready, but the question is how local businesses create a direct link to service the market needs,” Brewer added.

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