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SA to gain from African farming

Johannesburg - South African agricultural entrepreneurs will stand to benefit from a forecast uptick in farming activity in the rest of the continent.

This is according to Riël Malan, managing director of the Unlimited Group and author of a report entitled "Africa: Breadbasket for a New World", who spoke to Chris Gibbons on Fin24's AM Stock Take podcast on Thursday.

Malan's report is based on the assumption there will be a 38% increase in the world's population over the next 40 years to 9.2 billion people.

However, this will translate into a near doubling of demand for food.

"The major shift we are seeing is a change in the structure in demand and specifically a move towards more value-added products - specifically meat," said Malan.

Malan said the chief problem in this forecast is that the majority of arable land in the world is already being utilised, with the notable exception of the African continent.

"Africa is the last frontier," he said.

Multinational investors, including Blackstone Group, Deutsche Bank and Goldman & Sachs, are already involved in new agricultural projects in Africa. This is according to a report from Barcelona-based agricultural non-governmental organisation Grain.

Malan said a potential increase in agricultural activity on the continent creates investment potential for South African players in the field.

"The technology that has been perfected here can be utilised in the rest of Africa and that obviously holds opportunities for agricultural companies and entrepreneurs out of South Africa," said Malan.

Malan identified the lack of infrastructure in Africa and ownership and financing problems as the biggest constraints to agrarian investment on the continent.

- Fin24.com

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