Whether for profit or social motives - and often both - an increasing number of investors are targeting opportunities in African agriculture. At the same time innovative approaches for deploying aid to support farming businesses linked to smallholders are emerging. This blog provides a snapshot of who is doing what, where and how.

21 June 2011

What are the realities of farming in sub-Saharan Africa?

There is enormous agricultural potential in many parts of Africa. There is no reason why Africa cannot be a major producer of agricultural products on a scale equal to South America. But it will take heavy investment by the private sector to realise the potential.

Why has there been so little private investment in agriculture to date? It is certainly not a lack of finance. There is more international interest in investing in Africa now than ever before.

The real problem is a lack of sufficient profitable opportunities. Agriculture in Africa is an infant industry. It faces high start-up costs and lacks supporting infrastructure. In contrast, international markets are highly competitive and benefit from economies of scale.

The challenge is how to get things started. How to deploy public sector resources to overcome barriers to entry and stimulate rapid growth of profitable and socially-responsible commercial agriculture?

At the Agriculture Investment Summit 2001 (London 21-23 June), Chris Isaac, Business Director of AgDevCo, a social investor and project development company, will describe approaches which are helping “kick start” investment in African agriculture:

Agricultural Growth Corridors in Tanzania and Mozambique
• A Public-Private Capital Fund to stimulate profitable investment in early stage agriculture

AgDevCo has a strong portfolio of investment opportunities which can achieve major social impact and deliver good financial returns. The presentation will be available on the AgDevCo website soon.