As the new year begins, it’s a great time to think about new opportunities in the African agro-food industry. This list of his nine possible ideas for 2023 is intended to encourage initial consideration and further investigation, rather than presenting specific opportunities or broader business plans.
- Possibility of local production of baby food in Africa
There is untapped potential in local production of baby food in Africa, according to the International Trade Center. Africa imports €570 million worth of baby food annually and is expected to exceed €1.1 billion by 2026. This represents a significant investment opportunity in the African infant nutrition value chain, where imports are ten times higher than exports.
Entrepreneurs such as Seun Sangoleye, founder of Baby Grubz in Nigeria and Pascaline Nenda, founder of Lemana in Cameroon, are already capitalizing on this opportunity by using local ingredients to produce quality baby food. I am using it. However, infrastructure challenges such as product transport difficulties and power shortages, as well as funding issues, have hampered expansion. Despite these hurdles, both entrepreneurs are optimistic about the future of the company and its potential for innovation and growth of local baby food production in Africa.
- Climate adaptation opportunities of up to $100 billion
The private sector is playing a key role in helping Africa adapt to the increasing frequency and severity of natural disasters such as floods and droughts, according to a new study from the International Finance Corporation. The study estimates that there is up to $100 billion in potential upfront investment opportunities in Africa by 2040, or $5 billion annually.
Examples of these adaptation investments include solar-powered irrigation systems that protect crops from being destroyed by drought, and guaranteeing farmers a liveable income when yields are severely reduced by weather-related events. I have crop insurance. As African government budgets grow and fiscal space is tight, public investment is not enough to meet the continent’s climate adaptation needs, making private sector investment essential. (Keep reading:
Climate adaptation in Africa offers investment opportunities for the private sector)
- West African pineapple industry
The West African pineapple industry offers significant business opportunities due to the growing demand for fresh pineapples and related products in both local and international markets. Nigeria is the largest producer in the region, followed by Ghana, Benin, Ivory Coast and Togo. In 2019, West Africa earned around US$66.9 million from exporting fresh pineapples to the EU. Known for its long shelf life, the MD2 variety is the most popular for export, while traditional varieties such as pain de sucre (sugar loaf) are making a comeback in local and regional markets.
Jus Délice of Togo is an example of a successful company in this industry. The company manufactures pure organic pineapple juice and supplies it in bulk to European customers and from there to individual juice brands. (Keep reading:
4.Export of pineapple juice from West Africa to Europe)
However, the industry also faces some challenges. These include annual shortages of fresh produce, high production costs, and low productivity. In addition, there is a lack of well-organized cooperatives, limited access to credit and incomplete market information. In addition, infrastructure such as processing and packaging facilities, refrigeration and transportation is inadequate. 4. Zambia’s Growing Processed Food Market
Local production of processed foods, which are now imported, presents an attractive opportunity in Zambia, according to Tue Nyboe Andersen, managing director of Lusaka-based Kukla He Capital. “In processed food, I see opportunities in niche products with limited competition. Zambia is a landlocked country, so import barriers are built in. Imports have to be transported long distances. , there is a company called Meraki that makes cakes and supplies them to major retailers such as Shoprite. Its competitors are much more expensive imported products, so they are growing fast with decent profit margins. Zambia has limited food processing and many items are imported. ”
Andersen explains that the target market for groceries is not only in Zambia, but also in the neighboring Katanga region of the Democratic Republic of the Congo (DRC). Zambia provides food as there are few commercial farmers in most of her southern DRC. The market includes her 18 million inhabitants of Zambia and the Katanga region, bringing him nearly 30 million in total. (Keep reading:
Zambia-based investor highlights promising business opportunities)
5. Solving transportation and storage challenges
There are many gaps in providing transportation and logistics solutions for the agro-food industry in Africa. Rwanda, for example, has a shortage of commercial refrigerated vehicles, a potential business opportunity for entrepreneurs, according to Mark Sproston, CEO of food distribution company GET IT. In Zimbabwe, Mobility for Africa’s low-cost electric tricycles meet the transportation needs of smallholder farmers. His OX Delivers in Rwanda operates an all-terrain electric vehicle that allows customers to reserve space to transport goods in rural areas.
Demand for refrigeration and storage solutions is also high in sub-Saharan Africa, with the United Nations Food and Agriculture Organization estimating that more than 40% of his food spoils before reaching consumers. In response, African Infrastructure Investment Managers (AIIM) recently established Commercial Cold Holdings. It plans to evolve into a pan-African cold chain logistics platform with a network of temperature-controlled warehouses in key demand centers and food production regions.
Africa also has many companies that provide refrigeration solutions to small businesses, farmers and market traders. For example, Koolboks, a Nigerian company founded in 2018, offers off-grid photovoltaic units that can be used as refrigerators and freezers and can keep cool for up to four days without electricity or sunlight. increase. Koolboks incorporate pay-as-you-go technology to make their units more affordable. Another Nigerian company, ColdHubs, operates solar-powered cold rooms and offers small farmers and marketers fresh produce on a pay-per-store basis. Each unit can hold 3 tons of groceries and the customer pays 200 Nigerian Naira (approximately US$0.50) to store perishables in 20 kg crates per day.
6. Rethinkingtraditional fruit and vegetable markets
Zambia’s informal markets, where most of the fresh fruits and vegetables are sold, have few food safety measures in place and lack refrigeration facilities. These farmers also have little insight into how much their produce sells for, and little information about how much is wasted.
Savenda Capital sees this inefficient and unfair system as a business opportunity and is building a state-of-the-art fresh food market dedicated to Lusaka called ZAMBIAFresh. The market has cold and aging rooms, enforces strict food handling and hygiene standards, and uses a trading software system to offer fair prices to both buyers and sellers. ZAMBIAFresh earns a commission on every sale and encourages farmers to sell through the market with a lower and more transparent commission structure and access to cold storage. The market he plans to start trading in 2023, and Savenda Capital plans to expand the model to other countries in sub-Saharan Africa. (Keep reading:
reimagining traditional outdoor fruit and vegetable markets)
- Digital disruption in the African agricultural sector
Agtech is a promising opportunity in Africa, according to Brian Waswani Odhiambo, partner at venture capital firm Novastar Ventures. Examples of Agtech solutions include his Zowasel, a digital marketplace connecting smallholder farmers and buyers in Nigeria. iProcure is a Kenyan platform that connects agricultural material manufacturers with local agricultural traders who supply smallholder farmers. Trotro Tractor is an Uber-like service connecting farmers and tractors in Ghana, Nigeria, Togo, Benin, Zambia and Zimbabwe. Currently, the platform, which includes 65,000 farmers and 3,200 tractors, allows farmers to request a tractor within 72 hours or pre-book for a specific date, and tractor owners pay a fee. You can join the platform.
- Rwanda has a competitive advantage in horticultural exports
It could boost Rwanda’s exports of horticultural products such as mushrooms, passion fruit and chili peppers. Demand for imported mushrooms is strong in the European Union (EU) and the Middle East, with the EU importing about 323,000 tonnes a year, worth US$699 million, and the Middle East with 18,500 tonnes imported at US$100, according to a study by Manufacturing Africa. I am importing. a million. With ideal agricultural conditions and a competitive labor market, Rwanda is well positioned to produce and export specialty mushrooms such as shiitake to these markets. Fresh shiitake mushroom exports to the EU can achieve 18% gross margin at wholesale price of $12,000/ton, and dried shiitake mushroom can achieve 18% gross margin at wholesale price of $21,000/ton.
In addition to mushrooms, Rwanda has the potential to export passion fruit and chili peppers to his EU. The EU demand for passion fruit is estimated at 375,300 tonnes per year, worth US$861 million, while the EU demand for hot peppers is estimated at 1.5 million tonnes per year. Estimated $2.7 billion.