Here are eight agribusiness and food opportunities, as highlighted by top entrepreneurs and investors.
1. Growing blueberries in Ethiopia for the export market. The cultivation of blueberries is one of the biggest agricultural opportunities in Ethiopia, according to Nuradin Osman, founder and CEO of Grosso Foods, an Africa-focused agribusiness company with its headquarters in the Netherlands. Thanks to its health benefits, growing global demand for blueberries presents a “huge opportunity” for Ethiopia, said Osman during the African Agri Council’s Investment Food Forum 2020. Ethiopian Airlines’ cargo division offers a large number of connections to all corners of the world, making Ethiopia a good location from which to export blueberries. In addition to blueberries, Osman is enthusiastic about the production of sunflower oil in Ethiopia.
2. Adding value to Nigeria’s cassava. Over the years, the supply of cassava derivatives or by-products in Nigeria has fallen short of demand. For instance, the demand for high-quality cassava flour for bread, biscuits and snacks is 500,000 metric tonnes per annum but supply is less than 15,000 metric tonnes. In addition, while demand for cassava starch stands in excess of 300,000 metric tonnes, supply remains below 10,000 metric tonnes, thus giving rise to a demand gap of over 290,000 metric tonnes.
3. Reliable distribution of food items to the restaurant industry. Restaurants need a steady supply of food ingredients to prepare and sell to their customers. However, in many African countries, stock availability and dependability is lacking, according to Gert Steyn, CEO of South African-based Food Supply Network, a digital marketplace aimed at eliminating inefficiencies in the food supply chain. “If your food orders do not arrive, the price is almost irrelevant. It’s crucial that the food arrives on time every day. Our numbers show this stock availability and dependability is lacking in the rest of Africa. There are various reasons for this but there is an opportunity for distributors who can supply on time without fail.”
4. Import substitution of fish in Nigeria. An estimated $600 million in fish is imported into Nigeria every year. According to Danladi Verheijen, managing partner of private equity firm Verod Capital Management, there is an opportunity for the local production of fish products. Verod has invested in the Shaldag fish farm, which grows fish at over 40 times the density of other local fish farms by using modern technology in its operations. The company produces processed, smoked catfish under the Shaldag brand. Says Verheijen: “There are villages in Norway where the entire economy is based around growing a particular type of fish (stockfish) that is sold to Nigeria, and used in sauces and soups. Trawlers from Southeast Asia also fish in the waters outside Lagos and Accra, process the fish in their own countries and then sell the same fish back into Africa. Obviously, this is inefficient and creates an opportunity for African businesses.”
5. Supply of trustworthy agricultural inputs to Ugandan farmers. “One subsector I’m enthusiastic about is agricultural inputs – such as seeds, fertiliser and pesticide – that are critical for food security in East Africa,” says Dr Edward Isingoma Matsiko, managing partner of Kampala-based Pearl Capital Partners, a fund manager that invests in agribusiness enterprises in East Africa. “We have seen fake inputs in the market; things like imported fake fertiliser and chemicals, even fake seedlings. Here in Uganda, for example, some farmers planting avocado seedlings won’t know if those seedlings are viable until four years later when it is time to harvest, meanwhile they’ve invested all their savings in that crop.”
6. Untapped opportunities in DRC. Through its African Food Fund, specialist investment manager Silk Invest has invested in a Nigerian restaurant business, a confectionery producer operating out of Cairo and an Ethiopia-based biscuit manufacturer. When asked to name an African country that offers untapped investment opportunities, Silk Invest CEO Zin Bekkali responded as follows: “One country we would possibly like to add to our focus is the Democratic Republic of Congo (DRC). We feel the DRC is under-highlighted in many ways but offers strong prospects. It is a huge country with relatively good physical infrastructure in some areas compared to other African countries. International remittances have contributed to the country’s improved economic stability in recent years. To give an example, the high-end French bakery Eric Kayser has opened several locations in Kinshasa. If Eric Kayser is in the DRC, that tells you something, right? I’ve been there and it is an interesting place to look at for our second fund.”
7. Export of high-value, niche vegetables from Rwanda. Laurent Demuynck, founder and CEO of Kigali Farms, says Rwanda is ideal for the cultivation of certain high-value vegetables and fruits for export to other East African nations. “I believe there is a future for good quality, organic and intensive horticulture in Rwanda. Owing to its proximity to Kenya – where there is a lot of purchasing power – I think it is a great business idea to set up the production of high-value crops. In terms of the product, it would likely be something like speciality or niche vegetables that you cannot find on the shelves, not even Nairobi – produce you can sell for a decent price because it is not yet a commodity product.”
8. Rice cultivation in Nigeria. Nigeria is a major rice grower but doesn’t produce enough to meet domestic demand and therefore has to import a fair amount. There is an estimated 2.5 million-tonne shortfall between local supply and demand for rice. Mezuo Nwuneli, managing partner and co-founder of Sahel Capital, sees rice cultivation as a significant opportunity. “If you look at consumption dynamics in Nigeria, it’s effectively gone from minimal consumption of rice in the early 1980s to roughly seven million tonnes annually today,” he says.