With the population of Africa rising and having been reported to be 1.4 billion in March 2023, there was no escape of reason as to why there should be a delay in implementing effective plans and policies to revamp agriculture. As the population grew, so did the demand and need to feed all.
The booming African agribusiness in the continent has piqued the interest of global agribusiness leaders who are looking out for ways to expand their business to the region. If you have come to this blog - we assume you are quite interested in Africa's agribusiness sector. If yes, this blog should tell you how you can capitalize on the market.
"Image Source": African Renewal
Invest in Agri-Technology: With Africa's Agri-technology gradually paving the way for investment and new breakthroughs - for companies to enter the market has become a lot easier. Thanks to the government's support. Companies who want to win in the continent's market should bring the latest technologies into practice and ease the burden of the government to feed all. In a report by Borgen Project, it has been stated that the African Development Fund approved a loan of $14.4 million, to uplift the state of African agribusiness technology. Also, the report quoted that "When it comes to agriculture technology in Africa, the sector is always evolving." To let you know, currently African agribusiness technology was valued at 2.3 billion in 2019 and revealed that it is largely untapped.
"Image Source": Hello Future
Partner with Local Farmers: Farmers are the ones who are responsible to bring food to our plates. Effectively collaborating with local farmers is a great way for companies to gain a foothold in the African agribusiness sector. The companies can know what are the needs of the farmers and what is holding them back to achieve their full potential. The company, like any other company but with a problem-solving attitude, partnered with local farmers in India and figured out their needs and immediately came up with solutions the farmers required. Company's tech stack solutions aid farmers in determining the stage in which crops are, the time of harvest, real-time monitoring and many other interesting solutions. Since African agribusiness and Indian agribusiness markets are similar, companies can crack the crux of what farmers in the region need and accordingly come up with solutions and technologies in the region. Through AAE2023, CENSA expanded in Africa and is working to address challenges and boost yields - simultaneously aiming to make Africa more resilient to tackle climate change and achieve food security.
"Image Source": One
Develop Strong Distribution Networks: One of the main challenges in the African agribusiness sector is getting products to market. Developing strong distribution networks can help companies overcome this challenge. By working with local distributors, companies can gain access to local markets and ensure that their products reach consumers in a timely and cost-effective manner. If you are a potential company eyeing a sector - understand that relying on a single distribution channel is never appreciated and poses a lot of risks, especially when we have an omnichannel distribution world. By expanding distribution into multiple channels with different areas of reach and expertise, businesses can greatly reduce this risk. If we go by example- Cargill, a global food company, pretty well known, in 2018, collaborated with a local distributor to distribute its animal nutrition products across Kenya, Uganda and Tanzania. This was surprising because a company not from Africa ended up capturing a pretty untapped market - simultaneously helping the company expand its distribution network and capture the market in maximum.
"Image Source": Borgen Magazine
Focus on Sustainability: Where the world is embracing sustainability - the African agribusiness sector is no exception. Through Kenya vision 2030, enterprises that focus on sustainable practices are likely to be more successful in the long run. This can also help companies to build a positive reputation in the marketplace and attract customers who are concerned about the environment.
One prominent example that has focused on sustainability in the African agribusiness sector is the Kenyan government promoting companies embracing sustainable practice and likewise implemented various formations to reduce waste and increase efficiency in their operations. A sum of 30-40% of the companies were able to capitalize on the market by aligning with the government's sustainability vision 2030.
Sustainability in the African agribusiness sector is being promoted by the African green program.
"Image Source": Engineering Hulk
Understand Local Regulations: Every region's rules and regulations differ and the same must be in the African agribusiness sector. Companies aiming to enter this market need to have a good understanding of the local regulations to avoid any legal issues. This includes regulations related to land ownership, trade agreements and import and export regulations only then they will be easily able to establish themselves in the region.
In essence, the booming economy would be $1 Trillion by 2030, the African agribusiness sector presents significant opportunities - the only challenge is to tap into the existing resources and technologies before your competitors. Join the 7th edition of the Africa Agri Expo, happening on 7th & 8th Feb, in Nairobi, Kenya - the region's leading and most established agriculture shows in Africa. The event helps you expand your agribusiness to the region by forging strategic relationships, business networking and effective collaboration.