Top Investment Opportunities in Africa

Africa has a global comparative advantage in agriculture, being home to more than half the world's agriculturally suitable and highly unused land, resources and its vast water resources have hardly been tapped.  60% of the world's uncultivated land is in Africa, while the continent is only responsible for 10% of the world's agricultural produce.   Agriculture as an untapped investment opportunity is set to be a major growth driver over the next few years, surpassing mining and metals.  Southeast Asia has become competitive and expensive for doing agribusiness; it's time for Africa to take advantage of this opportunity.

According to the 2015/2016 RMB report, governments are underinvesting in the agricultural sector, especially in terms of the shift from subsistence farming to agro-processing.

Countries exploring the advantages of agro-processing include Uganda.  The majority of Uganda's agricultural products such as tobacco, fish, and coffee are exported in their raw form.  Also exploring the untapped agriculture sector is Ethiopia which is known to have some of the most arable land in the world.  Ethiopia spends more than 25% of its budget on agriculture.  As the backbone of Ethiopia's economy, the sector represents around 50% if GDP and over 85% of export revenues and employment opportunities.

The production of sugar has rendered many African countries economic growth.  Sudan is currently reported the biggest sugar producer in Africa, being 25th in the world, followed by Ethiopia (27th), Kenya (33rd) Uganda (43rd) and Tanzania (45th).

Economic development is inherently linked to technological innovation.  And technology has made a distinct impact on the agricultural sector, particularly the growing subscription and connectivity through mobile phones.   These provide real-time market prices of crops, instant weather information, and easy to access micro-insurance and financing, helping small-scale farmers increase their yields and skills.

At the forefront of this innovation is Kenya, in its outstanding pioneering in mobile technology in Africa.  An examples of innovation in agriculture is M-Farm, a web platform that provides 14 000 registered farmers the opportunity to buy and sell their crops, seeds, fertilizers and such inputs together.  Farmers earn more for their crops and bulk buyers and sellers save in the reduced number of farms visited.

Source: Top Investment Opportunities in Africa