Private Equity

private-equityAgriculture industry is the backbone of the continent on production of food and income for Africans; the industry provides at least 70% of all jobs on the continent. A vibrant, sustainable and resilient agriculture sector is what Africa needs for an economic secure future. More than 65% of Africa’s 1.2 billion people live in rural areas, in some of the most expansive lands in the world Agricultural experts note that more than 60% of the world’s arable land is in Africa, but less than 40% of which being actively utilised.

Fact is, Africa’s economy is inherently dependent on agriculture and it comprises about 25% of the continent’s gross domestic product. Conversely, agricultural productivity still remains far from the ideal standards. Over 90% of agriculture in the continent depends on rainfall, with minimal artificial irrigation used. Costs of production is also ridiculously high in the continent that most governments do not
provide incentives to their small holder farmers, making their produce very uncompetitive in the world market. Further, access to farm implements like fertilisers, pesticides and high-yield seeds is limited. Infrastructural problems such as access to roads, water, markets and financing is also a challenge.

African governments have always been pressed with the millennial challenge of harnessing the continent's agricultural wealth and provide the much needed food security for the African population. Agriculture is at the core of African governments’ agenda for reducing poverty and boosting economic growth. When agricultural opportunities are cultivated, it ensures sustainable food production and
security. Most African scholars hold the view that the transformation of agricultural promise, holds the greatest potential for economic prosperity.

Africa spends an average of US$40bn on food imports annually from western countries with less arable land, and not favourable climatic conditions comparative to Africa. On the same vein, intra Africa trade accounts for about 12% of total trade as opposed to over 68% in western countries. The right set of policies and investment, could revert this situation. Africa could replace these imports with their own
produce, which would in turn reduce poverty, enhance food and nutrition security and provide sustainable growth to the respective societies.

Studies indicate a strong correlation between agricultural growth (including the entire value chain) and decrease in poverty. African governments can improve their agricultural sector and use it as an engine of economic growth and increase the chances of a country to ignite a virtuous circle of growth fuelled by agriculture.

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