Investment in Africa is spurring economic innovation and growth throughout the continent. There’s no question about that for the U.S. Secretary of Agriculture Ed Schafer.
“Make no mistake about it,” Schafer said. “Investment in agriculture, investment in the structure of agriculture to move food to the market, is an investment in Africa’s future.”
Schafer urged private sector investors to build stronger partners and markets in Africa at the 2008 U.S. Africa Agribusiness Forum Friday. The ag secretary said in order to truly develop a successful farm to market infrastructure in Africa, the private sector must get involved. Schafer pointed out that much of Africa lacks the basic fundamentals needed for thriving agriculture markets. He said things as simple as storage, refrigeration, a consistent supply of electricity, expertise in where to sell and how to sell simply don’t exist in many African regions. (more…)
The poorest of Africa spend 70 percent of their income on food. That’s the reality the Deputy Assistant Administrator for the U.S. Agency for International Development Africa Bureau put before the 300 attendees of the 2008 U.S. Africa Agribusiness Forum this week. That’s the reality that Franklin Moore wants the public and private sectors in the U.S. and Africa to face. Franklin says Africa’s food problems are a part of a worldwide problem.
“The world’s in the midst of a global food crisis unlike any other food crisis,” Franklin said. He says the poorest one billion are living on just one dollar a day, while nations around the globe are experiencing high food prices. That means, he says, the poor are having to choose between food, health care and school. Franklin says a significant part of the global population is spending more than half their income on food. And again, in Africa, he says, the poorest are spending 70 percent of their income on food.
All this, Franklin says, is the result of “fundamental imbalances in supply and demand, particularly of major food staples.”
Franklin says the good news is, correcting these imbalances opens up a wide spectrum of opportunity to transform and help modernize African agricultural systems through private investment. Not just private though. Franklin urges companies and governments to work together and engage in public private partnerships in an effort to reduce global hunger.
During his speech at the forum in Chicago, Franklin talked about what the U.S. in particular is doing to help this effort. He also outlined food crops that are crucial to the African food supply and where and how he sees public private partnership can make a real difference not just in African agribusiness but in the African quality of life. Franklin says the African demand for food staples is $50 billion a year and that demand is expected to double by 2015. Plus, he adds, Africa is the most rapidly urbanizing continent on the planet.
There are solutions to this global food issue though and Franklin urges companies to rise to the challenge. Franklin outlined many specific solutions in his speech. You can listen to it here:
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The Millennium Challenge Corporation is an organization dedicated to reducing poverty worldwide. Ambassador John Danilovich, CEO of MCC, says a large part of the MCC mission lies in Africa. He says the MCC is partnered with 17 countries around the globe in an effort to reduce poverty through sustainable economic growth. Ten of those countries are in sub-Sahara Africa, drawing in 70 percent, or 4.2 billion, of the 6 billion dollars in grants MCC has to offer.
The ambassador says he’s proud of the opportunity the MCC has to play a large role in the development of agribusiness in Africa.
“African countries continue to convert their great promise into an engine for sustained socio-economic growth. It’s exciting to see the positive change,” John said.
John added that he believes Africa possesses a strong entrepreneurial spirit that is fostering dramatic reforms and new opportunities for investment and growth throughout various sectors of the African economy.
The ambassador spoke at the 2008 U.S. Africa Agribusiness Forum. You can listen to John’s entire presentation and a follow up question and answer here:
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The energy sector is, as Nigeria’s Honorable Peter Odebunmi puts it, “the bane of our non development.” Peter is a Representative of the Federal Repbulic of Nigeria. He says Nigeria lacks an adequate energy supply, which increases costs and makes domestic goods uncompetitive in the global market. That’s why, he says, President Umaru Musa Yar’Adua plans to declare a state of emergency within Nigeria’s energy sector. The hope, Peter says, is to drive more investment in the country’s energy resources.
Water is one resource of particular importance for Peter. He explains Nigeria is not properly managing its existing dams. Peter says his country needs to develop its water infrastructure because Nigeria’s access to safe water is still considerably low. He adds that a working water infrastructure is key to developing African agriculture and empowering the African people.
The 2008 U.S. Africa Agribusiness Forum is meant to facilitate such development. Peter says representatives from countries all across Africa are met with public and private investors in Chicago to learn how American agribusiness works and apply what they learn in Africa.
Peter says, right now, Africa faces constraints in technology and financing because members of parliament, or Nigeria’s representatives of the people, do not have access to what he calls “elitist” information. Information, he says, that reveals how to attract foreign investment.
Producing surplus and exporting that surplus is one of the key concepts Peter says he has learned more about during the forum. Peter want to take the concept of value-added agriculture to Nigeria, encouraging local, family farmers to produce a surplus so Nigeria can increase its exports.
I spoke with Peter during the forum. You can listen to my interview with Peter here:
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Changing the African vision from one of short-term pay-offs to that of long-term success was one of the key issues for panelists at the “Education and Knowledge Building in Animal Agriculture” breakout session. The session was one of fifteen being offered at the 2008 U.S. Africa Agribusiness Forum. The workshop, sponsored by Novus International, featured a panel of experts that addressed the needs and means for improving education and first-hand know-how for creating “robust agribusiness value-chains” throughout Africa.
And, robust agribusiness in Africa is a very real possibility offering real opportunities if you ask Dr. Jerry Nelson. Jerry is a professor of plant sciences at the University of Missouri-Columbia and served as the panel moderator.
“Africa probably has the most agricultural potential than anywhere we’re looking at right now,” Jerry said.
Thad Simons, the president and CEO of Novus International highlighted the ultimate goal: “providing safe and secure food all over the world.” He added that performance and sustainability were critical for realizing that goal.
The panelists looked at how to drive that performance and sustainability in Africa. Sergio Beliver, sales manager for Europe, Africa and Middle East at Novus International, stressed the importance of education. He said Africans need to be educated not only in the processes, management and technology needed for modernizing Africa’s agricultural industry but also in long-term vision. He says farmers need to be taught to recognize the value in a more secure future instead of looking for quick pay-offs in the present. That’s something Dave Harlan, director of Global Animal Health & Food Safety at Cargill Inc. also stressed.
“It’s not about capturing a high price, but locking in a price that people can live on,” Dave said.
Dr. Shaukat Ali Abdulrazak, secretary National Council for Science and Technology in Kenya, also echoed Sergio’s call for more education. Shaukat said his country needs personnel that is both educated and trained in modern farming techniques, management and the development of necessary infrastructure. He conceded that one major challenge is “short-sighted politicians” who only consider programs that fall within the parameters of the term they serve in parliament. He says politicians in Kenya tend to have an agenda that expire when their term expires.
But, Shaukat says Kenya does have government initiatives and national development plans that should attract investors. He stressed that leaders in the public and private sectors of both the U.S. and Africa need to work together to build off of the positives that already exist. Shaukat says leaders and experts need to “make lemonade out of the lemons we have.”
Tasir Olawale Raji, the permanent secretary with Lagos State Ministry of Agriculture and Cooperatives, agreed. He said its crucial for African countries to move with other developing countries throughout the world, so Africa won’t be left behind. And, to do that, Tasir said leaders and experts need to focus on those that are already on the job in Africa, building upon “already acquired experience.”
Jerry highlighted the critical agricultural “lemons” so-to-speak that countries throughout Africa need to work on including land, water, electricity, energy and marketing. Jerry said African countries must develop the needed infrastructures and the continent’s agricultural industries must exists within those infrastructures. The continent should work as a larger unit to develop a strategy planning mission with each country, Jerry said, offering its own unique approach and contribution.
The entire panel discussion is available here on AgWired.com. You can listen to the discussion in two parts here:
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There is money to be made in Nigeria. Dr. Isa Yugada, Executive Governor of the Bauchi State in Nigeria assured every potential investor of that at the 2008 U.S. Africa Agribusiness Forum. Isa highlighted Nigeria’s natural habitat for a diverse selection of crops including tomatoes, sorghum, maize, millet, rice, cassava, beans and more. He added that Nigeria possesses poultry, livestock, fish and timber industries and already produces a surplus in certain cash crops including sugarcane, cotton, ginger and sunflower.
Isa acknowledged that there are challenges and risks involved with investing in Nigeria, but he says he believes those risks and challenges are no different than those investors would find in any other country in any other sector.
“I don’t believe that there is any country that does not have risks or there is business that you go into that does not have risks,” Isa said.
Nigeria is also in the development stages of a new dam. Isa said the dam that his country is currently planning would be the biggest dam in Africa at eight km in length. He said this dam would make over 140,000 hectares of land available for farming through irrigation.
Isa urged investors to take advantage of the opportunities Nigeria has to offer in agribusiness. He assured businesses of both the public and private sectors that Nigeria is an emerging environment for investment and agriculture.
You can listen to Isa’s remarks here:
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Stock exchanges provide a platform. A platform that Chris Sturgess, assistant general manager of the Agricultural Products Division of the Johannesburg Stock Exchange, says helps with price discovery and price risk management. He says Africa needs such platforms. At the same time though, he stresses that stock exchanges do not set prices.
Chris presented at the opening session of the 2008 U.S. Africa Agribusiness ForumYou can listen to Mbaye’s remarks here:
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Mbaye Diop Sarr represents the West African business sector as the general administrator for the West Africa Commodity Exchange. For Mbaye, direct market access for producers is critical for the development of African agribusiness. He says Africa needs to drive competitiveness to fulfill industrial needs. He adds that Africa needs to embrace commercial partnerships among the various countries within the continent.
Mbaye presented at the opening session of the 2008 U.S. Africa Agribusiness Forum. You can listen to Mbaye’s remarks here:
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There are a lot of issues that need to be addressed in African agribusiness and Ian Goggin, CEO of the Agricultural Commodity Exchange for Africa, wasn’t afraid to highlight each and every one. Among the negatives in the African agribusiness sector Ian identified during the 2008 U.S. Africa Agribusiness Forum:
- Very little reliable data on trade flows
- Lack of competition
- Poor communication
- Lack of transparency
- No enforceable contracts or dispute resolution
- Lack of trust in the current system
Ian even pointed out that some have called Africa’s ag industry: “the most inhospitable climate in the world.”
Ian’s straightforwardness is not meant to discourage, but simply to identify where the industry needs improvement, so those in the business find the best way to develop and modernize. If anything, Ian’s blunt presentation of where African agribusiness stands is meant to inspire both African and American ag industry leaders to initiate needed change. He stresses that “exchange is an agent for change.”
You can listen to Ian’s remarks here:
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The CME Group claims to have ideas that change the world. And, that’s precisely what CME Group Vice Chairman Terrence Duffy says the 2008 U.S. Africa Agribusiness Forum is helping to facilitate: ideas that are changing the world.
The CME Group is a combined exchange entity formed from the 1997 merger of the Chicago Board of Trade and the Chicago Mercantile Exchange. Terrence spoke at the forum introduction this morning in Chicago, discussing how to shape the future of African Agribusiness.
“This venue provides an important opportunity to discuss the forces that are reshaping the development of ag markets around the world including in Africa,” Terrence said.
Terrence reminded attendees that increased demand for food at a time when food is in limited supply is pushing up world commodity prices. And that, he said, highlights a global need.
“Higher commodity prices are telling us one important thing: the world needs more food,” Terrence said.
Calling for investment, innovation and infrastructure, Terrence stressed his belief that despite marked challenges in the African agricultural industry, there are tremendous opportunities to develop the continent’s ag community and bring it to a global level.
Last year, agriculture generated one third of Africa’s gross domestic product, yet, Terrence pointed out that Africa is a net importer of agricultural commodities. Terrence says Africa needs to develop local markets and gain access to global markets. He adds that now is one of the most exciting times to be involved in agriculture. But, he says, the U.S. and Africa need to work together to improve the agricultural industry on a global level.
“At a time when the world needs more from agriculture, we need africa to reach its potential and become a partner in the global commodity production,” Terrence said.
You can listen to Terrence’s opening remarks here:
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Agriculture is an industry in Africa that’s poised to flourish… if the U.S. would simply get involved. That’s what the Corporate Council on Africa believes and that’s why it’s hosting the
2008 U.S. Africa Agribusiness Forum in partnership with the World Trade Center Illinois.
CCA President and CEO Stephen Hayes says his organization has been the voice for the vision of American and African commerce for 15 years. Often times, Stephens says, his organization has been the lone voice. Established in 1993, the CCA now consists of 180 major corporations that represent more than 85 percent of all U.S. foreign direct investment in Africa. But, Stephen explains, the CCA is not just made up of large corporations. A third of the companies involved with the CCA are small businesses involved in Africa.
Now, Stephen says, its time for America and Africa to work together in developing and modernizing the agricultural sector within Africa.
Stephen’s opening remarks officially kicked off the activities of the first U.S. Africa Agribusiness Forum. You can listen to Stephen’s introduction here:
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People from all walks of life, as World Trade Center Illinois Agribusiness Director Chuck Hartke puts it, are gathering in a first-of-its-kind forum in Chicago this week in an effort to grow agricultural exchange and commerce between the U.S. and Africa. Chuck says the 300 participants of the 2008 U.S. Africa Agribusiness Forum have come together to explore how America can play a key role in developing rural agriculture in Africa.
African countries are asking for help and Chuck says the American Midwest, particularly Illinois, possesses the resources to help. Chuck says the top of the line production facilities, quality food products, machinery and equipment available in the Midwest are an example of what’s needed and what’s achievable throughout Africa.
Chuck explains that a continent that’s four and a half times the size of the U.S., with ample fertile land, has the untapped potential to not only solve its own hunger issues, but become a global player in food commerce.
Right now, though, Chuck says the reality is a continent of 900 million African people who, as a majority, aren’t even able to feed themselves. But, he says this forum is meant to spark dialogue and courtship that spans the Atlantic Ocean.
Chuck says Africa represents a huge portion of land that’ s not contributing to the global food source and its time for the U.S. and Africa to work together to capitalize on the economic opportunities for agribusiness between the two nations.
I spoke with Chuck during a break from this morning’s sessions and workshops. You can listen to my interview with Chuck here:
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The Corporate Council on Africa wants U.S. investors to realize their potential in African agribusiness opportunities. That’s why the CCA is showcasing the African food value-chain at the 2008 U.S. Africa Agribusiness Forum. The CCA wants public and private sectors alike to cross borders and bring “farm to fork.” I’ll be covering the forum here at the Hyatt Regency in Chicago throughout the day Thursday and Friday.
Highlights of the Forum will include industry-specific sessions, panels to address cross-cutting issues, such as finance product innovation, pharmaceutical and biofuel industry growth, carbon trading, production technology, and certification; as well as networking opportunities. Industry experts will share best practices and the latest trends in the field.
These are a few examples of how the 2008 U.S.-Africa Agribusiness Forum will help companies gain the competitive edge on investing in Africa by becoming more knowledgeable about the African agribusiness marketplace.
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