World Grain - February 2019 - 6

FROM THE EDITOR

Can grain be 'the
new oil' in Africa?
EDITORIAL STAFF

n recent years, agribusiness analysts
have predicted that agricultural commodities could become "the new oil"
in Africa, a continent with a booming
population, a growing economy with
potential for even greater expansion,
and 60% of the world's uncultivated arable land. This all adds up to an incredible opportunity.
"Understand that by transforming Africa's agriculture sector, it will become
the engine that drives Africa's economic
transformation through increased income, better jobs higher on the value
chain, improved nutrition, and so on,"
said Jennifer Blanke, vice-president of
Agriculture, Human and Social Development for the African Development
Bank, at the African Investment Forum
in November 2018 in South Africa.
This transformation will require a
shift from subsistence farming, which
currently accounts for about 65% of the
continent's agricultural production, to
more advanced agribusiness endeavors
such as high-tech commercial farm operations and ag processing industries capable of creating good-paying jobs that
will grow Africa's middle class. Facing
critical issues such as water availability
and poor infrastructure, it will require
partnerships between governments and
the private sector, African countries and
their neighbors, and Africa and its development partners.
Accomplishing this goal won't be
easy, nor will it be inexpensive. No
continent faces more demographic, economic, environmental, social, and political challenges. Some analysts estimate
it may take up to $45 billion per year
- current annual investment is around
$7 billion - to harness the power of agriculture in Africa and grow the value
chain to create jobs and wealth. If this
goal is realized, it is even possible Africa could become a net exporter of agricultural commodities years from now,
replacing $110 billion worth of imports,
as well as doubling its share of market
6

value for select processed commodities.
Some international companies such as
U.S.-based Seaboard, which has operDWHG ÀRXU PLOOV LQ (DVW$IULFD VLQFH WKH
1960s, understand the challenges and opportunities that are involved in running a
successful business on that continent.
"You have to be patient, well capitalized and understand that any one year
could be dramatically different from
another year because of political events,
market conditions, or currency issues,"
Dave Dannov, president of Seaboard's
overseas trading group, told World
Grain last year.
It would seem Africa's milling industry
LVSRVLWLRQHGWRÀRXULVKLQFRPLQJ\HDUV
Over the last 10 years, while the population has grown by 32%, wheat imports
have increased by 68% as eating habits
shift from corn- to wheat-based foods.
Among those responding to this trend is
Switzerland-based Bühler, a manufacturer
of milling equipment, which opened the
African Milling School in 2015 in Nairobi, Kenya, to help provide milling companies with highly-skilled workers.
One way or another, Africa will need
grain in the coming years - and lots
of it. Not only is it the fastest growing
continent, with demographic experts projecting Africa will account for more than
half of global population growth in the
next 30 years, it is also the second fastest
growing economy behind South Asia.
The question is where will most of that
JUDLQEHVRXUFHG":LOOWKH(85XVVLD
the United States and
others remain its largest
suppliers, or will commercial farming and
agricultural processing
LQ $IULFD ¿QDOO\ EORVsom and push the continent closer to having
a zero balance in grain trading or even a
trade surplus?
Arvin Donley
(GLWRU

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WORLD GRAIN (ISSN 0745-8991) Volume 37, issue 2,

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World Grain - February 2019

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