Sowing the seeds of success in Africa

Many Irish companies and agencies are looking at ways to improve Africa’s agricultural industry

Talk to anyone in investment circles and Africa is likely to emerge as a topic of conversation. Perceived by many as the forgotten continent, Africa has recently emerged on the global consciousness as a potential site for investment, particularly for the agriculture sector.

Last March the first €2 million Africa Agri-Food Development Fund was launched by the Department of Foreign Affairs and Trade and the Department of Agriculture, Food and the Marine. Aimed at encouraging private sector investment into Africa, it reflected a broader shift in focus for Ireland’s development strategy towards trade and investment as well as aid.

Many Irish agriculture and food companies have already made inroads into Africa. Glanbia, for example, has a joint venture with PZ Cussons in Nigeria, while Kerry Group has significant commercial interests, with a number of sites in South Africa, as well as a partnership with Concern to develop the nutritional attributes of agricultural production in Zambia.

The Irish Dairy Board has already identified Africa as a major market for Irish food produce. Tonnes of Irish dairy products, including milk powder are shipped into Africa each year, with Algeria now the second biggest international consumer of Irish cheese anywhere in the world. According to Bord Bia, Irish food and drink companies export around half a billion euro worth of product into Africa.

Two-way trade

But while the investment and market potential for Irish producers is increasingly being identified by companies here, the relationship is two-way. Many Irish companies and agencies are looking at ways to improve and develop Africa’s own agricultural industry.

While the continent’s vast mines and mineral deposits are its major resource, agriculture is the backbone of the domestic economy – accounting for around 70 per cent of employment and about 30 per cent of gross domestic product (GDP) in sub-Saharan Africa for example.

But while it produces a major portion of the world’s commodities, agricultural production in the continent remains at a subsistence level. Even the agricultural products that are shipped out of Africa – fruit, vegetables, cocoa, spices – are moved as bulk commodities, with most of the value-adding activity, such as processing and packaging, taking place elsewhere.

Ugandan example

Coffee and chocolate are two examples. While Africa produces most of the world’s cocoa, little manufacturing or processing takes place locally.

Uganda encapsulates this dilemma. Located in the heart of Africa bordering Lake Victoria to the south, Uganda has emerged from decades of instability to embrace democracy. While the recent aid scandal, which uncovered misappropriation of donor funds in the office of the prime minister, and the proximity of the recent troubles in neighbouring Democratic Republic of Congo (DRC) has exposed challenges facing the country, Uganda is slowing moving towards a sustainable economic growth model.