Categories: Business Plans

Top Five Most Promising African Countries For Agribusiness Investments

Top Five Most Promising African Countries For Agribusiness Investments

Agribusiness is one of Africa’s most promising industries. Despite the fact that the industry receives little to no attention from mainstream investment channels such as banks and private equity firms with the exception of microfinance organizations.

The shunning away of substantial investments into the African agribusiness industries is due in large part to the following factors:

The majority of African countries don’t have a good track record in agribusiness.

The majority of workers in the African agribusiness industry have not passed the primary level education.

Agribusiness policies enacted by the government keep changing with each successive elected government.

Despite the above-stated challenges among others, the African agribusiness industry is far from achieving its full potential. But, as cited by Ventures-Africa, the following African countries show a greater potential in agribusiness investments.

Côte d’Ivoire

This West African country has proven to be quite resilient, given the fact that barely half a decade ago, it was involved in a devastating civil war. Be that as it may, the country still holds the title of the world’s leading cocoa producer. The country produces cocoa mainly for export with little to no value addition processing being done within its borders.

Related: Zambeef CEO, gives tips on running a successful business in Africa.

This might soon change, given that there are already some few chocolate companies that are warming up to the idea of setting up local chocolate companies. In order for this to happen, the country needs some foreign investments, which is yet to happen. Côte d’Ivoire also produces the following cash crops; cashew nuts, palm oil, and coffee.

Ethiopia

By all rights, Ethiopia is an East African agricultural hub; it recorded a 10.6% GDP growth in 2014 and experts forecast 2015 GDP to reach 11%. Ethiopia is a top coffee producer and exporter, but much of its coffee export’s value is lost due to shipping raw coffee beans. The country needs to redesign local coffee production system and start packaging its coffee under the emerging local coffee brands.

This will take the country a long way in pushing for high return on investment to local coffee farmers and industries. However, big names in the coffee industries like Starbucks and Dean & DeLuca are showing big interest in the country’s coffee production industry. The country also produces oilseeds, spices, and grains, said to earn the country about $750 – 800 million in export trade.

Like most other African countries, their biggest undoing in export trade, is that they export their agricultural produce as raw materials. This works against African countries given the low international prices for raw products when compared to value-added processed products.

Tanzania

Tanzania is a major producer of coffee, tea, and oilseeds. But unlike Ethiopia, which has given a lot of large-scale land concessions to foreign investors like Saudi Arabia. Tanzania has put in place strategic policies that give more advantages to local farmers and leading to their empowerment. The country is also the ideal location in Africa to produce the largest supply of food to the global market.

However, the country’s full agribusiness’ potential is hampered by the lack of large-scale training schemes backed by government support. But on a more promising note, the country is better positioned to establishing its local processing and packaging companies, given that already there are a number of local companies carrying out such service.

Related: Things you should know before launching your business in Africa.

Honorary Mentions

Malawi: The country has a favorable environment for caring out agribusiness, which has been predicted to grow by 6% for the year 2015 and 2016. However, the country’s political affairs remain the biggest threat to this country’s prospects of thriving. Malawi is also struggling to find a currency baseline and investors are concerned about the country’s economic policies remaining constant given the political turmoil in the country.

Cameroon: It has the advantage of being surrounded by countries that need its exports; Nigeria, Chad, Gabon and Central African Republic. Agriculture makes up to half of its non-oil export income and is being forecasted to grow by 4% for the year 2015 and 2016.

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Milicent Atieno

Proud Kenyan Citizen, loving everything Tech related.

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