Attention on Africa’s agriculture as food becomes world’s ‘new oil’ – Standard Bank

With food expected to become the “new oil” of the 21st century, the Standard Bank Group says Africa’s agricultural output is set for explosive growth in the coming decade.

According to a research analyst at the South African-based bank, Mr Simon Freemantle, the continent’s largely untapped potential is gaining an elevated attention.

Mr Freemantle writes in his latest report in a series about key trends that will change Africa, that the “Continent’s agriculture is already among the key factors that are contributing towards a swelling interest in Africa’s natural resources.”

His thoughts were made known in a statement published on the Bank’s website.

He continues “While Africa is known for its dominant share in a number of core commodities, such as platinum, chrome and cobalt that are in great demand, agriculture is also expected to feature prominently as a key driving force in the continent’s resurgence.”

Regarding agriculture, Mr Freemantle said the opportunity is immense, adding “There could be a doubling in African agricultural output within the next decade.”

Demand for upstream products linked to the broader agri-business sector will also result, creating new economic opportunities for a range of African and international enterprises, writes Mr Freemantle.

He observes the increasing concerns about the earth’s ability to feed a population of seven billion people which according to him is expected to rise to  nine billion by 2050.

In order to feed the world’s population in 2050, Mr Freemantle opined that food production will have to increase by 70%, necessitating a total average annual net investment in developing world agriculture of $83 billion.

He says two recent and alarming global food price hikes have added to the fears. He indicated that much of the new demand for food continues to originate from the developing world’s rising and increasingly affluent population.

Mr Freemantle believes that attention will be on Africa as a result because of the continent’s abundant resources since rising demand in many emerging markets is being met with diminishing local resources such as arable farm land and water.

His thought on the diminishing local resources in emerging markets are that “In China, home to 20% of the world’s population and less than 8% of its arable land, total cropland is expected to decline from 135-million hectares today, to 129-million ha in 2020. Almost half of China’s cities face water shortages. Other areas in the emerging world are even more pressed. In 2011, Bahrain, Qatar and Saudi Arabia were ranked as three of the four most water stressed nations in the world. Already, Gulf States import around 60% of their food, and natural water reserves are able to support only 30 more years of agricultural production.”

“Given these threats, attention is increasingly turning to Africa. It is estimated that over 60% of the world’s available and unexploited cropland is in Sub-Saharan Africa. Of Sudan’s 105-million ha of cultivable land, only 16% (or 16.6-million ha) had been cultivated by 2009. A similar ratio is evident in the DRC, where less than 10% of the country’s 80-million ha of cultivable land has been cultivated. The Congo River Basin alone holds 23% of Africa’s irrigation potential, with the Nile River Basin holding a further 19%,” he said.

Freemantle however, cautions that while Africa’s agricultural allure is vast, central to the realisation of commensurate socio-economic benefits is an appreciation, on the part of African stakeholders, of how pivotal and intensely valuable this opportunity is – and to position accordingly.

By Ekow Quandzie