Africa has a market size worth over $900 billion

As opposed to the tag of poverty that is traditionally slammed on Africa, Africa is a rich continent, richer than people think. Africa Wealth Cheque Report, launched recently by Africa investor (Ai), a leading international investment research and communications group, in partnership with The Africa Group (TAG)., an Africa-focused consulting, research, and advisory firm, has revealed.

The report says Africa is similar to any other private investment investors must take on risk to pursue an addressable market opportunity. It says Africa is unique because incremental dollars invested into Africa will begin to unlock a previously inaccessible market of equal or greater size than Africa today.

The Wealth Report has identified US $1.671 trillion of potential wealth and additional production potential in six key sectors (agriculture, water, fisheries, forestry, tourism and human capital). This represents a combined market size today of $909 billion and $762.4bn of additional potential production. The report also estimates current proven stocks of extractable energy resources in Africa (oil, natural gas, coal, and uranium) to be worth between $13-14.5trn.

Explaining the Africa Wealth Cheque Report, Hubert Danso, vice chairman and managing director of Africa investor, said: “The aim of the Africa Wealth Cheque Report was to identify and estimate how much natural, economic and human capital wealth is within the continent, in essence to quantify the beginnings of the asset side of Africa’s balance sheet.”

And on the importance of the report, Danso went on to say, “The report is unique as it is already catalysing debate about how wealthy as opposed to how poor the continent is, and signaling tipping points for African governments and global investors seeking growth opportunities.”

Africa investor-TAG says there is nearly three times the average multiple growth potential in the agriculture sector, stemming from projects such as the $780 million Zambezi Integrated Agricultural-Community Development Programme, forestry (to $111bn) and fisheries (to $44bn), and a doubling of the market for water to $25bn and that an additional $217bn may be spent on human capital inputs, in terms of wage return growth across the service, industrial and agricultural sectors.

This report should serve as a wake-up call for Nigeria. Nigeria ranks 20th on the 2006 Global Hunger Index. About 65 per cent Nigerians are food insecure that is insufficient access to the amount and variety of food for a healthy and productive life. Malnutrition is widespread: About 40 per cent of children fewer than five are stunted, 9 per cent are wasted and 25 per cent are underweight. Micronutrient deficiencies in vitamin A, iron and iodine are also widespread.

This food insecurity and malnutrition is as a result of our inability to exploit the full national agricultural potentials. Nigerian agriculture is dominated (about 90 per cent) by its over 14 million smallholder farmers. The average yields of major staple crops remain far below most of the other developing countries.

Nigeria agriculture is mainly rain fed and has not taken full advantage of its irrigation potential estimated at between 2 and 2.5 million hectares. The area under irrigation is officially estimated at about 220,000 hectares, or less than one per cent of the total area under crops. The contribution of irrigated agriculture to crop production is therefore very small. And our potential is largely untapped. The solution therefore, is to tap to the fullest our agriculture potentials. We have an advantage over the developed world on this issue. They have tapped their potentials almost fully if not fully.

The Alliance for a Green Revolution in Africa (AGRA) and the International Center for Soil Fertility and Agricultural Development (IFDC) are concerned this Nigeria’s problem and are out to help out. This is an opportunity Nigeria must not let go.

A recent Alliance for a Green Revolution in Africa (AGRA) document which has to do with its partnership with some UN agencies for boosting food production in Africa, says per capita food production has declined in Africa for the past 30 years and farm productivity in Africa is just one-quarter the global average. It says today, more than 200 million people are chronically hungry in the region, and 33 million children under age five are malnourished. The document says for AGRA, to turn things around, there is need for urgent focus on raising agricultural productivity; more investment is needed to improve soil and water management of rain fed and irrigation agriculture, more adaptable new crop varieties, improved access to seeds and fertilizers, environmentally sustainable integrated pest management practices, reduction in post-harvest losses, and improvement of rural infrastructure, especially roads and communication infrastructure. The document argues these will need to be bolstered by bold pro-poor policies to help transform smallholder agriculture.

There is even a greater potential in the area of animal husbandry that Nigeria can explore and fly with. The meat/dairy industry sub-sector is a case in point. The raw materials in this industry are the cows. The quality of cows we have in Nigeria is so poor. According to Emmanuel Ijewere CEO of Best Foods which is involved in the business of rearing cows and slaughtering for sales, Nigerian cows are tough, they are under fed. The meat content is small. The yield is about 36/37 per cent when in Namibia, it is about 62 per cent yield. In Europe it is about 64 per cent. It is a very terrible situation. The breed has been ill-bred for so long but no serious effort has been made.

He says in a country like Cameroon which is next door, Cameroon has a law – every local government must provide grazing lands and water holes. He says that is why you do not have this continuous fight between farmers and cattle-rearers like is common with Nigeria where they are fighting and killing each other.

The potentials are there. All we need is fattening of cattle and then creating new breeds.

The Zimbabwean white farmers in Kwara State brought in specially bred dairy cattles for milk production at N500, 000 per one. Why must they bring in cattles at such impossible prices when they can import cattle semens at a cost-effective price for artificial insemination?

And talking about dairy milk, stakeholders in the industry are currently involved in a battle of wits regarding alleged government plan to ban importation of powder milk. Fresh milk manufacturers are pushing for a ban whilst those who import powder milk for reconstitution to various dairy products are saying ‘no’ to the ban. According to industry sources, the investment outlay for fresh milk production is robustly high and cannot immediately be met. Moreover, the infrastructure such as power, water, etc, and the required cows for the project are not available and affordable.

But the fact remains that the dairy sector has great potentials, one that is in consonance with the Africa Wealth Cheque Report in question here. The estimated milk consumption in Nigeria for 2010 is put at 1.45 billion litres. The number of dairy cows required to produce 1.45 billion litres of milk per annum is 243 000 cows producing 20 litres per day (6000 litres per 300 day lactation). A document obtained from the industry gives extrapolated cost for producing 1.5 billion litres of milk as $1.32 billion (N196.2 billion) for initial set capital and $2.18 billion (N323.0 billion) for running cost – for farm size of 500 hectares. Total hectares required to produce 1.5 billion litres of milk was put at 300,000.

Other requirements given include 544 Farms each housing 500 cows; water requirement per cow – 30 litres / cow per day (non lactating); 60 litres / cow per day when lactating with 20 hectares of pasture irrigation (210 litres water per litre milk produced).
Concerned stakeholders do not see how the funds required for of all that are stated above can be met now. What do we do then? The obvious option then is that the door should be open for milk importation for the time being whilst government should make a bold move to sort out the issue of infrastructure and allied needs for growing a robust dairy industry.

In this connection, it will be necessary to address the issue of timely and economic allocation of approximately 300 hectares of suitable land in areas appropriate for high yield dairy; development of capability in terms of competent farmers and technicians; researching into most suitable varieties of cattle especially now that there is a global shortage of dairy stock and when breeding for significant new stocks can take several years; veterinary support, training and development of required animal husbandry skills. The issues of subsidy and funding must be squarely addressed too.

Isn’t Africa, and by extension, you, rich? Yes we are, potentially though.

Written by
Siaka Momoh
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