The recently released 2017/2018 PwC (PricewaterhouseCoopers) Africa Agribusiness Insights survey found that CEOs and owners of such agribusinesses reported “inefficient and bureaucratic governments, as well as corruption, crime and theft” as the most significant deterrents to expanding their operations on the continent.

“Inadequate infrastructure and political instability are further concerns. Africa possesses unrivalled [agribusiness] opportunities if policymakers can remove some of these challenges,” said a PwC statement on the results of the survey.

Representatives of the Southern African integrated poultry production company, Astral Foods (Astral), expressed similar sentiments.

“When we are looking at investment opportunities in other African countries, we first look at what risk there is, such as political risk and macroeconomic factors. A poultry business like ours had added risk because it needs access to raw materials, and it needs to make sizeable investments in infrastructure,” explained Gary Arnold, managing director of Astral’s agriculture division.

“Risk versus reward is a constant consideration for us,” he added.

Daan Ferreira, Astral’s CFO, said that the company also looked at the strengths and weaknesses of the currencies of African countries that held potential for investment because these also had an impact on the company’s profitability.

PwC’s survey said that, based on interviews with heads of agribusinesses across Africa, the top five countries currently favoured for potential investment were Angola, Botswana, Ethiopia, Malawi, and Namibia.

The survey also found that despite the concerns highlighted by African agribusinesses, the sector was confident for its growth prospects in the short to medium terms.

“Most [African agribusiness] CEOs expect revenue growth in the next 12 months to be between 6% and 10%, with a significant number of CEOs expecting an optimistic 20%+ growth rate in the short to medium terms. This response is more bullish from the one received a year ago, but [is] certainly underpinned by the necessary level of caution,” PwC’s statement said.

Frans Weilbach, leader of PwC Africa Agribusiness Industry, said that the main reasons for this expected growth was “better penetration of existing markets on the African continent”.

“[African agribusiness] CEOs are looking for diversification within their current commodity value chain before moving into new commodities,” he said.

This emerged during panel discussions at the EU-Africa Business Forum 2017, recently held in Côte d’Ivoire. The theme of the forum was “Creating jobs for Africa’s youth.”

Speaking during a panel discussion, Ishmael Sunga, CEO of the Southern African Confederation of Agricultural Unions (SACAU), said ICTs could increase productivity and could make agriculture more effective and attractive to a new generation of farmers.

In an earlier post on the SACAU website, Sunga said agriculture was becoming more complex and dynamic, and required new skills and a new approach to farming: “It is no longer merely about growing a crop, but is more about focussing on strategic thinking and planning, to ensure the crop hits the market at the right time, and ensuring [that production is undertaken as] efficiently as possible”.

Various ways in which ICTs can help young farmers were highlighted. Ugandan entrepreneur, Gerald Otim, discussed a digital accounting service he developed that allows farmers to access information via their mobile phones.

The importance of real-time market and production information was also highlighted as means of placing producers in a better position to negotiate prices and plan production.

Panel members explained how the use of technology could enable farmers to improve production efficiency and reduce costs.

Examples cited included the Hello Tractor project that allows farmers to share tractors, as well as gathering production information with the help of aerial technology, such as that provided by Airinov.

Both LaVandez Jones, co-founder of Hello Tractor and Hamza Rkha Chaham, head of international strategy at Airinov, said they partnered with local entrepreneurs to tap into local networks and grow sales.

This was according to Asaah Ndambi, senior international animal production specialist at the Wageningen University and Research Centre (Wageningen) in the Netherlands. Ndambi was speaking at the 13th Africa Dairy Conference and Exhibition recently held in Johannesburg.

Ndambi explained that improving farm productivity was the best way to mitigate dairy sector GHG emissions.

In 2015 and 2017, Theun Vellinga, senior reseacher at Wageningen’s Livestock Research Institute, conducted a study to assess cost-effective interventions that could increase production, while decreasing GHGs in Ethiopia.

It was found that most GHG emissions were caused by feed production and enteric fermentation. The study then calculated the effect of multiple cost-efficient interventions.

“Emissions vary along the chain depending on production intensity; about 60% of on-farm emissions are from enteric fermentation. Feed production [also] contributes greatly to dairy emissions, [with] manure also an important contributor,” Ndambi said.

Climate-smart dairy production was crucial in the effort to reduce GHG emissions.

“[Climate-smart dairy production involves] reducing the number of animals and remaining productive by managing herds properly by replacing oxen and unproductive female animals, increasing crossbreeding through improved artificial insemination and reducing milk losses in post farm-gate stages,” Ndambi explained.

Moreover, improving manure management by promoting animal manure as fertiliser, as well as promoting the sale of manure as a fertiliser for use on urban and peri-urban farms, prevented the accumulation of manure, and also assisted in limiting GHG emissions.

Farmers could also adapt their operations by increasing system resilience through enhancing production systems; for example, implementing effective water capturing methods, irrigation, herd management, sequential cropping, genetic improvement, and manure management.

“Expanding the activities on the farm, such as mixed farming and cropping, and exploring other possibilities outside the farm, such as ecotourism, feed production, and biogas production, [can help in reducing GHG emissions]” Ndambi said.

The current military siege of power in Zimbabwe could be the beginning of the transformation the country’s agriculture sector needs.

According to Tinashe Kapuya, an agribusiness trade specialist with the USAID Southern African Trade and Investment Hub, the agriculture sector in Zimbabwe never recovered from the land reform policy initiated in 2000, and has remained subdued over the past 15 years.

For this reason, Kapuya said that the military capture of the state was unlikely to have an immediate effect on the sector.

However, he added that new leadership could result in a new vision for the sector, and could be the start of a new dispensation that redefined agriculture in Zimbabwe.

Kapuya also said that to revive the sector, Zimbabwe needed to first strengthen property rights in the country, and allow for the private ownership of land.

“This would not only promote investment, but also improve land management as well,” said Kapuya.

Current reports suggested that Zimbabwe’s former vice-president, Emmerson Mnangagwa, would lead the transitional government.

However, Kapuya said that Mnangagwa’s policies have thus far been defined by contradiction.

“On the one hand, he has reportedly shown [an] openness to markets, and was seen to be someone who would advance a more liberal integration of Zimbabwe’s economy into the global market.

[On the other hand], reports have [also presented] him as a figure that has advanced a command agriculture [socialist] policy narrative. While both are diametrically opposite, the latter could be interpreted as a positional play that was deeply etched in factional politics,” said Kapuya.

Kapuya also said that white farmers had an important role to play in the revival of commercial agriculture in the country, and that several politicians in ZANU-PF, Zimbabwe’s ruling political party, believed this.

“I think Mnangagwa will embrace white commercial farmers, but that will obviously need a new narrative that departs from Mugabe’s bigotry and racist politics,” Kapuya said.

Danie van Vuuren, principal officer of the Agricultural Employers’ Association in Namibia, told Farmers’ Weekly that the 25% increase would have a limited impact on farm income and employment levels on commercial farms, as average salaries on commercial farms in 2016 were 41% higher than the new minimum wage.

“The purpose of the agricultural minimum wage is to set an entry-level wage for young farmworkers with no experience,” he said.

The minimum wage for South African farmworkers is due to increase from R16/hour to R18/hour in May next year.

According to Minimum-wage.org, South Africa’s minimum wages rank 68th worldwide, and Namibia’s 122nd out of 197 countries.

To put this in context, European countries such as Denmark and the Netherlands ranked amongst the countries with the highest minimum wages, with incomes in rand value varying between R258/hour and R323/hour respectively.

The US was ranked 7th, with a minimum wage of US$7,25 (R100) per hour.

Zambia was ranked 103rd, with income being determined by category of employment and ranging from 522 400 Zambian kwacha (R760) per month for domestic workers to between 1 132 400 (R1 640) and 2 101 039 (R3 050) Zambian kwacha for general workers.

These wages includes transportation, lunch and housing allowances, and were last increased in July 2012, according to Minimum-wage.org.

Kenya took 106th place, with the minimum wage being determined by location, age and skill level. The lowest wage for unskilled agricultural workers was 2 536 Kenyan shillings (R350) per month, and it was last increased in May 2015.

Rwanda took 113th place with a minimum wage in the agricultural industry ranging between 500 and 1 000 Rwandan francs (R8 to R17) per day. The wage was last increased in January 2013.

Minimum-wage.org does not provide income figures for Zimbabwe. However, news reports confirm that the minimum wage for farmworkers was increased by 4,2% in June, resulting in the lowest-paid workers earning US$75 (R1 100) per month and the highest-paid workers earning US$150 (R2 150) per month.

The country is ranked 122th out of 197, at the same level as Angola, which has a minimum wage of 15 003 kwanzas (R1 300) per month.

Rwanda imports approximately 150 000 day-old chicks per month from countries such as the Netherlands, Belgium and Uganda, according to Rwanda’s Ministry of Agriculture.

AgDevCo’s investment will allow Uzima Chicken, sponsored by a US-based investor, Flow Equity (which has a similar business model in Ethiopia), to produce between eight million and 10 million chicks a year.

This will in effect significantly reduce the country’s dependence on chick imports.

Chris Isaac, regional director of AgDevCo, said: “We believe Uzima Chicken can transform the poultry market in Rwanda by delivering improved birds to hundreds of thousands of households.

We have seen the model’s success in Ethiopia and are confident that, with continuing support from the Ministry of Agriculture, Uzima Chicken is well-placed to replicate that success in Rwanda.”

Uzima plans to sell day-old chicks through a network of independent distributors, who will rear the birds until they are four weeks old before selling them to smallholder farmers.

The SASSA dual breed will be produced, as it is ideal for rearing outdoors in backyard conditions, gains weight quicker than local chickens, and is three to four times more productive at laying eggs, according to the statement.

The initiative forms part of a greater plan by the Ugandan government to reduce its dependence on chick imports from other countries. In August 2016, Flow Equity secured a 25-year contract for Uganda’s 2,3 billion RWF National Hatchery, Rubirizi, at 750 million RWF per year.

Privatisation of the hatchery resulted in production increasing from 10 000 to 80 000 day-old chicks per month. The government also allocated 15ha of land in Bugersera District to the company to facilitate expansions.

The supply of day-old chicks from Rwanda’s hatcheries has increased 23% from 399 000 in 2010 to 912 000 in 2015, with Rwanda Chick representing 74% of national production.

The partnership is the first for Philafrica, a subsidiary of SA’s AFGRI Group, which focuses on investing in food categories across Africa, as well as on locally-sourced raw materials.

Founded in 2005, Novos Horizontes was working to unlock Mozambique’s agricultural potential by supporting smallholder farmers.

Novos Horizontes initially had 250 smallholder broiler outgrowers to which it supplied necessary inputs on credit and from which it purchased full-grown birds for slaughtering, processing and marketing.

According to the company’s website, this number had decreased to around 130 smallholder farmers as a result of production challenges.

Andrew Cunningham, executive chairperson of Novos Horizontes, said that with Philafrica’s support, the company could continue with its aim of becoming Mozambique’s “premier poultry producer”.

It also wanted to expand into other value chains where agro-industrial processing and building brands could buy production from Mozambique’s smallholder farmers.

“We are excited by the potential of this investment and partnership to enhance our vision to unlock potential in Mozambique,” said Cunningham.

A statement by Philafrica said that it planned to invest R1 billion to R1,5 billion in food categories across Africa over the next 18 to 24 months.

Philafrica’s CEO, Roland Decorvet, said that currently 60% to 70% of Mozambique’s poultry consumption needs had to be imported due to a lack of local production.

“We see immense potential to replace imported [poultry] products with local production and are pleased to have found a strong operating partner in Mozambique with [nearly two] decades of experience in the poultry value chain,” he said.

Decorvet added, “Moreover, our expertise in rendering, feed mixing and poultry will drive substantial synergies as [Novos Horizontes] expands in Mozambique.”

Information on Novos Horizontes’ website revealed that in 2016, the company sourced and processed 3 321t of frozen chicken, hatched and supplied 6,3 million day-old broiler chicks, and manufactured 19 995t of poultry feed.