Deeper engagement needed in sub-Saharan Africa

IN A report titled, “How global companies can help sub-Saharan Africa reach its F&A potential,” Rabobank recommends that food and agri (F&A) companies engage further with the region by acting as significant catalysts in sub-Saharan Africa’s F&A development. The Bank has set out four zones of opportunities and five keys to success to improve Africa’s F&A capacity and help it meet the world’s increasing need for food.

“Given the recent developments and fewer growth opportunities in the global F&A sector, global companies will need to look to markets like Africa to sustain future growth rates,” said Bill Cordingley, head of Food & Agri Research for Rabobank in the Americas and report co-author. “There are increasing numbers of global F&A companies engaging with Africa, as illustrated in our report, but they need to go beyond the initial investment and knowledge-building stage where many of them stop.  The more challenging step is to identify specific value chain opportunities and credible local partners who can co-invest or become a supplier.  Nothing works in Africa without partnerships or supply chain alignment. But for those companies that get it right, the rewards will be considerable.”

According to the Bank, many more F&A companies need to change their mindset and take steps now to commit to Africa on a long-term basis.  In both helping Africa reach its F&A potential and addressing the increasing requirements of Africa’s emerging urban consumers, global F&A companies will need to adapt their business models to the circumstances on the ground.  But there are some overall principles which Rabobank identifies for where global companies should focus their efforts and how they can deliver a successful outcome.

The four zones of opportunity where global F&A companies should focus:

Increase production sustainably – address the yield gap in existing farming operations, expand operations where possible and develop new land resources.

Add value by building sustainable supply chains for all players – reduce risk, improve productivity and access to capital and markets; minimise waste and locate processing close to production.

Become regionally and globally export competitive – utilise market access and insights; unblock infrastructure bottlenecks. (In particular, Rabobank identifies export opportunities for African cocoa, coffee, cashew nuts, palm oil and sugar.) 

Address African consumers’ increasing and changing requirements – the local market will be key to success.
The five keys to success in creating a sustainable African strategy:

Adopt an inclusive approach – build trust, mutual respect and create mutual value along the value chain, respecting local rights and interests.

Make a long term commitment – demonstrate trust by co-investing in infrastructure and supporting local market development.

Establish supply chain partnerships – develop robust, multi-year supply agreements that align interests along the chain, combining local and global approaches and expertise.

Bring unique capabilities, not just capital – include access to technology, expertise, markets, customers and leadership so global companies are “needed” not just “used.”

Reduce risk in the supply chain and secure finance – facilitate supply chain finance, and improve prospects for commercial finance being made available to local and regional F&A companies.

Even as the macro-level picture of Africa’s economic and sociNike Air Max