Food security in Africa Water on oil

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1 Water on oil

2 Content Where do we get new supplies of food? 4 Why Africa? 5 Farming hubs 6 Big farms are still not big 7 Contacts 8 2

3 Imagine a world of 9bn people fed in a secure, responsible and sustainable manner 3

4 Where do we get new supplies of food? Imagine a world of 9bn people fed in a secure, responsible and sustainable manner Developed markets? Yields have been maximised, there are no great unfarmed areas left. Developed markets will only have a marginal influence on additional supplies. CIS? 40m ha of unproductive land available but port bottlenecks on the Black Sea (25m tonnes export capacity) suggest that this will be difficult to maximise. Central Asia? Lack of access to Black Sea Ports poor rule of law, inconsistent supply from weather, lack of rail infrastructure to key markets. Latin America? Over-reliance on a few key suppliers detracts from food security; export bans from these countries could be damaging; Argentina has already imposed export bans. Domestic supply? Polluted rivers, degraded soils, changing diets, greater affluence all suggest that key emerging markets, such as China, are struggling to maintain self-sufficiency in their food supplies. All roads lead to Africa 400m ha of land on the Guinea Savannah, double-cropping, cheap, accessible, similar to Brazil 40 years ago in terms of development of super farms. All roads lead to Africa! 4

5 Why is Africa s food security important to the world? Key advantages on the supply side are fertile land, abundant water, and cheap labour. Urbanisation, the rise of superfarms, and the need for food security are key drivers. African agriculture is likely to witness a transformation over the next two decades. Why Africa? New investment models tailored for Africa will become increasingly prevalent. We believe Africa will see a change similar to that of Brazil over the past forty years. Advantages in the demand side are rising food requirements, both locally and globally. 5

6 Farming hubs: Bringing together development corridors and agricultural zones Ghana Savannah Accelerated Development Authority (SADA) Nigeria Staple Crop Processing Zones (SCPZ) DRC Agro Industrial Park (SOPAGRI) at Bukanga-Lonzo Tanzania Southern Agricultural Growth Corridor of Tanzania (SAGCOT) Angola Capanda Agro-Industrial Hub Zambia Development Blocks 6

7 Big farms are still not big They remain pioneers Large listed agriculture groups: Russia Ukraine Black Earth Farming Mriya Agro 300,000ha of land 320,000ha of land Brazil Argentina SLC Agricola AdecoAgro 340,000ha of land 280,000 of land Combined these businesses cover an area six times the size of London or onethird the size of Belgium Yet their combined market cap is US$2bn The equivalent to two hours of trading in Apple Inc. on NASDAQ To replace Nigerian rice imports will require 500,000 hectares of land; thus several companies of scale will emerge 7

8 Contacts Agribusiness Africa business group Africa Richard Ferguson Joel Segal Hein Boegman Agriculture Adviser, UK Africa Business Group Chair Territory Senior Partner, Africa M:+44 (0) E: D: +44 (0) E: D: E: Mark James Chika Chukwujekwu Dion Shango Deals, Agriculture UK Africa Business Group Lead Regional Senior Partner, South Market Area M: +44 (0) E: D: +44 (0) E: D: E: Anne Eriksson Regional Senior Partner, East Market Area D: +254 (20) E: Uyi Akpata Regional Senior Partner, West Market Area D: +234 (1) E: This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it All rights reserved. refers to the network and/or one or more of its member firms, each of which is a separate legal entity. Please see for further details AF-OS