Rising food demand to create opportunities in Africa's agricultural sector

27 February 2018 Consultancy.africa

A combination of rapid population growth and increasing economic prosperity will create substantial demand and opportunities for the agricultural sector of Africa, according to a new report from global professional services firm Deloitte. The firm identifies Ethiopia, Nigeria and Tanzania as the key agricultural markets in terms of investment potential.

Key economic indicators suggest that Africa is poised for massive economic growth over the next few years. Cumulatively, Africa has the second largest continental population in the world, behind only Asia, which is particularly telling as population growth is one of the primary drivers of GDP.

According to a new report from Big Four accounting and advisory firm Deloitte, titled ‘Agricultural Opportunities in Africa,’ the continent will be home to 20% of the world’s population by 2030. In the next five years alone, Africa’s population is expected to grow by 200 million people. Moreover, more than 40% of the working age population is between the ages of 15 and 24, making it the youngest population on the planet.

These indicators have already begun to manifest themselves economically. Between 2000 and 2016, the per capita GDP in the region of Sub-Saharan Africa (SSA) doubled from $1,900 to $3,800. However, a dip in oil prices has sent the continent into an economic slowdown in recent years, exposing Africa’s dependence on certain commodities and distinct lack of infrastructure in other areas, particularly as to its power and energy sector.

Potential crop farming markets in Africa

The continent wants for foreign investment, and one sector in which this has been forthcoming is that of agriculture. As per Deloitte’s report, agricultural value in Africa more than doubled over the decade between 2006 and 2015, primarily as a result of foreign direct investment (FDI) inflows.

Moreover, initiatives such as the New Partnership for Africa’s Development (NEPAD) and the Comprehensive Africa Agriculture Development Programme have all drawn considerable multilateral interest from communities across Africa. As a result, public expenditure in the agricultural sector has been growing at more than 7% annually since 2003, taking many countries to a position of food security.

In essence, the continent is ripe for investment in the agricultural sector, as current trends are sure to create demand over the next few years. The report from Deloitte delves into market nuances across Africa to compare the ease of doing business and availability of agricultural resources across countries, with the aim of determining the main farming destinations on the continent.

Based on these criteria, the report found three countries that were highly lucrative spaces for investment, namely Ethiopia, Nigeria and Tanzania. In addition, the report shortlists six crops, namely cassava, maize, wheat, rice, ground nuts and soya beans, as the most lucrative based on market sentiment and demand across the continent and the globe. Correspondingly, Ethiopia was found to be the best destination for wheat, Nigeria for cassava, while Tanzania emerged as the best market for maize.


Economically, Ethiopia is one of the most agriculture-dependent countries in the world. In the last 15 years, the value added from the agricultural sector has constituted 45 % of the GDP, which is twice the SSA average and ten times the average across the world. The country is home to nearly 12 million smallholder farms, which are responsible for 85% of the country’s employment and 95% of the agricultural GDP.

Wheat production and harvested area

Despite the fact that maize and teff are the most widely produced crops in Ethiopia, the country is still the largest producer of wheat in the entire SSA region. Moreover, as the demand for wheat is expanding, the country’s wheat production levels are growing simultaneously, in light of government plans to increase the production per hectare from 20% in 2015 to 31% in 2020. This is primarily to reduce the Ethiopia’s reliance on imports for wheat, which comprise 52% of the total agricultural imports.


Despite being the largest country by GDP in Africa, Nigeria was particularly hard hit by the fall in oil and commodity prices in 2014. As a result, the country has been on a diversification drive, in a bid to reduce dependence on oil for GDP. The agricultural sector has been a key beneficiary of this new direction, particularly in the agro-processing domain.

Cassava production and harvested area

Among the country’s agricultural products, one of the largest and most economically lucrative is cassava. Currently, Nigeria produces more than 50 million tonnes of cassava; a figure that is expected to double by 2020. In terms of production per hectare, Nigeria currently generates 13.6 tonnes of cassava per hectare, which is expected to increase to 40 tonnes per hectare over the same period.


Tanzania is another country that is highly dependent on its agricultural sector. In the last ten years, the sector has contributed around 31% of the national GDP, which could be attributed to the fact that the country has climatic conditions that are the most conducive to agriculture in the whole SSA region.

Maize prodcution & area harvested trends, 2000 - 2014

Tanzania produces a range of products, including cash crops for export such as tobacco, cashew nuts, coffee, tea and cotton. However, the most lucrative crop for investment in the country is maize, which occupies 4 million hectares of the country’s planted area, making it the largest in Southern and Eastern Africa. Smallholder farmers produce 80% of the crop in Tanzania. 


Nigeria is home to the most companies that are driving Africa's economic prominence

08 April 2019 Consultancy.africa

As many as 360 companies across Africa have achieved unprecedented growth over the last year, to the extent that global professionals services firm PwC has placed them in its latest edition of the Companies to Inspire Africa 2019, developed in collaboration with the London Stock Exchange. 

Experts have long talked of the economic potential that the African continent holds to become a major financial centre in the global economy, particularly as conditions for business in the region continue to improve gradually. Parts of the continent are now in a position to keep pace with global trends.

To lay the foundation, a number of countries have now come under stable democratic regimes, which has offered the stability required for economic activity to thrive. Economic indicators, on the other hand, have always been in favour of business on the continent, given its vast young population.Sector-wise growth in Africa

As per PwC’s report, Africa is home to nearly 230 million between the ages of 15 and 24, which means that the continent will have a substantial workforce in the near future, provided that this population can be educated and endowed with the requisite skills for development.

In addition, a number of African countries have the benefit of developing their technological, political and regulatory infrastructure at a time when these environments are transforming across the globe, allowing these developments to learn from international trends and best practices.

These conditions are gradually beginning to manifest themselves in the form of economic prosperity, which is leading to the increase in the number of urban centres across the continent, an expanding middle class, and consequently the rapid expansion of the continent’s consumer retail market.Sector-wise growth in Africa (2)

360 companies detailed in the collaborative report between PwC and the London Stock Exchange are operational in a range of different sectors, including the retail sector, as well as a rapidly expanding agricultural sector, which is only expected to growth further in the near future.

Technology is another area of focus for firms across the continent, as they look to capitalise on the market of online users on the continent, which is expected to surpass 1 billion people by as early as 2021. Another benefit that African economies are drawing from their development in the current scenario is energy efficiency.

Sustainable technology is at its peak around the globe as firms around the globe are subject to increasingly stringent environmental regulations. As a result, renewable energy companies in the region have been thriving over the last year. Financial services is another segment that has registered a strong performance.African companies snapshotOverall, the 360 companies hailed from 32 countries across the continent and registered a staggering compound annual growth rate in revenue of 46%. The majority of these companies – 147 – hailed from East Africa, where foreign investment has been rapidly on the rise. 

Western Africa, which is home to the budding economies of Nigeria and Ghana, has the second largest number of companies at 130. In terms of individual countries, Nigeria was home to the most companies at 97, leading the other countries by some distance. South Africa was next with 23 companies.