Whether for profit or social motives - and often both - an increasing number of investors are targeting opportunities in African agriculture. At the same time innovative approaches for deploying aid to support farming businesses linked to smallholders are emerging. This blog provides a snapshot of who is doing what, where and how.

17 April 2011

African agriculture could be worth $880 billion - McKinsey

A McKinsey report on the potential of African agriculture suggests the sector could be worth $880 billion annually by 2030, up from $280 billion today. To put this in perspective, total aid flows to Africa are some $50 billion a year.

How will that transformation be achieved in a way that is socially and environmentally sustainable? McKinsey partners Sunil Sanghvi and Roberto Uchoa de Paula call for holistic solutions to achieve a green revolution. One approach is agricultural development corridors, as promoted by AgDevCo and others in Mozambique and Tanzania.

According to Uchoa de Paula: "I can totally see Mozambique being a next Brazil in the next 10 to 20 years. They are now developing some infrastructure that will provide roads, railroads, and energy across the country. There are investments in credit, and irrigation . . . But most importantly, I see Mozambique actually engaging their small holders as part of their solution."

11 April 2011

Putting philanthropic capital to work in African agriculture

Today's announcement of a philanthropic investment by the Tony Elumelu Foundation in Mtanga Farms in Tanzania points the way to a future model for aid.

This deal will help Mtanga Farms establish a seed potato industry, which will benefit more than 125,000 local smallholder farmers who have proven able to increase yields threefold when provided with clean seed potatoes.

Tony Elumelu is a successful African entrepreneur who set up United Bank for Africa Plc, now active across three continents. He brings a business-minded approach to making investments which can deliver financial as well as social retruns.

"With this deal, we hope to set a new standard for both philanthropy and investing within Africa," said Founder and Chairman Tony O. Elumelu.

"Through impact investing, we seek to drive African economic growth from within by investing in businesses that generate social, environmental, and financial returns. This can also change the paradigm of how development takes place on the continent."