Agribusinesses in South Africa have seen significant growth in the rest of Africa. With the retail sector booming on the continent, there was a greater availability of and demand for good quality agricultural produce and processed food products than ever before, experts said yesterday.
Hennie Heymans, the managing director of DHL Express South Africa, said volumes to the continent his firm handled had increased by double digit percentages in the year to date. DHL is a global leader in the logistics industry.
He said the significant growth of South Africa’s agribusiness entailed the full value chain from agricultural production by farmers through secondary processing, distribution and retailing to the consumer.
“The retail sector is booming in Africa, with large South African retailers choosing to expand their chains across the continent.
“As a result of this expansion, there is a greater availability of and demand for good quality agricultural produce and processed food products than ever before.”
Shoprite, South Africa’s largest food retailer, now has a sizeable footprint on the continent. Rivals Massmart, Pick n Pay and Woolworths and food producer Tiger Brands are also pushing north of the border.
Heymans pointed to the recent report by the World Bank, Growing Africa: Unlocking the Potential for Agribusiness, which revealed that Africa’s farmers and agribusinesses could create a trillion dollar food market by 2030, a three-fold increase from the current size of the market, which is estimated to be worth $313 billion (R3 trillion) a year.
Hennie van der Merwe, the chief executive of the Agribusiness Development Corporation, said the South African commercial farming sector was seeing little growth due to challenges such as arable land and water scarcity, increasing labour costs and rising electrify tariffs.
He said: “The main issue in the country is limited resources.The rest of the continent is sitting on huge resources of land. We need to produce high value crops for the African market. We need to develop the idea of partnerships and bring expertise to the continent. We need to grow crops that are adapted to the local conditions.”
Van der Merwe said given its increased spending power, demands for goods and untapped land resources, Africa was currently experiencing a revival in terms of its focus on agribusiness, not only to increase food self-sufficiency, but also to create jobs and economic activity, especially in rural areas.