What does it take to expand your business to Africa?
With the current uncertainties with COVID-19, we need to contemplate how things will change with slumped prices, lack of consumer demand and chilly economic prospects. What can we do to stay competitive?
Looking out from the UK, a place of immense business opportunity is Africa. Most people imagine poor facilities and under skilled farmers, but the African agri-business landscape is dynamic, eager and a cost-effective environment to build a business. So how can agri businesses tap into opportunities in Africa? We’ve rounded up four key pieces of information to show you how:
Renewed Africa – UK Alliances
January 2020 was a strategic time for trade relations with the UK-Africa Investment Summit where the government promises ongoing business reforms that plans for over £1.35 billion of private British investment into Kenya confirmed.
Abundant cheap land
Africa is considered the future breadbasket of the world, with 200 million hectares or 50 percent of the world’s fertile agricultural land available and uncultivated. There is also increased access to cheaper land where for example the price of a hectare of arable land in Malawi is £500, and in Zambia, purchasing land with water is tenth the price of the UK. Leasing is also very popular for foreign agri businesses, where depending on the location in Africa, a hectare of agriculture land can be leased for as low as £80 per year.
Opportunities in Productivity
Not only can UK agri businesses set up farming businesses, but it is a great location to set up manufacturing of agriculture equipment, whilst selling products and services into a dynamic local agricultural market. The market has a lack of access to high-yield seeds, artificial irrigation aid, cultivation techniques, fertilizers and pesticides, combined with lack of access to financing creates a need for suppliers to become creative in their offerings.
Africa is an excellent testing location where products can be tested before scale. With affordable land, fertile soil and favourable weather, agribusinesses have a pick to start with one hectare to 10,000 hectares. The opportunity to start small allows businesses to test the waters without the need of high injection of capital and scale as the business grows.
Andrew Ritchie, Managing Director
Agri Frontier Ltd
My experience in East Africa, and having lived and run large agri businesses in Kenya for 12 years and now helping UK businesses expand to Africa, the time is right to tap into emerging markets where growth opportunities outweigh the challenges.
+44 (0) 7852 548152
Office 3, Farm491, The Alliston Centre, Stroud Road, Cirencester, GL7 6JR, UK