Agribusiness in Africa: The future was yesterday
More than 60 percent of Africa is arable land and there are more than 35 million small farmers, Africa produces just three percent of the world"s rice and wheat, and 10 percent of the world"s maize.
Agribusiness is simply the business of agricultural production. Agribusiness touches on health, nutrition, safety, science and environment, however due to more efficient operating practices, new technologies, increased level of partnership and collaboration across the supply chain, the future for the industry is very attractive and still emerging.
Clichés describing agribusiness are quite valid from the farm to the fork, soil to the skin, seed to feed, ground to grub, from the earth to the edible, all give credence to the detailed and concise process of the value chain and end to end processes.
Key trends shaping agribusiness are the needs for more food, biofuels, raising importance of environmental sustainability, continued food price volatility and globalisation.
The catchphrase "The Future was Yesterday" highlights the pragmatic and cautious need to fast track the process of agribusiness transformation and industrialisation in Africa considering the empirical evidence that the developed countries of the world have attained monumental heights and are just consolidating on the gains of a mature and structured market.
Presently the developed countries have moved the agribusiness industry platform to the heart of digitalisation, digitalisation is not only widening access to markets and improving efficiencies but it also increasing transparency in terms of costs of production, added value, location, tracking and cost of shipments. In simple words the future of agribusiness is going digital all the way and Africa must meander through the murky waters of the past and present to appropriately direct the future.
Technology is playing a huge role in the transformation of agricultural supply chains. The deep roots and contemplation of the main theme of this article is extracted from the historicity of the industrial revolution sandwiched in between the preceding agricultural revolution and post information technology revolution.
The industrial revolution reflects our challenges as a continent in terms of scale and scope of transformation, which would involve all stakeholders of the polity, from the public and private sectors to academia and civil society. How integrated and comprehensive is our response to the process of agribusiness industrialisation? It has been agonisingly slow and the methodology seems regressive in planning, implementation and control based on impact and results.
The Fourth Industrial Revolution, finally, will change not only what we do but also who we are. It will affect our identity and all the issues associated with it: our sense of privacy, our notions of ownership, our consumption patterns, the time we devote to work and leisure, and how we develop our careers, cultivate our skills, meet people, and nurture relationships. It is already changing our health and leading to a quantified self, and sooner than we think it may lead to human augmentation. The list is endless because it is bound only by our imagination (Klaus Schwab is Founder and Executive Chairman of the World Economic Forum).
The first industrial revolution used water and steam power to mechanise production. The second used electric power to create mass production. The third used electronics and information technology to automate production. The fourth is building on the third, the digital revolution that has been occurring since the middle of the last century. It is characterised by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres. On the scale of 1-100 where is Africa? It appears we are presently going to have a wholesome combination of the different phases of industrial revolution simultaneously running to kick-start our transformation.
The global future of agribusiness is digitalisation and it started yesterday. The digitalisation challenges of the agribusiness sector in Africa remains numerous and interlocked amongst complexities, with investments, mechanisation and commercialisation at the top of the list.
Dubai Multi Commodities Centre (DMCC), a leading government establishment for trading international commodities and reputed to be the world"s fastest-growing free zone teamed up with Future Agenda on an odyssey to discover the future of global trade. A few highlights from their findings after twelve months of extensive research (2015) include the following:
• US$40trillion - the total value of global trade, which is a measure of real cross-border economic activity
• 85 percent - the reduction in cost of exports with the adoption of a fully digital supply chain
• US$29trillion - the potential growth of the value of the digital economy over the next decade
• 1.1billion - the size of Africa"s workforce, which is estimated to be the largest in the world by 2040
• 40 – Number of countries needed to collaborate for One Belt One Road trade route to work
• $400bn - the total value of world food trade and a vast slice of the global trade pie
Dubai Multi Commodities Centre from the summary review above gives credence to how business decisions are shaped and formed. Agribusiness is an important subset within the trade sector and should always play a central role in the policy and life of nations in the African continent.
It clearly re-echoes one message – African countries must focus on developing the real sector and trade with each other to get out of the vicious poverty cycle. All parameters for competitiveness within African countries must start with developing our internal industrial engine and capacity to process raw materials.
According to www.worldstopexport.com Singapore"s top trading partners are China (13%), Hong Kong (12.6%), Malaysia (10.6%). Canada"s top trading partners are United States of America (76%), China (4.1%) and United Kingdom (3.3%). Germany"s top trading partners are United States of America (8.9%), France (8.4%) and United Kingdom (7.1%).
Underdeveloped countries have a wrong mindset that they are strange bedfellows and cannot do business together. Volume of intra and inter trade within African countries is paltry.
Most countries develop primarily by generating substantial domestic capacity for goods and services, which dovetailed into international trade, and others like the Asian tigers build a strong export-oriented market. Elementary economics emphasises the nearness to market mantra as a no-brainer for sustainable growth, profit and consolidation.
"The future was yesterday" and as such Africa must start now, policies that would stimulate and generate goods and services for trade and exchange within the country and continent must be our upmost strategy and priority. The internal and external positive ripple effect on our three tiers of government and citizenry is unquantifiable.
William Gibson quotes "The future is already here. It is just unevenly distributed."
In conclusion, we have the rare opportunity to stand on the precipice of time and redistribute the future and declare boldly that our generation positively turned the tide around for the future of Africa.
by Olumide Famakinwa, Agribusiness Development Practitioner/ CEO, Firstling, Lagos, Nigeria