How To Invest In Agriculture In Africa
Why invest in Africa?
There are a number of reasons to invest in Africa.
Africa is home to three of the world’s top four, fastest growing economies. Number 1 is Libya, number 2 is Sierra Leone and number 4 is Niger. Africa’s economy is growing faster than any other continent, according to a Q2 2013 report from the African Development Bank (AfDB). The AfDB’s Annual Development Effectiveness Report says one third of Africa’s countries have gross domestic product (GDP) growth rates of more than 6%.
Africa’s collective GDP per capita reached $953 in 2011 and the AfDB say this is driven by improved economic governance, a better business climate and increased levels of trade and international investment. The annual rate of international investment has risen fivefold since 2000.
How can I invest in Africa?
There are lots of ways to invest in Africa. The Forbes top 5 are: agriculture; tourism; mining of solid minerals; infrastructure; and fast moving consumer goods.
Africa is an increasingly popular hub for foreign investors who are attracted by the widespread development of social and physical infrastructure and growing pool of educated, English-speaking workers in countries across the continent.
However, Africa also remains at the centre of the world’s pressing challenge of food security. A growing global population means an additional 150 mouths to feed per minute (US Census Bureau), but the rate of agricultural production has not caught up. This creates a large gap in supply and demand, which has created the boom in African agriculture.
US President Barack Obama announced the inclusion of Senegal in his $3.7 billion New Alliance for Food Security and Nutrition initiative at a Food Security Expo in Dakar.
Where is Senegal?
Senegal is a country in West Africa. Its official name is the Republic of Senegal (République du Sénégal). It was named due to its locality with the Senegal River, which borders the east and north. Senegal is externally bounded by the Atlantic Ocean to the west; Mauritania to the north; Mali to the east; and Guinea and Guinea-Bissau to the south.
Senegal’s capital is Dakar, which is located at the westernmost top of the country on the Cap-Vert peninsula. The Cape Verde Islands lie approximately 500 kilometres (300 miles) off the coast.
Senegal covers a land area of almost 197,000 square kilometres (76,000 square miles) and has an estimated population of circa 13 million. It has a tropical climate with dry and rainy seasons.
How can I invest in Senegal?
You can invest in Senegal in a number of ways. It is a stable and open country, with a healthy and competitive economy. It offers good human resources and a strong, developing infrastructure with a modern fiscal and legal framework.
Senegal’s top investment sectors are: agricultural business; new technologies; tourism; textiles; and fishing.
Senegal saw growth of 3.7% GDP in 2012, with 4.3% projected through 2013 and 5.1% in 2014. Much of this comes from international investment. Agricultural business leads the way with growth of 16.7% in 2012 and an upward forecast for 2013 and 2014.
Popular agricultural investments in Senegal include: farmland for crops such as maize, onion and sweet potato.
Property Frontiers works with select partners in Senegal to offer agricultural and infrastructure investments, specifically with farmland, plantations and community regeneration projects.
What is the currency in Senegal?
The currency in Senegal is the West African Communauté Financière d'Afrique (CFA) franc. It is the currency of eight independent states in West Africa: Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo. These countries have a combined GDP of US$78.4 billion.
The currency is issued by the Banque Centrale des États de l'Afrique de l'Ouest (BCEAO), which is located in Senegal’s capital of Dakar. BCEAO acts on behalf of the members of the Union Économique et Monétaire Ouest Africaine (UEMOA).
The West African CFA franc is of equal value to the Central African CFA franc. 100 CFA francs are roughly equivalent to £0.13 GBP (13 pence) or $0.21 USD (21 cents).
What is the main industry of Senegal?
Agriculture is the main industry of Senegal, occupying around 75% of the workforce. Senegal’s main agricultural products are: peanuts; cotton; food grains; horticultural products; sugar; livestock; dairy; poultry; fisheries; and forest products.
The government’s agricultural support system is mainly based on cash crops with reliable markets. Agricultural research has significantly contributed in maintaining productivity despite the area’s irregular rainfall and poor soils.
Development in infrastructure, distribution, credit, marketing and other support systems all combine to boost Senegal’s agriculture trade. This includes the government-launched Return to Agriculture (REVA) program, set up to further the development of infrastructure, along with providing training and production tools and equipment to farmers. Senegal’s main school is the ENSA agricultural college.
Within Senegal, 60% of food produce is imported. However, over 1 million people are food insecure so the Senegalese government is trying to reduce imports by 50% through a further increase in domestic food production.