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Food security in AfricaWater on oil
www.pwc.com/africa
December 2015
PwC
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Food security in Africa2
December 2015
Where do weget new suppliesof food?
4
Why Africa?
5Farming hubs
6
Big farms arestill not big
7Contacts
8
PwCFood security in Africa
3December 2015
Imagine a world of9bn people fed in asecure, responsible andsustainable manner
PwC
PwC
CIS?
40m ha of unproductive land available but port bottlenecks on the Black Sea (25m tonnesexport capacity) suggest that this will be difficult to maximise.
Central Asia?
Lack of access to Black Sea Ports poor rule of law, inconsistent supply from weather,lack of rail infrastructure to key markets.
Latin America?
Over-reliance on a few key suppliers detracts from food security; export bans from thesecountries could be damaging; Argentina has already imposed export bans.
All roads lead to Africa
400m ha of land on the Guinea Savannah, double-cropping, cheap, accessible, similar toBrazil 40 years ago in terms of development of super farms.
Domestic supply?
Polluted rivers, degraded soils, changing diets, greater affluence all suggest that key emergingmarkets, such as China, are struggling to maintain self-sufficiency in their food supplies.
Developed markets?
Yields have been maximised, there are no great unfarmed areas left. Developed markets willonly have a marginal influence on additional supplies.
Food security in Africa4
December 2015
Where do we get new supplies of food?Imagine a world of 9bn people fed in a secure, responsible and sustainable manner
All roads lead to… Africa!
PwCFood security in Africa
5December 2015
Why is Africa’s food security important to the world?
Urbanisation, the rise of superfarms, and the need for food security are key drivers.
Advantages in the demand side are – rising food requirements,both locally and globally.
We believe Africa will see a change similar to that of Brazil over the past forty years.
Key advantages on the supply side are – fertile land, abundant water,and cheap labour.
New investment models tailored for Africa will become increasingly prevalent.
African agriculture is likely to witness a transformation over the next two decades.
Why Africa?
PwCFood security in Africa
6December 2015
Farming hubs: Bringing together development corridors andagricultural zones
Tanzania
Southern Agricultural GrowthCorridor of Tanzania (SAGCOT)
Ghana
Savannah AcceleratedDevelopment Authority (SADA)
DRC
Agro Industrial Park (SOPAGRI)at Bukanga-Lonzo
Nigeria
Staple Crop Processing Zones(SCPZ)
Angola
Capanda Agro-Industrial Hub Zambia
Development Blocks
PwC
Big farms are still not big –They remain pioneers
Food security in Africa7
December 2015
Black Earth Farming
300,000ha of land
Russia Ukraine
Mriya Agro
320,000ha of land
Brazil
SLC Agricola
340,000ha of land
Argentina
AdecoAgro
280,000 of land
Large listed agriculture groups:
• Combined these businesses cover an area six times the size of London or one-third the size of Belgium
• Yet their combined market cap is US$2bn – The equivalent to two hours oftrading in Apple Inc. on NASDAQ
• To replace Nigerian rice imports will require 500,000 hectares of land; thusseveral companies of scale will emerge
Contacts
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication withoutobtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permittedby law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publicationor for any decision based on it.
© 2015 PwC. All rights reserved. “PwC” refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
151124-101200-AF-OS
Agribusiness Africa business group PwC Africa
Hein BoegmanTerritory Senior Partner, PwC Africa
D: +27 11 797 4335
Dion ShangoRegional Senior Partner, South Market Area
D: +27 11 797 4166
Anne ErikssonRegional Senior Partner, East Market Area
D: +254 (20) 285 5000
Uyi AkpataRegional Senior Partner, West Market Area
D: +234 (1) 271 1700
Joel SegalUK Africa Business Group Chair
D: +44 (0)20 7804 1661
Chika ChukwujekwuUK Africa Business Group Lead
D: +44 (0)20 7804 2286
Richard FergusonAgriculture Adviser, PwC
M:+44 (0) 7880 827282
Mark JamesDeals, Agriculture
M: +44 (0) 7803 858721
