Agribusinesses in Africa are confident in the growth prospects for the continent for 2018, says PricewaterhouseCoopers (PwC).
According to the PwC Africa Agribusiness Insights survey 2017/’18, CEOs from of commodity chain companies spanning from primary production to food processing, expect a revenue growth of between 6% and 10% over the next year, with many expecting growth of more than 20% in the short to medium term.
“The main reason for growth expectations of agribusinesses as indicated by CEOs is better penetration of existing markets on the African continent,” says Frans Weilbach, PwC Africa Agribusiness Industry Leader.
The top destinations for doing agribusiness are Angola, Botswana, Ethiopia, Malawi and Namibia. The effect of the change in leadership in Zimbabwe is also worth taking note of.
He said these leaders indicated they were looking to diversify within their current commodity value chains before exploring other commodities, and according to him the current uncertainty about significant challenges may be the cause.
According to PwC, many respondents were South African. Data provided by the South African (SA) agricultural business chamber Agbiz shows the country’s GDP grew by 38.7% and 44,2% quarter-on-quarter in the second and third quarters of 2017 respectively. This growth is accompanied by high levels of caution, due to a decline in agribusiness confidence, most likely due to the recurring drought in the Western Cape Province in SA.
Inadequate infrastructure and bureaucratic governments, as well as corruption and crime were indicated as the main obstacles for cross-border expansions, as well as inadequate infrastructure and political instability.
“Africa possesses unrivalled opportunities if policy makers can remove some of these challenges.”
The report also said that it is important for agribusinesses to keep up with the latest technology to grow and remain competitive on a global level. Access to this technology has been the main inhibitor of business growth.
International pulling forces that may impact business growth that was indicated was the United Kingdom’s Brexit vote, the American presidential election a year ago.