AfCFTA Agreement, Is there money to make in Agriculture?
January 1st, 2021 is a historical date for Africa. It is the start date for trading under the African Continental Free Trade Area (AfCFTA) agreement. Are there money making opportunities for you? In this post, explore all the most profitable agribusiness ideas for you.
Agriculture is important for Africa’s food security and economic growth. However, Modern farmers faces many challenges like climate change, pests and low access to funding and information. Luckily, these challenges are business solutions for you to serve millions of farmers and consumers across the continent. the following are the most profitable agricultural businesses you can plant to start or expand.
Farming business
Growing food for local and domestic markets is the most profitable idea. You can grow it using modern methods, in cities or using organic farm inputs and methods
- Modern Farming; The wider market is a chance for you to farm and sell products beyond your country borders. You will need to practice large-scale or commercial crop, livestock or fish farming. It will help you to produce quality food consistently. This will help you in lowering your farm cost and increase your returns. Best tips for investors in modern farming are soil testing, irrigation and using greenhouses. Others are large-scale production and following good agricultural practices (G.A.Ps.) to set up your brand from other competitors.
- Urban Farming; The continent’s urbanization rate is one of the highest. Studies project that 60% of Africans will be urbanites by 2050. This trend creates a big market for your meat, eggs and vegetables to any country. Plan to do produce right within the city and town boundaries nearest to your consumers. The business ideas in urban-farming are many. For instance, you can raise a small scale vegetable garden, keep a dairy farm or buy and sell food in suburbs.
- Organic Farming; The literacy levels across the continent are improving. It has led to the people to a high demand safe foods for their health. Preference is on white meat and organic vegetables and fruits. You can focus on this profitable niche for your farming business ideas in Africa. You will need to use natural farm inputs for safe products. For more sales, brand and sell your farm products as organic.
Supply farm inputs
Lacking access to quality farm inputs leads to low yields. Access to materials like seeds and animal feeds can increase farmers’ income. You can make money supplying inputs to local and foreign farmers. You can either become a trader or a supplier.
To trade, you need to buy inputs at lower prices and sell at higher one for profits. Besides, you can reach more markets by shipping imports and exports from and to foreign markets. You can rake in more income through online shops and drop shipping models by buying and selling products without physically handling them.
To produce inputs, you can grow animal feeds, breed chicks or make organic manure. You will need to maintain outstanding quality for market dominance across the free trade area. starting this kind of business needs a certificate from the pest control board in your African country.
Provide extension services
Access to timely information can help farmers to make more money. As an investor, collect and disseminate the information that applies to them. It can be on farm inputs like the best seeds, rainfall patterns or farming loans. Other information would be on access to insurance and prevailing market prices.
The region enjoys faster penetration on the internet and mobile phones use. You can therefore use mobile apps, blogs and podcasts for your extension services. This idea will appeal to youth farmers and women investors.
Another idea is agro-tourism. Your farm or company visitors will learn all the lessons needed to make quality food for pay.
Agro and food processing
Selling raw farm commodities is a leading reason for low incomes in the continent. Besides, it is a chief cause of post-harvest food losses. There are low investments in infrastructure like cold rooms, chilled transport, warehouses and processing plants. You can fill this gap by investing in modern agro and food processing plants. Processed products like packaged fruit juices, jams and jellies have longer shelf life during transit from coast to coast and fetch more returns for you.
Equipment manufacturing and distribution
The levels of automation in the sector are low in the region. It makes it hard for farmers to irrigate, plough or harvest large tracts of land within a short time and efficiently. You can tap into this opportunity by fabricating and selling the essential farm equipment like tractors and water pumps.
Where small farmers cannot afford to buy the expensive machinery for meat, crop or dairy production, consider a rental form of business. They will borrow machines from you for use for a specified time.
Food shipping business
Exporting farm products is a multi-billion sector. The intra-Africa trade will grow under the agreement. Food shipping business into a country which is a net importer of food is a high potential. To run a successful business, invest in cheap warehouses, logistics and market linkage services.
Agribusiness consulting
The free trade area market will lead to new value chains across the continent. There is also a need for new policies and regulations as the members move from a free trade area to a common market. It is a chance for agribusiness consultants and think-tanks to help young entrepreneurs in the region to analyze the most lucrative business ideas, write business plans for managing profitable small and large scale farms. They will make money researching on behalf of government, NGOs and donors. The other business idea is lobbying services to the policymakers.
FAQs about AfCFTA
The following are the top 3 questions people ask about AfCFTA
Meaning of AfCFTA?
The AfCFTA means the African Continental Free Trade Area agreement. Watch the video below to understand its meaning, history, objectives and benefits of the agreement to current member countries who has signed the AFCTA like Kenya, Ghana and Nigeria and on key sectors like agriculture, manufacturing and services.
What is the objective of the AfCFTA?
AfCFTA’s aim is to create a common market for 1.2 billion people across the 55 states in the region. The new market will be the world’s largest free trade area with a combined gross domestic product (GDP) of more than $2.5 trillion. The continental agreement will allow for free movement of goods, services, businesses, persons and capital.
What are the benefits of the AfCFTA?
The AfCFTA will boost trade, manufacturing and job creation. Besides, it will create new profitable value chains across the region. As a young person in the region, it is your chance to grab these opportunities in Africa and supply quality goods and services for growth.
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