One day, the world may go to war over rice. Food is the new oil.
About 795 million of the world’s people, 200 million of them children, are hungry. Most of them are in Africa and Asia. It will cost $267 million per year to end world hunger by 2030. That is $160 annually for each person, according to the United Nations.
The business of food could be the business of the future. Most of the world is putting bricks and concrete over its fields and importing food. This could mean good business for entrepreneurs who harness the fertile red soil of Africa.
FORBES AFRICA dedicates this issue to food and the investment case.
Over 60% of the world’s arable land is in Africa, 65% of Africans work in the fields and 35% of South Africa’s gross domestic product (GDP) comes from agriculture and food, according to Old Mutual Investment Group’s Director of Strategic Projects, Craig Chambers.
At least $25 billion in food imports are coming into Africa; and food is wasted on the continent.
According to Duncan Vink, Joint Managing Director of UFF Agri Asset Management, 39 million hectares of agricultural land in Africa is physically suitable for irrigation but only 7% of this farmable land is currently irrigated, and in sub-Saharan Africa that figure is only 3.7%.
“There is no doubt that the opportunity within African agriculture is really vast, we have a decent pipeline of anything between $200 and $400 million in opportunities in Africa,” says Chambers.
For years, farming was going out of fashion but entrepreneurs are rediscovering it. Necessity may prove the mother of food production ripe for investment.