Sustainable Business Summit | New York
Roundtable: Investing in a Sustainable Africa: Focus on Agriculture
December 7, 2022
The Bloomberg Sustainable Business Summits brought together business leaders and investors globally to drive innovation and scale best practices in sustainable business and finance. In this roundtable, panelists discussed the challenges facing the African agricultural industry, as well as actionable solutions to create a more sustainable future.
Speakers included:
- William Asiko, Vice President, Africa Regional Office, The Rockefeller Foundation
- Dan Dye, CEO, Ardent Mills
- Dr. Lello Francisco, Administrative Council, AIPEX
- Harry Green, Chief Financial Officer, African Agriculture, Inc
- Steve Mathews, Senior Vice President, Financial Services, Gro Intelligence
- Ivanova Reyes, Economist, Regional Studies Division, African Department, International Monetary Fund
- Ivan Emanuel Marques dos Santos, Secretary of State, Angola
- Vikki Tam, Partner, Bain & Company
- Bryan Woliner, Chief Financial Officer, Root Capital
Bloomberg participants:
- Jennifer Zabasajja, Anchor, Bloomberg Quicktake
Event highlights:
Facilitating Internal Production in Africa
Following introductions, the roundtable discussion began with Jennifer Zabasajja, Anchor, Bloomberg Quicktake asking the panelists about the challenges facing the agricultural industry in Africa. To this day, much of Africa’s economy is centered around the exporting of raw materials to global markets. However, this focus on exports has not led to economic prosperity for the continent as it has in other regions. Ivanova Reyes, Economist, Regional Studies Division, African Department, International Monetary Fund pointed out that “Exports are not an engine of growth in Africa like it has been in Asia.”
The panelists generally agreed that this issue must be remedied by more internal processing production from within Africa. Dan Dye, CEO, Ardent Mills stressed that “What’s most effective is when you can bring that processing and that value-add in-country versus just exporting raw materials.” Harry Green, Chief Financial Officer, African Agriculture, Inc concurred with this assessment, saying that “The key is to take the resources of Africa and make them productive within Africa.”
Foreign interests still do not see internal production in Africa as a viable investment, preferring instead to import their raw materials and process them elsewhere. Dr. Lello Francisco, Administrative Council, AIPEX remarked “How does the United States see Africa? They see it as a source of raw materials, they don’t find it very interesting to produce or invest there.”
Focus on Infrastructure
The greatest hurdle in Africa transitioning away from an economy dominated by exporting raw materials and into greater internal production is the underdeveloped value-chain infrastructure that plagues much of the continent. Vikki Tam, Partner, Bain & Company said that “Historically, a lot of the development efforts really focused just on farmer productivity. There is an emerging consensus that more attention and more funding needs to go to the middle of those value-chains, to the firms that sit in there, whether they are processors or aggregators.”
A lack of quality infrastructure can cause dramatic inefficiencies, especially in an industry that is as sensitive to time as agriculture. Harry Green, Chief Financial Officer, African Agriculture, Inc said that “Depending on the region, 10%-40% of agricultural production is wasted due to products going bad or becoming spoiled. They’re getting transported in sacks, there aren’t good storage systems. These are problems that have to be fixed if you want scale.”
The absence of valuable, physical infrastructure can create hesitation amongst financial lenders who fear the lack of claimable collateral in the event of African borrowers failing to repay loans. Bryan Woliner, Chief Financial Officer, Root Capital remarked that “One of the challenges is that a lot of the enterprises we often lend to don’t have the collateral that traditional banks are looking for.”
This issue of weak infrastructure can only be addressed with the active participation of African governments. William Asiko, Vice President, Africa Regional Office, The Rockefeller Foundation advocated for serious government initiatives towards investing in infrastructure, saying that “You can transform a food system in three weeks.”
This Sustainable Business Summit roundtable is Proudly Sponsored By
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