Overview

We are living in unprecedented times. What a year it has been. We began planning for this survey in the last quarter of 2019. At the time, COVID-19 was a distant phenomenon, happening somewhere else, in another continent. Before we knew it, and as we launched the survey in March 2020, most countries in Sub-Saharan Africa had implemented lockdown procedures. Travel, in some cases, within country was banned. In 24 hours, many businesses had to close operations to comply with the measures aimed at containing the pandemic. Very few businesses could have planned for this drastic scenario. Governments faced a delicate balancing act – prevent the explosion of a public health crisis and the possible implosion of our health systems or preserve the economy. Either way, it was not an easy choice.

And yet, we must continue. In the midst of the pandemic, we have been heartened by the responsiveness of the African business community to this inaugural Agribusiness Survey. Many CEOs, company founders, senior executives made time and were keen to share their views through one-on-one interviews conducted via Zoom links and through an online survey. A lot of businesses are struggling but they are also determined to survive COVID-19 and emerge stronger.

It is against this backdrop that we seek to understand the priorities, opportunities and constraints for businesses operating within the agricultural ecosystem in Africa. This 2020 Survey will form a baseline for the private sector working in the agribusiness ecosystem in Africa. The intention is to track priorities for the private sector over the next few years, to gain insights on what matters most to them at any particular moment in time. We expect that these topical insights will enable policymakers to respond to businesses in a more agile manner.

Finally, our expectation is that with this report, we will give voice to the private sector and outline potential pathways for actions that would result in a thriving agribusiness sector in Africa.

Agenda for Action

Provide more Flexible
Financing Structures

Increase Productivity of Smallholder Farms

Reduce the Cost of Money

Increase Advocacy for Infrastructure

Deliver Catalytic Finance

Increase Government Spending on Agriculture

Create more Public-Private Partnerships for Infrastructure

Increase Private Sector Investment in Agriculture

Increase Massively, Financing Across Value Chains

Develop Affordable Technologies for Africa

Adapting in a COVID-19 world

Surviving COVID-19, managing cash, not going out of business – these are some of the issues that are top of mind for many of the respondents. Indeed this year will prove to be one of the most challenging years in modern history in Africa as key markets collapsed overnight following the imposition of lockdown measures by governments across the continent. In countries where lockdown measures were not as severe, such as Tanzania, respondents interviewed said they remain unsure of the true situation. This is not good for business, given the lack of data to inform decisions.

The size of business was a big differentiator in terms of how they responded to COVID-19. About 43% of companies in the survey, majority of whom are SMEs, indicated they would be reducing their operations due to COVID-19. For these businesses, we found in our interviews that revenues had fallen by 50% and, in some cases, by 80% this year.

Cashflow did not appear to be such a big issue for many of the multinational companies, at least for now. If the COVID-19 situation persists, it is prudent to expect an impact on companies’ cashflow.

Surviving COVID-19 Finance & Technology

In our survey, we found that over 52% of the businesses have determined that technology is critical to thriving in COVID-19 times. Indeed, many businesses were quick to adapt. For example, Zimbabwean seed producer, SeedCo, said it was now delivering agronomic advice digitally, to smallholders via channels such as Whatsapp. For larger and more sophisticated farmers, Zoom was the main channel of choice. Going forward, this will have implications for the business model. The use of technology has reduced the cost of delivering extension services and several of the companies we interviewed said they were unlikely to go back to

Transforming Agriculture in Africa

GROWING AFRICA’S AGRICULTURE

Founded in 2006, the Alliance for a Green Revolution in Africa (AGRA), is an African-led African-based organization that seeks to catalyze Agriculture Transformation in Africa. AGRA is focused on putting smallholder farmers at the center of the continent’s growing economy by transforming agriculture from a solitary struggle to survive into farming as a business that thrives. As the sector that employs the majority of Africa’s people, nearly all of them small-scale farmers, AGRA recognizes that developing smallholder agriculture into a productive, efficient, and sustainable system is essential to ensuring food security, lifting millions out of poverty, and driving equitable growth across the continent.

Partners

Agribusiness Outlook 2020 is an initiative of AGRA and KPMG Advisory Services Limited, in partnership with AGRA PIATA members.

How can I reach the Agribusiness Outlook team?

+254 786 220 002, +254 733 614 611

Valentine Miheso, Program Officer, Partnerships, AGRA

vmiheso@agra.org

Betty Otieno, Executive Assistant, Partnerships, AGRA

botieno@agra.org

Alliance for a Green Revolution in Africa (AGRA)
West End Towers, 4th Floor
Kanjata Road, off Muthangari Drive, Off Waiyaki Way
Nairobi, Kenya
P.O. Box 66773

Please provide us with your feedback on the inaugural Agribusiness Outlook 2020, or engage us if you would like to take part in the next survey.