• Wednesday, April 17, 2024
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BusinessDay

Africa has a market size worth over $900 billion

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SIAKA MOMOH

Contrary to conventional knowledge, Africa is a rich continent replete with unexploited potentials

As opposed to the tag of poverty that is traditionally slammed on Africa, Africa is a rich continent; richer than people think. This positive revelation is contained in Africa Wealth Cheque Report, launched recently by Africa investor (Ai), a leading international investment research and communications group, in partnership with The Africa Group (TAG), an Africa-focused consulting, research, and advisory firm.

The report says Africa can be likened to a private investment which investors who are willing to take on risks should pursue, for its enormous potential market opportunities. It says Africa is unique because incremental dollars invested into Africa will begin to unlock a previously inaccessible market of equal or greater size than the Africa of now.

The Wealth Report has identified US $1.671 trillion of potential wealth and additional production potential in six key sectors: agriculture, water, fisheries, forestry, tourism, and human capital. This represents a combined market size today of $909 billion and $762.4bn of additional potential production. The report also estimates current proven stocks of extractable energy resources in Africa (oil, natural gas, coal, and uranium) to be worth between $13trn and 4.5trn.

Explaining the Africa Wealth Cheque Report, Hubert Danso, vice chairman and managing director of Africa investor, said: “The aim of the Africa Wealth Cheque Report was to identify and estimate how much natural, economic and human capital wealth is within the continent, in essence, to quantify the beginnings of the asset side of Africa’s balance sheet.”

And on the importance of the report, Danso went on to say: “The report is unique as it is already catalysing debate about how wealthy, as opposed to how poor, the continent is, and signalling tipping points for African governments and global investors seeking growth opportunities.”

Africa investor-TAG says there is nearly three times the average multiple growth potential in the agriculture sector, stemming from projects such as the $780 million Zambezi Integrated Agricultural-Community Development Programme, forestry (to $111bn) and fisheries (to $44bn), and a doubling of the market for water to $25bn; and that an additional $217bn may be spent on human capital inputs, in terms of wage return growth across the service, industrial, and agricultural sectors.

This report should serve as a wake-up call for Nigeria. Nigeria ranks 20th on the 2006 Global Hunger Index. About 65 per cent of Nigerians are food insecure, that is, have insufficient access to the amount and variety of food for a healthy and productive life. Malnutrition is widespread; about 40 per cent of children are stunted, 9 per cent are wasted, and 25 per cent are underweight. Micronutrient deficiencies in vitamin A, iron, and iodine are also widespread.

This food insecurity and malnutrition is as a result of our inability to exploit the full national agricultural potentials. Nigerian agriculture is dominated (about 90 per cent) by its over 14 million smallholder farmers. The average yields of major staple crops remain far below most of the other developing countries.

Nigeria’s agriculture is mainly rain fed and has not taken full advantage of its irrigation potential estimated at between 2 and 2.5 million hectares. The area under irrigation is officially estimated at about 220,000 hectares, or less than one per cent of the total area under crops. The contribution of irrigated agriculture to crop production is therefore very small. And our potential is largely untapped. The solution therefore, is to tap to the fullest our agriculture potentials. We have an advantage over the developed world on this issue. They have tapped their potentials almost fully if not fully.

The Alliance for a Green Revolution in Africa (AGRA) and the International Center for Soil Fertility and Agricultural Development (IFDC) are concerned about this Nigeria’s problem and are out to help. This is an opportunity Nigeria must not let go.