Entrepreneurship Zone: 15 September 2021 :: Eight agribusiness ideas to consider in West Africa: Catfish, cassava, fonio and more

Wed Sep 15 10:58:03 CAT 2021

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Entrepreneurship Zone: 15 September  2021 :: Eight agribusiness ideas to consider in West Africa: Catfish, cassava, fonio and more

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Investors and businesspeople highlight eight agriculture-related opportunities to explore in West Africa.

1. Export of niche fast-moving consumer goods (FMCG) from West Africa to the United States. The African Growth and Opportunity Act (AGOA) provides eligible sub-Saharan African countries with duty-free access to the US market for a wide range of products. Michael Clements, head of the West Africa Trade & Investment Hub, a USAID-funded initiative, believes exporters should consider niche FMCG products, like dried mango, various fruit jams, sugar-free chocolate, and canned catfish. “West Africans living in the US love canned catfish and it is flying off the shelves; there are not many American companies producing this product,” he notes.  

2. Adding value to Côte d’Ivoire’s agricultural produce. “In Côte d’Ivoire, crops such as cacao have typically been exported as raw materials and processed elsewhere, but there are opportunities for more value to be captured domestically,” says investor Nouss Bih. She gives the example of Rama Cereal, a business that processes and packages grains and spices – such as millet, maize and ginger – for sale to major supermarket chains like Citydia and Carrefour. 

3. Crop storage solutions hold significant business potential. In Ghana, maize farmers often sell their full yields immediately after harvest. Because of the mechanics of supply and demand, this is not always the best time to make the product available, as the prices drop when the market becomes saturated. Herein lies an opportunity, according to Ben Kemetse, co-founder of M&B Seeds and Agricultural Services. It is one he has considered pursuing himself. “Our market structure is such that if the price falls so much, the farmer may not make any money at all,” he explains. Warehousing with appropriate technology and processes in place to maintain the integrity and quality of the grain would solve a problem for the farmers and provide a potentially lucrative opportunity for the player offering that space, Kemetse argues. 

4. Import substitution of fish in Nigeria. An estimated $600 million of fish is imported into Nigeria every year. According to Danladi Verheijen, managing partner of private equity firm Verod Capital Management, there is an opportunity for the local production of fish products. Verod has invested in the Shaldag fish farm, which grows fish at over 40 times the density of other local fish farms by using modern technology in its operations. The company produces processed, smoked catfish under the Shaldag brand. Says Verheijen: “There are villages in Norway where the entire economy is based around growing a particular type of fish (stockfish) that is sold to Nigeria, and used in sauces and soups. Trawlers from Southeast Asia also fish in the waters outside Lagos and Accra, process the fish in their own countries and then sell the same fish back into Africa. Obviously, this is inefficient and creates an opportunity for African businesses.”  

5. Maintenance support for agricultural machinery. The maintenance and servicing of agricultural equipment (particularly tractors) remain a concern for Nigerian farmers. According to Mira Mehta, founder and CEO of Tomato Jos – a Nigerian operation farming tomatoes for processing into tomato paste – one of their biggest headaches is the maintenance of equipment. Because of a shortage of parts, tractors are sometimes out of commission for weeks. “If you have a business that can provide an efficient service in fixing tractors or industrial agricultural implements, I think it could be a huge success,” says Mehta.  

6. Using agro-waste to produce animal fodder. “Animal fodder production is definitely an avenue someone can look into,” says Abdulai A. Dasana, co-founder and COO of Ghana-based agri-processing company AMAATI Group. “We have a lot of waste in the region from the production of maize and rice, for example, but no company is adding value to this and turning it into animal fodder. During the dry season, animals struggle with a lack of grazing and the owners have to travel many miles to obtain feed for them.”  

7. Producing the super grain fonio in Mali. According to Simballa Sylla, chief executive officer of Mali-based shea agri-processing company Mali Shi, the West African country has significant agribusiness potential, with ample water and even more arable land. One crop that Sylla believes holds promise, is fonio, one of the oldest cultivated cereals in Africa. It is gluten-free, rich in vitamins and amino acids and high in protein 

8. Nigeria: Industrialisation of cassava. Over the years, the supply of cassava derivatives or by-products in Nigeria has fallen short of demand. For instance, the demand for high-quality cassava flour for bread, biscuits and snacks is 500,000 metric tonnes per annum but supply is less than 15,000 metric tonnes. In addition, while demand for cassava starch stands in excess of 300,000 metric tonnes, supply remains below 10,000 metric tonnes, thus giving rise to a gap of over 290,000 metric tonnes. -Howwemadeitinafri

The production of super grain fonio is a potentially lucrative opportunity in Mali. Photo by Richard Nyberg

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DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

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