Agricultural opportunities in Africa Crop farming in , Nigeria and Tanzania Our point of view August 2017 Agricultural opportunities in Africa | Crop farming in Ethiopia, Nigeria and Tanzania Introduction

Through the apparently good years of Seeing strong growth potential in the Given the continent’s rising income levels and Africa remains the only the commodity supercycle, most African continent’s food sector, Deloitte Africa its large and rapidly growing population, food region yet to experience economies grew rapidly, providing fuel for the conducted a detailed agricultural sector demand is expected to soar in the medium popular “Africa Rising” narrative. However, since analysis to help highlight and inform our term, creating new growth opportunities a “Green Revolution” the mid-2014 oil price shock, GDP growth for clients on which countries currently provide for producers in the sector. By 2030, 20% of Africa as a whole has dropped dramatically, considerable agricultural investment the world’s population is expected to be in just as been the case across global emerging opportunities. The specific focus is on the Africa. As the continent’s population rises, the markets. The slump in oil prices had very continent’s main food crops. pressure on Africa’s food supply will require negative implications for many African substantial investment, in order to guarantee economies, as well as for many companies Our report explores crop production food security. Most of this will have to be that had invested in them. But some regions opportunities and finds that three crops in private. have coped much better than others. The three countries – namely, in Ethiopia, continent’s new normal is now a multi-speed cassava in Nigeria and in Tanzania – have The question for investors is which markets to Africa where some regions and economies are considerable investment potential. The risks target. Though most of its markets will remain thriving while others are struggling. and challenges involved in production of the complex in the medium to long term, Africa identified crops in the respective territories remains the only region yet to experience a Thanks to the relative success of some are assessed. Gaps that can be filled through “Green Revolution” and thereby presenting vast regions in Africa the continent has managed private investment in each crop value chain, opportunities across its territory for players in to outperform other commodity-dependent as well as issues that need to be addressed the agricultural sector. emerging markets recording average real GDP to enable greater foreign investment, are growth of 3.1% per annum. The economies that also identified. have actively promoted export diversification are now leading the way, with East Africa projected to continue showing strong growth in coming years.

2 Agricultural opportunities in Africa | Crop farming in Ethiopia, Nigeria and Tanzania

Contents

Agriculture in Africa 04

Wheat in Ethiopia 09

Cassava in Nigeria 20

Maize in Tanzania 29

Key takeaways 39

References and contacts 41

3 Agricultural opportunities in Africa | Crop farming in Ethiopia, Nigeria and Tanzania Agricultural opportunities in Africa Key sector trends and priority markets

4 Agricultural opportunities in Africa | Crop farming in Ethiopia, Nigeria and Tanzania Agriculture as a growth driver in Africa

Rising agricultural FDI Growing disposable income Rapid population growth Global food consumption growth inflows and value added

China currently feeds a fifth of the world’s Driven by strong GDP growth over the 2000-16 Africa has the second largest share of the Between 2006 and 2015 foreign direct population on a tenth of the world’s arable land period, Sub-Saharan Africa’s (SSA) per capita world’s population after Asia and the youngest investment (FDI) inflows surg