Are you an investor interested in putting your money in agriculture in the East African Community (EAC)?
A study by East African Business Council (EABC) in partnership with Sequa GmbH under the Business Scouts Fund and GIZ Business Scouts for Development offers useful insights on investment opportunities in the region.
The study aims to address the region’s low foreign direct investment in agriculture, its reliance on food imports and vulnerability to global shocks.
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The study shows Foreign Direct Investment (FDI) into the EAC region increased marginally between 2015 and 2021, primarily driven by investments from China and India, but the majority of the money has been directed towards the manufacturing, construction, and services sectors, rather than the agricultural sector.
The study reveals significant potential for developing value chains in wheat, edible oil (soya beans, sesame, palm oil), fertilisers, tubers (potato and cassava) and leguminous plants within the EAC.
These findings were revealed during a recent webinar on profiling investment opportunities in selected value chains in the EAC. The study noted that the sector’s performance is hindered by challenges such as low production and productivity, technology development and transfer, post-harvest management and storage, trade and marketing, and policy-related issues.
The economies of the EAC partner states are dominated by the agriculture sector, which is also a leading employer for over 80 per cent of the population in the region. The contribution of the agricultural sector to the Gross Domestic Product in the partner states ranges from 20 percent to 40 percent.
More than 70 per cent of the industries in the EAC are agro-based and depend on agriculture as the main source of raw materials and the intra-regional trade is mainly composed of agricultural commodities.
The webinar emphasised the need for collaborative efforts among EAC partner states, development partners, and the private sector to address the aforementioned challenges. It was noted that increased investment in the value chains would create employment and increase resilience against agri-food disruptions amid global shocks.
The GIZ Business Scout Fund-EABC project seeks to enhance the competitiveness of the agri-food industry and mitigate the impact of global crises to improve food security in the EAC region.
The webinar brought together high-level policy decision-makers and over 60 agri-value chain actors to validate the study.
Mr John Kalisa, CEO of EABC emphasised the importance of scaling up the agricultural sector’s performance to boost intra-regional trade and investment.
‘‘There is need for deliberate action to build agricultural resilience in the region, particularly in response to global crises,’’ said Kalisa.
EABC plans to showcase the study’s results on investment profiles on digital platforms and engage value chain actors in joint ventures and capacity-building initiatives under the project.