GLOBAL food price hikes may trigger investments in sub-Saharan Africa's agriculture sector, according to the South Africa's Industrial Development Corporations.
The World Bank recently warned of a rise in food prices which it said threatened social stability in poor countries.
But according to a paper presented at the fifth Africa Economic Forum in South Africa, IDC head of the research and information department Jorge Maia noted that the food price spikes that threaten food security and poverty levels in sub-Saharan Africa may also present the region with opportunities.
"High food prices have improved the margins for food producers, and it therefore has the potential to stimulate new interest in investments in agricultural development in sub-Saharan Africa," he said.
Maia said the continent's food production potential, specifically in sub-Saharan Africa, was enormous, adding that investors, driven by an increasing global demand for food, were already looking at Africa and its farmland.
"First of all, Africa grows pretty much everything, from cassava, corn and wheat to sugar and other crops. Secondly, about 45 per cent of the land that is available globally that is not used for agriculture but can be used for this purpose...is situated in Africa south of the Sahara," he said.
Maia however said the region's agricultural potential to a large extent has remained untapped.
"Just 25 per cent of all arable land suitable for rain-fed agriculture in sub-Saharan Africa is used for this particular purpose," he said.
Maia said investments in the African agricultural sector are crucial for improving the region's food security and also need to come from the private sector, and not just from the public sphere.
"Public investment in Africa has become biased towards urban areas and has moved away from rural areas," Maia noted. "We need partnerships."
According to Maia, it is crucial that investments target not only Africa's commercial agricultural industry.
"Small-scale farmers are responsible for a large part of the continent's food production, and are crucial players when it comes to improving food security in the region. Yet, it is estimated that an average farmer in sub-Saharan Africa produces 30 per cent of his or her yield potential," said Maia. "To improve this, their access to markets and capital funding needs to be improved as well as their access to fertilisers and irrigation infrastructure. Investment should not just focus on expanding Africa's cultivation area. It should focus on increasing yields."
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