Tuesday, 5 October 2010


The evening sun is setting on Francis Grogan’s Zambian farm and the combine harvesters are finishing their work for the day. Francolins scuttle in their wake and herons pick at the ground where wheat has been growing.
But instead of letting the farmland lie fallow until next season, Mr Grogan will soon be planting again.
“The land is so good here that there’s no need for it,” the Irishman and managing director of Zambeef, one of sub-Saharan Africa’s largest food producers, told the Mail & Guardian of South Africa.
“The sun shines all day and there is plenty of water for irrigation, which means we can double-crop. Once the wheat is harvested, we’ll plant the maize and sorghum.”
Long regarded as the poorer cousin of its Zimbabwean neighbour, Zambia is fast gaining attention as a desirable destination for agricultural investors.
International investors from Britain to South Africa have begun putting money into infrastructure development and transport, and about 200 exiled Zimbabwean farmers have taken leases from the Zambian government to develop farmland in the country.
Companies such as Zambeef have risen on the back of a growing Zambian middle class, whose incomes and expectations are rising. From humble beginnings in 1991 in Lusaka, where the business started as an abattoir and two butcher shops, Zambeef is now a Sh16 billion ($200 million)-a-year company.
It is the largest meat producer in Zambia, slaughtering more than 60,000 head of cattle and 3.5-million chickens a year.
“We have a lot more water than Brazil, there is plenty of rainfall and solid support from the government. This is an excellent country to invest in,” Mr Grogan said.
The question now on many people’s lips is: Could Zambia become the next breadbasket of Africa? It certainly has the potential. Of a total land area of 752 000km2, 420 000km2 is classed as having medium to high agricultural potential. But only 15 per cent of arable land is cultivated, according to the World Bank.
Despite this, last season’s maize harvest satisfied domestic consumption more than twice over, according to the International Trade Centre in Geneva. Of a total harvest of 2.7-million tonnes, only a million tonnes of maize was absorbed by the home market. The surplus will be exported.
Although economic growth has averaged 5 per cent over the past decade thanks to a roaring demand for its copper, the agricultural industry has floundered.
Agricultural growth has averaged less than 1 per cent annually. Only 1 per cent of small farmers have access to electricity and just 28 per cent have access to a public water supply, making irrigation all but a dream for many.
Despite the country’s potential, 80-90 per cent of its farmers still work on small-scale or subsistence operations. Access to finance and capital is also a problem.
The Zambian National Farmers’ Union says “Zambia’s market for agricultural finance is fundamentally dysfunctional”.
Despite this, the tremendous possibilities have continued to attract investors, with a delegation of Indian commercial farmers expected in December.
The United Nations Food and Agriculture Organisation says that if Zambia could equal agricultural activity in Kenya, a country where two-thirds of the land is semi-arid, output would amount to Sh120 billion ($1.5 billion) a year –10 per cent of Zambia’s GDP.
Walmart comes shopping
A takeover by the world’s largest retailer Walmart Stores, may mean a change of strategy for South Africa’s Massmart Holdings. Following the announcement that American retail giant, Walmart, has made a non-binding offer to buy out Massmart, analysts said the local company would have to step up its focus on other African markets.
Massmart, owner of retail chains including Game and Makro, already operates in 14 countries in sub-Saharan Africa.
“Their (Walmart’s) plan is to get a bigger footprint in Africa,” said Abri du Plessis, chief investment officer at Gryphon Asset Management. “I think they’ll definitely push for Massmart to become more aggressive in Africa.”
Du Plessis said Massmart alone won’t help Walmart achieve the desired footprint, and it would need more acquisitions – probably further north on the continent – according to Fin24.com.

No comments:

Post a Comment