OPINION: What are the investment opportunities in Uganda’s agriculture and agribusiness?
By Morrison Rwakakamba
I am in Istanbul for the Turkey – Africa Economic and Business Forum. I have been invited by the African Union and the Turkish Ministry of Commerce to share my thoughts on the potential of agriculture and agri-food processing in Africa in general and Uganda in particular.
The history of Turkey-Africa relations dates back to the mid-1500s when the Ottoman Empire, headquartered in Istanbul, the capital of Turkey, opened trade routes to Africa, starting with Egypt in 1517. L he Ottoman Empire expanded its diplomatic relations and mutual partnership with Kanem Borno. Empire in West and Central Africa in the 19th century.
At a forum in 2020, Turkish President Recep Tayyip Erdoğan said. “The total volume of trade between Turkey and African countries has increased by 381% over the past 27 years and reached $ 26 billion. We will further strengthen our cooperation with the continent in the coming period. We will work together side by side to increase our trading volume up to $ 50 billion. “
Indeed, for Turkish investors looking to establish investments in Uganda, it is clear that they have the opportunity to benefit from the now vast African market enabled by the African Continental Free Trade Area (Africa has 1, 3 billion inhabitants and should have 2.5 billion by 2050), market access without quotas and tax-free in Europe within the framework of the “Everything else but arms” (EBA) agreement and to more than 600 products listed under the Agreement on Growth and Opportunities in Africa (AGOA). Turkey shares a similar time zone with Uganda and is less than six hours from Entebbe, Uganda. There is a direct flight between Turkey and Uganda.
Beyond infrastructure capacity and clear incentives in the Investment Code Law of 2019, I shared with potential Turkish investors specific opportunities in selected strategic agricultural value chains. The Uganda Investment Authority continues to invest in research, data and business intelligence tools that generate clear ROI numbers to help investors make quick decisions to invest their money in Uganda.
The agricultural sector is large, but the eleven agricultural value chains below have the most capacity for optimal and productive yields. Researchers from the Uganda Investment Authority based the above on four parameters, namely the size and depth of the value chain, the growth potential, sustained regional and international competitiveness and the ability to achieve productive gains. So I have listed to Turkish investors the below investment opportunities in agriculture and agribusiness;
A coffee: It is possible to export a fairly average quality (FAQ). Considering the potential yield of 3.4 MT per hectare on the current coffee plantation area at an average price of $ 1,370 per metric ton, there is a potential transformation opportunity of 1.36 million metric tons valued at 1 , 87 billion USD per year.
b) Cocoa: There is an opportunity for large-scale commercial agriculture and cocoa processing with the aim of exporting to the international markets of Indonesia, Malaysia and India. Considering the area available for cocoa cultivation, production at a potential yield of 17.3 metric tons per hectare, and a price of $ 2,175 per metric ton of dried cocoa beans, there is a potential opportunity. processing of dried cocoa of 1.2 million tonnes valued at 2.64 billion USD per hectare. year.
c) Fish: With the available area of 649.95 km2 on lakes Albert and Victoria suitable for aquaculture, there is an opportunity for cage culture. With a potential yield of 1.3 metric tons per 18 cc cage, it is possible to achieve a potential production volume of 18.3 million metric tons valued at $ 31.8 million. In addition, there is an import substitution opportunity of 86,000 metric tons of fish feed valued at USD 112.8 million per year.
d) Sesame: Considering the current sesame production area with a potential yield production of 1.25 metric tons and a market price of $ 1,876 per metric ton of sesame, there is potential for primary processing (cleaning) and further processing. export opportunity valued at USD 186 million per year targeting high-end markets such as Turkey, United States, Republic of Korea, Greece and Japan.
e) Soybeans: With the current area under soybean production and a potential yield of 2.5 metric tons per hectare at a market price of $ 556 per ton, there is a processing opportunity valued at $ 290 million per year. This can be exported to markets such as Spain, France and India which offer the highest prices in the world market.
f) Beans: There is an opportunity for large-scale commercial agriculture and processing to export to regional markets in Kenya, South Sudan, Rwanda, Burundi and Democratic Republic of Congo. Considering the area available for growing beans, production at a potential yield of 1.8 metric per hectare, and a price of USD 982 per tonne of beans, there is a potential dry bean processing opportunity of 476,000 metric tons valued at 468 million USD per year given that the conversion rate of processing beans is 95%.
g) Journal: There is an opportunity for large-scale processing and export of milk to Morocco, Tunisia and the Gulf Cooperation Council countries which are currently importing dairy products from Europe at higher prices. Considering the current number of milk producing animals with a potential production yield of 5,755 liters per year and a price of $ 1 per liter of milk, there is a potential transformation opportunity of 6.1 billion liters valued at 6.1 billion USD.
h) Corn: Commercial agriculture and large-scale processing with the aim of exporting to regional markets such as South Sudan, Kenya and the Democratic Republic of the Congo. Considering the area available for maize cultivation, the potential production yield of 6 metric tons per hectare, and a price of $ 500 per metric ton of flour, there is a potential processing opportunity of 5.4 million dollars. metric tons valued at 2.69 billion USD per year.
i) Cassava: There is an opportunity for large-scale commercial agriculture and cassava flour processing with the aim of exporting to China which imports 2.7 million tons of cassava flour per year. Considering the area available for cassava cultivation, a production at a potential yield of 23 MT per hectare, a conversion rate of 0.75 of cassava chips into flour and a price of 273 USD per MT of flour, it is There is a potential opportunity to transform flour of 27 million tonnes valued at 7.4 billion USD.
j) Poultry: There is an opportunity to close the projected (2025) gap between demand and supply of dressed chicken of 57,100 metric tons valued at $ 235 million at a market price of $ 4,110 per metric ton. It is also possible to establish hatcheries to meet the gap between demand and supply of day-old chicks (DOC) of 41 million day-old chicks valued at USD 28 million.
In addition, there is an opportunity to venture into large-scale laying hen farms to fill the projected regional gap between demand and supply of 291 million eggs worth 26.6 million eggs. million USD.
k) Rice: Large-scale commercial rice cultivation and contract farming through farmer groups established in northern and eastern Uganda. Considering the area available for rice cultivation, the potential production yield of 5 metric tons per hectare and an average price of USD 1,041 per metric ton, there is a potential processing opportunity of 0.9 million metric tons assessed. to USD 2.7 billion per year to meet local needs. demand gap.
At Dubai Expo 2020, President Yoweri Museveni announced to investors around the world that for Uganda now is the right time and place for profitable investments. That’s it …!
The author is the Chairman of the Board of Directors of the Uganda Investment Authority, [email protected]