Friday, September 22, 2017/9:59 AM/ Blackpace Group
The government of Nigeria and Rwanda have signed a multimillion dollar deals with a Nigerian investor, the Blackpace Africa Group, to revamp and develop their potato industries and help to upscale potato production, as well as set up potato processing facilities in the both countries.
In Rwanda, the five-year project worth US $120 million involves building of two potato factories; one in the Kigali Special Economic Zone for frozen French fries, and another in Nyabihu District to produce potato products for the export market.
The group will also build a world-class processing facility, which will process 60,000 tons annually of Irish potatoes into French fries, flakes and crisps in the Nigerian Plateau State as part of a US $103 million project.
Africa's Potato Economy; The Value Chain Addition
Potato in Africa's agriculture economy is often considered solely as food substance. Too often the full economic potential of the potato value chain to the region's economy and importance in contribution toward providing food security in the continent is overlooked.
A recent study by BlackPace research highlighted that the Irish Potato, which currently is the fourth most important staple in the world, made a significant economic contribution to the GDP of potato producing countries in the continent. Coupled with providing high nutritional value and health benefits, however most African countries producing potatoes have not made efficient use of its importance.
Some critical issues affecting this are linked to lack of understanding of the potato value chain, the potential economic impact, as well as the potential export component to drive Africa’s Agric-economy to the next level. This is compounded in some cases by poor agriculture policy judgement of some African states, as well as failures in formulating appropriate investment strategies.
Why Africa's Potato Value Chain?
In a recent research study by Washington State it was acknowledged that the "The potato industry in Washington State generated approximately $3.07 billion in direct economic output from the five sectors in the industry – potato farming, frozen potato processing, fresh packed potatoes, dehydrated potato products, and potato chip manufacturing. Indirect and induced effects of this economic output generated a further $4.35 billion in economic activity in the State".
According to the report "Direct employment in the potato industry sectors was approximately 5,846; direct employment also lead to the creation of a further 30,014 jobs in Washington State. Alternatively, every job in the potato industry supported a further 5.1 jobs in the economy in sectors such as support services for agriculture, transportation, wholesale trade, real estate, and food and beverage retail stores.
In the African context using two countries as an example, Nigeria and Rwanda we realised that both economies have not maximised their Potato Value Chain to fully effect stronger economic benefit that could be provided to these countries. Nigeria for example produces about 800,000 tons annually from over 550,000 hectares, however the economic value to Plateau state is less than $20m.
Looking at similar case in Rwanda, over 2.3m tons of potatoes are produced from 166,000 hectares and its economic value to the state is less than $50m. This is why there is the need to scale up and create further investment opportunities for potato farmers, and the need to strengthening processing firms and distribution outlets.
BlackPace Africa Potato Investment Rwanda and Nigeria
BlackPace Africa's Cros Agro has significant interest and is investing hugely in Africa's Potato value chain. Currently there's a joint venture/PPP agreement with the Plateau State government to scale up potato cultivation and processing. An initial investment of $65m USD has been put together and in completion a total of $103m USD would have been invested. This will create a financial boost to Plateau State's economy and create over 3,000 new jobs.
A similar investment is being undertaken in Rwanda, where the estimated Potato value chain will add close to $3.5billion to Rwanda's GDP within the next 5years if the investment is properly executed with the support of internal and external stakeholders. Our strategy is to boost the economy of Africa using simple, tried and tested strategies in the Potato value chain. Beyond the food security objective, the plan is to have Africa increase its Potato economic potential and maximize growth as a global player.
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