By Ray Van Rooyen, Head: AgriBusiness, Absa Africa Regions
Aside from the spectacle of a Guinness World Record being broken as more than 1,500 Toyota Hilux bakkies gathered in a single location, this year’s NAMPO Harvest Day, the largest agricultural exhibition in the Southern Hemisphere, which drew thousands of attendees from across Africa, offered a rare glimpse into how quickly the business of farming is changing across the continent.
The conversations unfolding across the exhibition grounds touched on everything from trade tensions and geopolitics to biosecurity risks, export markets, financing pressures, and the growing influence of energy and infrastructure constraints on agricultural production, all pointing to an industry becoming more exposed to forces far beyond the farm itself.
Many of the challenges confronting the sector today are already well documented and deeply familiar to farmers and agribusinesses across the continent, yet there was also a noticeable sense of optimism throughout NAMPO, particularly around the scale of new technologies and practical problem-solving coming to the fore as participants across the value chain search for ways to operate more efficiently within a more demanding environment.
Having spent time engaging with clients and agribusinesses throughout the week, as well as many of the exhibitors, there were three things in particular that stood out.
The competition for exposure
There was an unmistakeable presence of new original equipment manufacturers (OEMs) and suppliers showcasing their products alongside more established brands. This was especially apparent in the commercial and passenger vehicle segment, as well as machinery, logistics, construction, warehousing, and other industries, to the point where it became difficult to view agriculture as a standalone industry operating separately from the rest of the economy.
Naturally, this raised a great deal of curiosity among clients, particularly around how many of these newer entrants are assessed from a financing perspective and what level of confidence producers should place in suppliers still establishing themselves within the market. For many farming businesses, large equipment and vehicle purchases are decisions that carry implications over many years, so there is understandable comfort in knowing a financier, such as Absa, has done the work to properly assess and support a particular supplier before backing that investment.
What the scale of competition and new participation pointed to was continued confidence in the long-term opportunity across African agriculture and the growing commercial interest in securing exposure to the sector.
The integration opportunity
A growing number of farmers and agribusinesses from across the continent attended the exhibition this year, and many of the discussions taking place were no longer confined within national borders.
Some businesses were exploring opportunities to expand operations into neighbouring countries, others were looking at new export routes and trading relationships, while many already have some level of operational integration into another African market through processing or the movement of produce across borders. A farmer exporting produce through a neighbouring country’s port, or a processor handling agricultural output coming in from another market, may not always think of themselves as participating in regional integration in the formal sense, yet those networks are steadily building commercial ties between African economies in very practical ways.
And while cross-border agricultural activity still comes with its own operational and regulatory challenges, there does appear to be growing interest from producers and agribusinesses looking beyond their home markets for partnerships and access to wider regional value chains.
The dollar challenge
While there was a lot to celebrate about the sector, there are still structural constraints that make operating across parts of Africa far more difficult than many fully appreciate. One of the challenges discussed, perhaps not as prominently but still of great significance, was the impact foreign currency shortages are having in certain markets, particularly for businesses trying to import machinery, equipment, fuel, fertiliser, and other inputs that still need to be paid for in dollars.
In countries facing hard currency shortages, producers and agribusinesses can sometimes wait months for access to dollars needed to complete transactions, delaying the import of equipment and inputs or causing businesses to miss pricing opportunities altogether.
These are the kinds of constraints that will not be solved easily, or quickly, and still require far more work from a payments and financial systems perspective across parts of the continent.
For financial institutions operating in the sector, including Absa, these shifts also reinforce how much agricultural growth now depends on broader ecosystem support, from trade and logistics to infrastructure, energy reliability, and access to capital.
Overall, perhaps the biggest takeaway is that while the long-term opportunities in African agriculture are significant, the businesses most likely to succeed over time will be those able to adapt and improve continuously to a far more competitive operating environment. And growth here is not always about operating on a bigger scale; the stronger businesses may simply be the ones becoming more efficient and more sustainable over time without necessarily increasing their footprint dramatically.
Source: Absa.
Photo credit: Absa.
