KPMG paves the a way for Agribusiness in Africa | KPMG | ZA

KPMG paves the a way for strategic Agribusiness solutions in Africa

KPMG paves the a way for Agribusiness in Africa

The recent drought crisis in South Africa has left a lot of businesses and families with dry pockets. Most dams have dried up and this has left the country with a severe water shortage. It is against that backdrop that KPMG in South Africa recently invited Ian Proudfoot, Global Chairman of Agriculture, to South Africa - to share his insights on the El Nino drought that affected New Zealand.

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Dean Wallace, Sector Leader for Consumer Markets at KPMG, says that Proudfoot’s insights were instrumental in providing a clear direction for the country and Africa at large. 

“We are glad to have hosted Mr Proudfoot because he was part of a progressive discussion that featured thought-provoking sessions and real-life examples of on-the-ground agriculture solutions.  This was, indeed, an essential platform on which we had frank discussions, heightened awareness, raised standards, and educated all stakeholders on food inflation and the strategic role of agriculture in South Africa,” says Wallace. 

The roundtable session looked at how South Africa can draw lessons from the El Nino event which took place in New Zealand, and what of these lessons – if any – can be applied within South Africa. The discussions also touched on the impact that El Nino has already had on water levels in the South African Development Community (SADC) – and as a direct result crop and stock farming in the affected regions. There was also an opportunity to anticipate what losses can be expected for Agribusiness operating in the affected regions across SADC and the session also focused on the resulting impact on food price increases – and the cost to end consumers.

Chief Economist at KPMG, Lullu Krugel, says that the recent drought has left the country under a great deal of pressure and has resulted in food price inflation reaching double digits.

“The drought has had, and still having, a significant impact on especially poorer households. Basic food stuffs such as grains and cereals are 15 percent more expensive than a year ago. Vegetables are as much as 25 percent more expensive. In addition, with the weaker rand, imported products are also more expensive and increasing interest rates have put strain on the ability of households to absorb these increases. Unfortunately, even with the El Nino effect now weakening, it will take an entire season of production to see these impacts reducing,” says Krugel. 

Just as crucial, KPMG also looked at the future and the mega trends that will have the greatest impact on Agribusiness in Africa. Here are some of the topics that were discussed:

  • Urbanisation versus realisation: many African countries are undergoing massive development, are we too focused on people coming into cities to find jobs in-stead of creating job opportunities for people through reindustrialisation
  • Challenges with feeding growing populations across the world and: looking at markets like India and China – what should Africa be doing to further secure its food resources
  • Food security, water security, manufacturing, beneficiation and building greener economies: are African governments and Agribusiness, alike, staring down a nexus with too many strategic objectives? Where should the focus be placed?

“Ultimately, the knowledge and exercises that were shared during these sessions will, undoubtedly, help pave a way for South Africa’s agricultural goals, and help to create a strategic roadmap for our country by generating numerous positive agricultural and economic resolutions,” says Wallace.

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