Is Livestock Africa's Next Big Investment Opportunity?

It is one of the fastest-growing economic sectors across the African continent. It could help answer some of Africa's most pressing challenges, including food and nutrition security, employment, climate adaptation, and gender equality. Yet it is chronically underexploited and underfunded by both donors and governments.

Livestock could be Africa's next investment opportunity.

Africans are eating more animal products, as their population grows and their incomes rise. In 2013, the average person on the continent annually consumed around 20kg of meat and 45kg of milk — by 2050 this is projected to increase to more than 25kg of meat and almost 65kg of milk. Meanwhile, Africa's population is expected to nearly double to 2.2 billion in the same period.

Africa's domestic livestock sector has been expanding as a response. Animal agriculture already contributes between 30 and 80 percent of agricultural GDP across Africa, and in some countries, it is the fastest-growing agricultural sub-sector. In East Africa, more than USD$1 billion is generated annually through the export of live animals and meat to the Middle East and North Africa.

Millions of Africans rely on livestock for their livelihoods, and it has great potential to generate much-needed employment opportunities — especially for women and young people — ranging from research to production, marketing, and trade to help meet demand.

Yet most African countries still heavily depend on imports of livestock products, and productivity in the sector remains low. Africa has not been able to translate its livestock potential into value-added products that can generate higher income and well-paid jobs. The continent largely exports unprocessed animal products internationally and re-imports them in processed form.

Why? To begin with, health and safety standards continue to present a challenge for many of Africa's livestock producers, preventing them from accessing markets.

And while there has been progress across Africa in improving animal feed, the availability of affordable, high-quality feed is a major challenge to raising productivity.

Given these barriers, African livestock producers may be unable to satisfy the continent's growing demand. In 2050, up to one-fifth of the beef, pork, poultry, and milk consumed in Africa will come from elsewhere without significant investment in the sector.

Yet, as pointed out in a new report from the Malabo Montpellier Panel, with carefully planned interventions, African food systems can be radically and sustainably transformed.

Some are as simple as growing new types of fodder trees and shrubs, which provide highly nutritious leaves for livestock consumption, grow fast, and fix nitrogen in the soil, thus improving fertility of the land on which they are grown. Within two years of planting Calliandra calothyrsus in East Africa, for example, its use as an animal feed substitute for dairy cows led to an increase in milk production, boosting incomes from USD$62 to USD$122 per year in 2003.

Other interventions will require concerted efforts and large investment, such as the development of clear and harmonized regulations to promote high-safety, quality, nutritious, and sustainable livestock activities. In addition, Africa's livestock sector, including animal health and research, will need to be better funded. Supportive financial services, including tailored insurance products, will also need to be designed. Furthermore, the animal feed sector will need to be improved upon to boost productivity.

While the increasing demand for animal products across the continent offers a number of opportunities for African economies, risks also need to be recognized when devising policies to avoid compounding challenges such as climate change and health. For example, livestock systems are a significant contributor to greenhouse gas emissions and climate change. Cattle, buffalo, sheep, goat, and chicken production in Sub-Saharan Africa emitted an estimated 403.5 million tons CO2 eq. in 2010. Moreover, the livestock sector is highly vulnerable to the impacts of rising temperatures, which are projected to increase water stress as well as the frequency of droughts and floods, causing lower crop yields and higher livestock mortality.

Furthermore, although livestock products are nutritious, their unsafe production, storage, and consumption can make people ill. Livestock can be a reservoir of pathogens responsible for animal-borne illnesses, such as gastrointestinal diseases, avian influenzas, and tuberculosis. On the other hand, through excessive or incorrect use of antibiotics in farm animals, livestock may also be a contributor to antimicrobial resistance.

Interventions, therefore, need to be designed while keeping these risks in mind to allow the livestock sector to provide the solution to some of Africa's most pressing development goals.

With the right policies and investments, livestock could help feed a fast-growing African population in a healthy manner, while respecting the environment and providing job opportunities for those who need them, especially young people and women. So why wait?

Ishmael Sunga is the Chief Executive Officer of the Southern African Confederation of Agricultural Unions (SACAU), and a member of the Malabo Montpellier Panel.

Photo source: Garissa Cattle Market in Kenya. Credit: USAID/Mariantonietta Peru. Source: https://www.flickr.com/photos/usaidkenya/6126639277. License: https://creativecommons.org/licenses/by-nd/2.0/.