Private Equity’s Role in Transforming Africa’s Agricultural Value Chains

Agriculture remains one of Africa’s greatest untapped opportunities for sustainable growth and value creation. With a population expected to nearly double by 2050, the continent’s food demand will soar, and agricultural production will be critical not only for food security but also for broader economic transformation. Private equity (PE) has an important role to play in unlocking this potential, particularly by investing in the full agricultural value chain rather than focusing solely on primary production.

Agriculture is already the backbone of many African economies, contributing up to 70% of household income in rural areas. Yet productivity gains have been sluggish compared to global benchmarks. Crop yields in Africa remain about half the global average, and worse, the growth rate of these yields is also about two times slower than elsewhere. For staple crops like maize and rice, this means that yield disparities are not shrinking but expanding over time. In this context, private capital can drive transformative change by enabling investments that enhance efficiency, reduce post-harvest losses, and create downstream value.

Countries such as Uganda, Kenya, Democratic Republic of Congo, Namibia, and Botswana illustrate the potential of agriculture-led growth. Uganda and Kenya already have globally recognised cash crops, including coffee and tea, but diversification into cereals, horticulture, and livestock is essential for resilience. Meanwhile, the Democratic Republic of Congo has an estimated ~80 million hectares of arable land, of which only about 10% is currently under cultivation, showing large potential. Namibia has considerable total agricultural land (about 47 % of its territory is classified as “agricultural land”), but less than 1 % of land area is truly arable (land under temporary crops etc.), and only about 2 % of the land receives sufficient rainfall to grow crops reliably. Botswana has strong potential, especially in livestock, but crop agriculture is constrained by low and erratic rainfall, low yields on many smallholder farms (often <1 ton/ha), limited irrigation, market access, post-harvest losses, and infrastructure. Recognizing these trends, PE firms can help diversify these economies and capture greater value, both locally and internationally, despite challenges of low and erratic rainfall, limited irrigation, poor infrastructure, and persistent post-harvest losses.

To realize these opportunities, PE investors must adapt their strategies to the realities of the agricultural sector. Greenfield investments in farming, processing plants, or logistics infrastructure typically require longer gestation periods than conventional deals. A five-to-seven-year exit horizon is often insufficient; instead, a ten-to-twelve-year perspective is better suited to allow crops to mature, markets to stabilize, and infrastructure to deliver returns. Investors willing to embrace this patient capital model can unlock substantial upside as projects reach scale.

Capital injections will be particularly impactful in high-capex areas such as agricultural machinery, land development, and physical storage facilities. Cold storage, for example, can dramatically reduce post-harvest losses, which can exceed 30% in many African markets. Investments in transportation and logistics firms are equally crucial, ensuring that produce reaches markets efficiently and competitively. Pesticide and input companies also present compelling opportunities, as they directly enhance productivity for smallholder farmers, the foundation of African agriculture. Indeed, improving smallholder productivity is central to economic development: a 1% rise in agricultural GDP has been shown to generate a 6% increase in income growth for the poorest 10% of households.

Finally, PE firms entering this space must assemble teams with deep managerial expertise in scaling agricultural enterprises. Africa’s markets are complex and fragmented, requiring careful navigation to optimize operational costs, adapt to local conditions, and build resilient business models. The combination of patient capital, strategic investment in value chains, and experienced leadership will be critical to unlocking Africa’s agricultural promise.

At Frontier Dominion, we believe the time to act is now. For investors seeking to capture long-term value in Africa’s agricultural transformation, reach out to us at contact@frontierdominion.com to explore how we can partner on this journey.