Africa: Fast finance for the new frontier of food
From informal retailers to supermarket chains, Africa’s baby boomers are fuelling a consumer boom that is spilling over to agribusiness.
Discussing the short list of lunch options in central Lagos, a local small businessman says he has an idea how to get rich, had he the capital – poultry farming. He is not the only one with the idea. Private equity firms, including Carlyle, are on the look-out for such businesses. "There’s no limit to the number of chickens you could sell in Lagos," says Hurley Doddy, co-CEO of Africa-focused private equity firm ECP, half joking. "Fast-food restaurants [in Nigeria] don’t have enough chicken; it’s a huge bottleneck."
Quick-service restaurants (as the private equity industry apparently calls fast food) are doing a roaring trade in Africa. Foodstuffs still deemed a luxury by many Africans, such as chicken, are becoming more affordable, thanks to rising incomes.
Nigeria bans imports of chicken (and an increasing range of other food items). Because of the difficulty of sourcing food of reliable quality and quantity locally, many food retailers have to get round undeveloped local supply chains by taking matters into their own hands.
Take Chicken Republic, with more than 65 outlets in west Africa. Its owner is buying up more than 700 hectares of Nigerian farmland.