April 09 2015 Fatou NDIAYE
Agriculture

Rice Growing in Senegal: A Promising Sector for Investors?

As the African continent is struggling to meet its increasing of food self-sufficiency demands, the food market is becoming very attractive for investors. It is also a major market due to the population’s increase of purchasing power over the last years.

The situation in Senegal regarding the most common commodity in the country: rice, is particularly intriguing.

  • US$ 374.2 million[1] imported value in 2013
  • Senegal’s imports represented almost 20% of world imports
  • Yearly consumption in the country is at 74kg per capita[2]

Some people may think that a country that imports yearly a little less than a million tons[3] of broken rice doesn’t have the potential to produce it domestically.

Senegal has a potential of 240 000 hectares that can be exploited with a yield per hectare of around 10 to 12 tons[4]. Thailand, which is one of the main rice suppliers of Senegal, has an average yield of 4 to 4.5 tons/ hectare[5]

Added to this, the climate favorably allows rice producers to work during the winter (June to September) and hot-dry off-season (from March to June) too.

Actually, Senegalese rice production covers around 30% of the local demand (436 000 tons of paddy rice which equals to 283 000 tons of white rice[6]).

The Government’s aim is to achieve 900 000 tons by 2015[7] of local production. To achieve this goal a budget of US $ 152 million is required[8]. This goal seems optimistic given the sort timeline set and apparent lack of funds for it.

To support the upland rice production, the Japanese International Cooperation Agency and the Senegalese Ministry of Agriculture signed this year an agreement for a funding of XAF 2 billion[9]

Despite these significant projects, it’s worth highlighting that rice producers are facing some basic challenges related to the cost of fertilizers, and access to water and lands.

The investment in the soil preparation is also one of the key steps for rice growing. This operation is aiming to ensure the growing productivity. Actually, just 100 000 hectares of lands are sown.

As the Government cannot handle this program alone, private initiatives can boost this market. The example of GADCO Ghana Ltd., an integrated commercial rice producer has set-up a participative approach through its Copa Connect program (500 outgrower farmers are enrolled) aiming to enhance the production and financial benefits for stakeholders.

For a future investor in rice growing, the challenging aspect will be to make people aware of local rice benefits (in terms of quality and taste). To achieve this goal, an aggressive marketing campaign might seem the best way to go.

Fatou NDIAYE, Analyst, Infomineo.

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