Since 2016, the value of Irish food and drink exports to Africa has almost doubled. In 2021, Africa remained one of the strongest export regions in growth terms, with growth of 8%, reaching nearly €880m for Irish food and drink.
Almost one-quarter (24%) of these exports were destined for Nigeria, worth €211m.
Egypt has become the second largest export market in Africa, ahead of Algeria, which was second in 2020.
One-third of Africa’s wheat imports from Russia and Ukraine
The trading environment in Africa is becoming increasingly challenging due to commodity prices and food price inflation.
According to the UN report, Global Impact of War in Ukraine on Food, Energy and Finance Systems, one-third of the wheat imported by 45 African countries comes from Ukraine or Russia. East African countries are particularly exposed with 90% of their wheat coming from these two countries.
The toughest drought in the last 40 years in the African horn [countries] will unfortunately exacerbate the situation. The dependence on wheat imports into Africa is particularly concerning as it provides 14% of the calories consumed (Source: Business Africa).
This is forcing African leaders to take tough decisions on whether to subsidise the rising prices of wheat and other agriculture imports.
The food inflation is further stifling Africa’s post-Covid-19 economic recovery and experts are predicting that an inflation and food price spike will hit Africa later this year, as agricultural imports and supply chains in the region are blocked, and fertiliser and commodity prices soar. Rising fertiliser prices could reduce Africa’s productivity and yields for the foreseeable future.
African oil and gas-exporting nations such as Algeria, Nigeria and Angola will have their foreign earnings boosted, which should put them in a more favourable position to cater for the food price inflation.
The acceleration of the digitalisation of the food trade initiated by the Covid-19 pandemic and trade restrictions will be watched with attention as it provides efficiency gains and payment facilities that can counteract some price inflation.
Strong insight and business relations are essential
The UN report recommends that developing countries avoid export availing bans and other trade restriction while UN secretary general, António Guterres, stresses that the ban on food imports will contribute to market distortions and further increase global food prices.
Despite these challenging times and their consequence to livelihoods at a global scale, opportunities for Irish dairy, seafood, alcohol and livestock remain as market and demand are there.
Ireland’s strengthening ties with Africa were recently called out by Minister for Foreign Affairs and Minister for Defence, Simon Coveney, during his opening address at the seventh Africa Ireland Economic Forum held at the RDS Dublin on 7 June: “Ireland is deepening economic, political and cultural links with Africa because we understand that Africa’s potential is not a theoretical or future prospect. Africa is unleashing its potential now and we need to be there so that Irish business is not left behind. Through the Government’s Africa strategy, we are expanding our footprint in Africa, with new embassies in Morocco and Senegal.”
Bord Bia will be working closely with the Irish exporters by keeping them abreast of the latest market trends and by encouraging strong business relations, which is so important in this ever-evolving and complex global economic environment.
Irish export performance
Close to 80% of the value of Irish food and drinks exports to Africa is dairy. Irish dairy exports to Africa saw further growth of 10% in 2021 resulting in a total value of €694m.
Irish seafood exports to Africa amounted to €82m, a drop of 10% despite a 12% volume increase led by lower-valued blue whiting that totalled 58,441t.
Drink exports, including spirits, performed remarkably well reaching €53m, a 133% increase on the previous year. Meat exports dropped by 55% to €38m, predominately the results of the South Africa ban on imports of Irish poultry due to the presence of avian flu (HPAI).
There has been some encouraging growth in live cattle exports from Ireland to North Africa and the Middle East (MENA) during 2022, with just over 11,000 cattle exported to the region to date.
Growing demand for beef in the region and tighter supplies of cattle in mainland Europe available for export have created opportunities for Irish live cattle exporters.
In early May 2022, Bord Bia conducted a market study visit to Morocco to explore opportunities for live cattle exports to the region.
While small numbers of cattle have been exported from Ireland to Morocco in the past number of years, there are growing opportunities in the market for live cattle imports. The reopening of food service and a recovering tourist trade post-Covid-19 is driving higher beef consumption in the region, with demand for live cattle increasing as a result.
Morocco imported in the region of 40,000 cattle in 2021 and while these primarily originated from Spain, there is a growing appetite among Moroccan cattle importers to identify an alternative source of cattle.
While demand is primarily for cattle intended for beef production there are also more limited opportunities for dairy heifers to the market. Ireland has a very strong reputation for providing high-quality livestock that perform well once settled in the market and importers are keen to explore the opportunity to develop longer-term relationships with Irish exporters.
The trip to Morocco provided an opportunity for some very positive engagement with potential customers for Irish cattle and allowed key exporters to gain a better understanding of market requirements for cattle in Morocco.
Bord Bia will be working closely with Irish live exporters and potential customers in Morocco to capitalise on the connections made during the market study visit.
Nigeria is a priority market for Bord Bia with a focus on dairy, seafood and drinks. Nigeria is the most populous country in Africa with a population of over 200m people. The country has a young and vibrant population with over 50% of the population under 50 years old. This makes the market a potential growth market for brands as the young demography is highly aspirational.
Additionally, Nigeria is currently the seventh most populous nation in the world and is projected to be the third by 2050 overtaking the United States. Lagos, which is the commercial capital of the country, is currently the 10th largest mega city in the world.
The Nigerian drinks sector has experienced immense growth, although from a low base, with exports growing by 172% in the last two years.
Since 2020, assisted by Bord Bia’s African team, the number of Irish drinks brands has grown from one to six brands this year, with more predicted to come.
Irish whiskey fits into the consumer demand for premium whiskey products in Nigeria due to its strong provenance and production methods.
According to drinks market analysts IWSR (2021), volumes of Irish whiskey exports to Nigeria totalled 111,000 nine-litre cases in 2020, which increased from 46,500 nine-litre cases in 2019.
A quick-service restaurant (QSR) is one focused on providing customers with food as quickly and efficiently as possible. The QSR market in Europe and the US is saturated with well-known chains such as McDonald’s, Burger King and KFC. In recent years, Africa has shown growth potential within the QSR market due to its young demographics and increased processing capabilities, resulting in a formal QSR market valued at over €5bn.
Last year, Bord Bia commissioned research to understand the growing fast food opportunity in Egypt, Morocco, Kenya, Ghana, Kenya and Tanzania.
While QSR chains in Africa do source local supply where possible, there are opportunities for imported value-added meat and dairy products such as good-quality processed and cooked meats and cheese for pizza toppings.
The African market represents a sizeable opportunity for Irish dairy producers with the continent recording total dairy imports of around €4.4bn per annum (UN COMTRADE figure).
It is a competitive market with suppliers from New Zealand, the Netherlands and France all vying for market share.
In this competitive environment, there is a need to build trade and consumer awareness of Irish dairy.
Over the last few years, Bord Bia has run social media campaigns to coincide with World Milk Day on 1 June in Nigeria and South Africa.
In South Africa where butter is the key Irish dairy export, the campaign has run for the last two years in collaboration with Ornua under the banner of the #UltimateButterMaster challenge. The campaign is run on social media, using influencers, and consumers are encouraged to enter the competition by posting a video of their uniquely South African cooking or baking process using Kerrygold butter.
Weekly prizes are awarded for the best video and this year, for the first time, a junior butter master competition has been introduced aimed a junior cooks. The campaign kicked off on World Milk Day and runs for five weeks.
The 2022 campaign is expected to have reached over four million people. The campaign in 2021 resulted in increased sales and wider trade coverage for Irish butter in South Africa.