Rising prices are luring more private investors to Africa's food sector, where they are convinced for the first time in decades they can make a profit, The Wall Street Journal reported Monday.
Commercial banks, charities and governments have set up funds worth hundreds of millions of U.S. dollars over the past few years to invest in private farm and food projects in Africa, while several major companies have expanded operations there, said the report.
Private investors say a number of factors make the African food sector look like a business opportunity. These include the existence of vast lots of empty arable land, rising global food prices and, since 2001, zero tariffs for exports from poor countries to the lucrative European Union market.
Rising fuel costs are also driving up the cost of imported foods, making local production more competitive in Africa.
That is welcome news at a time when the United Nations is struggling to persuade governments to come up with 30 billion dollars to fight world food poverty, mainly in Africa.
But the trouble private investors are having in placing their money suggests a wider problem, said the U.S. business daily, noting that African countries consistently rank toward the bottom of World Bank surveys on enforcing contracts, granting licenses, corruption and other measures.