African Capital Markets News » Agriculture

Oppenheimer family and Temasek SWF launch African private equity fund

Tom Minney — Fri, 19 Aug 2011 10:49:57 +0000

Reuters reported recently that South Africa’s E. Oppenheimer family and Singapore’s sovereign fund Temasek Holdings have set up a $300 million private equity fund called Tana Africa Capital to invest primarily in consumer goods and agricultural sectors across Africa. The fund will target Africa’s growing young population and also focus on agricultural production and processing of farm produce and, to a lesser extent media, education and healthcare. The prime target will be the bigger economies, but it will not avoid smaller economies.

James Teeger, group managing director at E Oppenheimer & Son, told Reuters: “The initial capital commitment is $300 million, so 150 from each partner. We felt that was an appropriate amount to help the team make 5 to 6 investments over the next few years.” He would not say when Tana Africa hoped to close its first investment but he said the fund has a strong deal pipeline.

Reuters reports that Africa is increasingly attracting interest in investment, focusing on its abundant resources, fast-growing population and rising personal incomes. Reuters said Siemens AG said last year it aimed to invest $254 m in Africa by 2012. Global private equity group Carlyle, based in Washington D.C., said in March it was entering sub-Saharan Africa, targeting investments in consumer goods, financial services, agriculture and infrastructure.

London Stock Exchange scores on African listings

Tom Minney — Tue, 31 May 2011 01:48:55 +0000

The London Stock Exchange (www.londonstockexchange.com) has long been a global centre for capital, particularly where African investments are concerned. It is also the world centre for Eurobonds and several leading African equities are traded in London. There are several reasons to come to London, either through listing or cross-listing, including being closer to investors and sources of capital such as funds and investment trusts and also because investors may find it more attractive to invest in companies that are listed on a well-known and recognized stock exchange. A few international exchanges, including London, Toronto and Australia, are also known as centres for world mining equities and attract specialized listings..
The LSE’s Main Market lists 18 equities for trading that focus on Sub-Saharan Africa. These are mostly South African firms covering food, industrials and mining and the history began with AECI in 1937 and Tongaat-Hulett in 1939. The main board also includes Zimbabwe’s hotel group Meikles, Hwange Colliery and financial services firm NMBZ; Kenya’s Kakuzi food products and Zambian miner ZCCM. All listings after NMBZ (1997) were incorporated outside Africa, including Channel Islands Jersey and Guernsey, Bermuda and UK. The list doesn’t include the “London Five” – Anglo American, BHP Billiton, SAB Miller, Old Mutual and Investec –of giant firms who caused controversy when they moved from South Africa. Africa is now a small part of their operations.
AIM, the LSE’s international market for smaller, growing companies, was created in 1995 for businesses seeking growth capital, including early-stage and venture-capital, as well as more established companies. Sub-Saharan Africa scores only 55 among the 3,000 worldwide companies. The list is dominated by mining companies, many incorporated in UK, offering investors exposure to gold, diamonds, gemstones, uranium, platinum, coal, iron and other metals and minerals spread across Africa from South Africa to Liberia and Sierra Leone. Also on offer are financial services, farming and fishing, water, computer services, real estate, industrial machinery and alternative fuels. Most of the countries of operation are English-speaking, but others include Mozambique and Somalia.

Vital impact PE fund raises $250 m and invests in Angolan housing

Tom Minney — Wed, 04 May 2011 20:23:31 +0000

A private equity fund that invests in housing, agriculture, education and health says it has raised more than $250 million for its first fund, Vital Capital Fund I. Eytan Stibbe, founding managing partner at Vital Capital Investments LP (www.vital-capital.com) and chief investment officer was reported as telling Bloomberg yesterday (3 May) the fund aimed to invest in Angola, Ghana and Mozambique.
The fund includes retired U.S. Army General Wesley Clark among its advisory board members, is a proponent of “impact investing,” a strategy that places capital in ventures with social or environmental goals.
Stibbe says Vital Capital has already invested in Kora Housing, a developer of affordable housing in Angola. It aims to raise another $250 million.

Emerging Capital Partners (ECP) awarded “Best Private Equity House in Africa”

Tom Minney — Wed, 09 Mar 2011 08:09:35 +0000

Emerging Capital Partners (www.ecpinvestments.com) has won an award as “Best Private Equity House in Africa” named by EMEA Finance magazine (www.emeafinance.com). This recognizes ECP’s achievements in raising over $613 million for its third pan-African fund, ECP Africa III (AF III), making it the largest fund ever raised for growth equity investing across Africa. It brings ECP’s total assets under management to $1.8 billion.
ECP is praised for committing over $1 billion to diverse investments across all of Africa and impacting growth and development in over 40 countries. It is the second consecutive year ECP won the award.
Hurley Doddy, a founding partner and Co-CEO of ECP said in a press release: “We are extremely proud to receive the award for “Best Private Equity House in Africa” for a second consecutive year. Africa’s profile as a compelling investment story has accelerated in pace over the last two years, so we feel ever more privileged to be held up as the leading firm among our many excellent peers.
“The fact that we were able to raise over $613 million during a time of great financial uncertainty proves that we are certainly not alone in believing in Africa’s potential. Our dedicated focus and extensive presence on the ground adds operational value unrivalled by our peers. We look forward to continuing our success across Africa throughout 2011 and beyond.”
Doddy told Reuters agency in an interview on 7 March that Africa offers plenty of scope for private equity investments, with at least another decade of strong growth expected from consumer goods, broadband internet and financial services. After years of explosive growth in cell phones and banking, he foresees the new growth sectors will also include TV over Internet, insurance and real estate.
Recently, ECP has deployed over $180 million from AF III in 4 investments which provide new services and increase opportunity in 17 countries: Financial Bank, a Togo-based commercial bank with operations in Benin, Cameroon, Gabon, Chad, Mauritania and Guinea; Wananchi Group, a high-speed Internet provider serving Kenya and Tanzania; Groupe NSIA, a West African company providing insurance to Benin, Togo, Senegal, Guinea Bissau, Ghana, Mali, Guinea, Cameroon, Congo and Gabon; and Thunnus Overseas Group, a leading canned tuna provider supplying France with over 25% of its canned tuna products from bases in Madagascar and Cote d’Ivoire.
The group has already made more than 50 investments and 20 successful exits in Africa. Past investments include Nigerian wireless network operator Starcomms and pan-African mobile operator Celtel International, sold to Kuwait’s MTC for $3.4 billion in 2005 before MTNCI was rebranded Zain last year and its African assets were bought by Bharti Airtel. Doddy told Reuters: “Those companies are now quite big. The rates of growth are declining so we’ve been getting out of our last investments in that segment of the telecom business, looking maybe to get in some other segments,” he said.
One such example is Kenya’s Wananchi, a triple-play telecoms firm which bundles broadband internet, cable television and voice telephony into one package and is rolling out its services to 9 east African countries. “A country like Kenya may be over 50% in terms of cell phone penetration but Pay TV, broadband are still at the 1% and 2% type range, so once again we probably have another decade of growth in that type of business,” Doddy said.
He saw further growth in Nigeria’s banking sector, a favourite of frontier market investors, and predicted financial services including insurance would also generate high returns. Changes in land ownership laws would also allow lucrative real estate investments and growth in mortgage lending. Soaring food prices in recent quarters meant investors were increasingly interested in Africa’s agricultural potential, with swathes of arable land that could be put to more productive use. “We’ve seen a real uptake in people looking at agro-businesses here.”
Popular uprisings in North Africa might slow investment in the short term but could unlock the region’s economic potential in future. “Those places had been held back by governance that needed to be changed…I think it is reasonable to expect higher growth rates in North Africa if you look over the next decade.”
He said there was increased interest from Chinese and Indian investors but viewed these as potential co-investors or exit opportunities rather than direct competition.
“If you have a good cash-generative business here in Africa, almost anywhere in almost in any sector, somebody is probably interested in buying,” Doddy said.
The EMEA Finance award is to be presented at annual Achievement Awards charity dinner in London in June.

JSE reports 12% jump in commodity derivatives trades in 2010

Tom Minney — Tue, 18 Jan 2011 10:57:41 +0000

South Africa’s JSE Ltd (www.jse.co.za) traded 2.1 million commodity derivative contracts in 2010, up 12% on the previous year but still below the record 2.5 mn contracts traded in 2008. The JSE’s Commodity Derivatives market offers grain trading in white and yellow maize, soya, sorghum, wheat and sunflower seed. It also trades metals including gold, platinum, silver and copper and a crude-oil based derivative called the Western Texas Intermediate (WTI), reportedly the world’s most traded commodity.
White maize accounted for 46% of all grains traded on the JSE, wheat accounted for 27% and yellow maize 16%.
The JSE’s head of commodity derivatives, Rod Gravelet-Blondin, said in a press release today (18 Jan) that the local commodity derivatives market continues to attract new participants who aim to eliminate price risks in an increasingly volatile trading environment: “There is far greater understanding among farmers and millers of the uses of agricultural commodity derivatives as a tool to reduce price risk. Because we are a physical delivery market, farmers can lock in prices at the start of a growing season by taking out agricultural commodity derivatives, so that no matter what happens in the course of the year, they will be able to get their Safex price provided they deliver grain to the quantity and quality specified.”
In 2011, the JSE’s Commodity Derivatives market plans to consolidate and build. Gravelet-Blondin says: “That means encouraging new market participants, and continuing to educate people in the benefits and advantages of commodity derivatives.”

Farm productivity soaring in southern Africa

Production is soaring in South Africa and in neighbouring Zambia. South Africa’s maize crop was over 12 million tons in 2010, near a record and helped by relatively strong prices at the start of the growing season, above-average rainfall and better farming practices. Prices are down by about 30% from a year ago, with white maize for delivery in July 2011 now trading at about R1,400 a ton, unusually R80 less than yellow maize, traditionally lower priced and used for animal feed.
Gravelet-Blondin says this is due to: “..a large carry-over of white maize from the previous season, and export demand for South African maize is less buoyant due to improved yields coming out of countries like Zambia. Another factor contributing to the increase in size of the maize crop is the fact that we are now seeing yields of close to five tons per hectare, which is virtually double what we were seeing 10 or 15 years ago. This is due in part to biotechnology, but also to improved farming practices. South African commercial farmers are far more business-minded and professional than was the case 20 or 30 years ago.”

How commodity exchanges reduce risk

Safex was launched in 1995 to provide agricultural commodity derivatives trading as a mechanism to address price risk for producers and users. It started out offering grain futures contracts, but has since expanded its range of traded instruments. It is part of the evolution of risk control. Initially the government used to manage price risks for farmers and millers through price controls. When the market deregulated in the 1990s the price risk moved to farmers and users.
Grains trade on the basis of physical delivery meaning that any contract traded can result in physical delivery to a grain silo in South Africa. However, recently the JSE introduced cash-traded corn contracts, for which physical delivery is not required, which are based on prices set by the Chicago Board of Trade, part of the largest commodities trading market in the world. US corn contracts currently trade at a R450 premium to South African white maize, according to the JSE. These contracts are pure financial instruments which makes them appealing to a broader range of market participants.
Chris Sturgess, general manager at the JSE’s Commodity Derivatives market, says: “The price of South African maize is often correlated to the international prices set in Chicago. But South Africa maize prices fluctuate between import and export parity depending on whether there is a surplus or shortfall of maize. Many traders keep an eye on the spread between US corn prices and South African white maize and look for opportunities to profit from a widening or narrowing of this spread.”
The WTI oil contract can also help companies reduce their fossil fuel costs by buying WTI futures when prices are low. Should oil prices rise, companies will be able to offset higher fuel prices paid at the pump with profits made on the oil futures. WTI contracts on the JSE are traded in rand rather than US dollars, providing greater price transparency for local companies. Sturgess says: “This is something we are encouraging local companies with high fuel bills to explore… Companies can also reduce currency exposure through the JSE’s range of currency derivatives.”
Gravelet-Blondin says there is a greater level of sophistication among commodity derivatives traders seeking opportunities for hedging or profit. For example, it is possible to trade the difference between gold and platinum prices, on the basis that the two prices are correlated and any divergence in the spread provides an opportunity for profit.

Zimbabwe launches COMEZ Commodities Exchange

Tom Minney — Tue, 18 Jan 2011 09:46:40 +0000

The new Commodities Exchange of Zimbabwe (COMEZ) is open, but no date is yet set for the start of trading. At the launch on 14 January, Industry and Commerce Minister Welshman Ncube said the exchange would be managed by the State, banks and farmers’ unions, according to a report in Bloomberg’s Business Week.
Zimbabwe previously had a thriving Commodity Exchange, which was closed in 2001 when the Government gave the monopoly on corn and wheat trading to the Grain Marketing Board. COMEZ will end the GMB monopoly, although the State will continue to play a strong role.
Bloomberg quotes Ncube saying: “We should create a transparent, open and accessible commodities market where both buyers and sellers can participate knowing the prevailing prices.”
To start with the new commodities exchange will trade only grains, cereals and oil seeds. The chairman of Comez, Wilson Nyabonda (the previous president of the Zimbabwe Commercial Farmers Union) said that private investors would be able to acquire shares in COMEZ.
Zimbabwe needs 2.09 million metric tons of corn (maize) the staple food according to the UN World Food Programme and the Food and Agriculture Organization, but the last harvest was 1.35 mn mt and 1.68 mn Zimbabweans depend on food aid. The winter wheat requirement is stated at 410,000-450,000 according to some sources, and the harvest was reported at 10,000 mt.
According to a recent report in the businessdigest of the Zimbabwe Independent, agriculture in Zimbabwe is recovering well, particularly tobacco, partly aided by subsidized fertilizer. However, there is a huge need for financing to rehabilitate irrigation schemes and improving farms, as well as supporting the recently settled “A2 farmers”.
There is a trend to set up commodity exchanges, with strong backing from donors. The leader in Africa is SAFEX, the commodities and futures arm of South Africa’s JSE Ltd (www.safex.co.za). Next is the new and fast-growing Ethiopia Commodity Exchange (www.ecx.com.et, trading started in April 2008). There is an Agricultural Commodity Exchange for Africa (www.Aceafrica.org, based in Malawi but serving smaller farmers in 5 countries) and Nigeria has Abuja Securities and Commodities Exchange. ZamACE in Zambia is active (www.zamace.com), followed by Uganda Commodity Exchange (www.uce.co.ug). Malawi and Kenya ACEs (www.kacekenya.co.ke) for the domestic market appear to have run out of donor funding, according to web reports and the Kenyan Government and the East Africa Grain Council are considering a replacement in Kenya. Projects and studies are underway in Ghana and Tanzania and Sudan is watching developments with interest.
Commodity exchanges are part of a move to try to revitalize agricultural productivity in Africa and should be seen as part of a holistic solution, including agricultural extension, support infrastructure for small farmers including quality warehousing, and finance as well as market price information.

Crocodile company swims onto Zimbabwe Stock Exchange

Tom Minney — Tue, 07 Dec 2010 09:24:22 +0000

The Zimbabwe Stock Exchange (www.zse.co.zw) snapped up its first new listing since 2007 on 29 November when Padenga Holdings Limited was admitted as the 77th listing. This year there have been 2 listings described as “reverse takeover listings”, TN Financial Holdings Ltd acquired Tedco Limited (January) in order to get listed on the ZSE and Interfin Holdings took over CFX Financial Services (May) and with it CFX Bank.
First day trading in Padenga was reported at 2.7 million shares, of which 1.8 million were book-overs by Imara Asset Management. The highest offer was US$7 cents, but trade opened at US$5c.
Padenga was created in September when diversified manufacturing conglomerate Innscor divested of its crocodile skins division Niloticus operated as a wholly-owned of Innscor, a, which has diluted its shareholding in the company from 100%. Innscor transferred assets and liabilities of its former subsidiary to the new public company in exchange for 541,593,440 of Padenga’s issued ordinary shares. These are to be distributed to Innscor shareholders by way of a dividend in specie, which technically means acquisition by way of share swap in lieu of cash distribution.
It has 3 farms in Kariba and supplies about 33% of the world’s demand for large, high-quality crocodile skins. It earns 92% of its revenue from tannery exports to Asia and Europe and 8% from meat shipments to Asia. Its main clients include leading global brands such as Gucci. Padenga in its prelisting statement (Padenga prelisting statement online, click here) reported that gross turnover up at $11.8 million for the year to 30 June (up from $10.2 million in 2009) and operating profit before depreciation and amortization of $1.3million (up from $69,879). The company is well covered by the excellent www.africanfinancials.com and www.africanir.com.
Padenga CEO Gary Sharp was reported in local media: “I am extremely optimistic about the opportunities that the listing brings us in terms of our intentions to grow the business and pursue related ventures using the experience, skills and IP (intellectual property) we have developed locally.
“We are now producing a size and quality of skin that commands premium prices and this largely separates us from the level of the market that is impacted by global market trends and fluctuating skin prices. We are predicting sustained revenue and profit growth over the foreseeable future and have every confidence in achieving these results.”
The global financial crisis had a negative impact on the international exotic skins market as both demand and prices declined. Subsequently, the company had to de-stock, which resulted in the business incurring a fair value loss during the financial year.
Another rumoured listing could be LonZim Plc, a 24.61% associate company of AIM-listed Lonrho, which announced on 29 November that it has raised £4,987,904 (before expenses), by issuing 17,813,944 new ordinary shares of £0.0001 each at 28p per LonZim share. This was principally conducted amongst new and existing institutional shareholders in LonZim. Lonrho participated to maintain its percentage shareholding of 24.61% by subscribing for 4,384,011 new LonZim Shares at a cost of £1,227,523. It is reported to be aiming to raise a further US$5 million for capital expenditure through a rights issue, with all funds to go to expanding existing operations.
On 2 November it was reported that Whetstone Minerals, listed on Canada’s Toronto Stock Exchange and concentrating on gold mining in Zimbabwe, was seeking a secondary listing for its shares on the ZSE, and this is reported still to be coming this year.
ZSE CEO Emmanuel Munyukwi was reported as saying also that Kingdom Financial Holdings would be one of 3 new listings (including Padenga) before the end of the year. He said several foreign companies had inquired about listing on the bourse.

UK-Mozambique Investment Forum 2010

Tom Minney — Tue, 16 Nov 2010 23:14:28 +0000

A UK-Mozambique Investment Forum 2010, is coming to London on 2 December. It is organized by the Government of Mozambique, with Africa Matters Limited and Developing Markets Associates. The Government of Mozambique is sending a high-level delegation, led by Hon Oldemiro Marques Baloi, (Minister of Foreign Affairs and Cooperation), accompanied by Hon José Pacheco (Minister of Agriculture) and Hon Paulo Zuchula (Minister of Transport and Communications). Other ministries to be represented include finance, tourism, mineral resources and the Central Bank of Mozambique and other high-ranking officials and business leaders.
Mozambique has had consistently high economic growth recently. Topics include the economic outlook and investment opportunity, including inputs from the Investment Promotion Centre. Tourism, agriculture, mining and infrastructure development are all key sectors for investment and each has its own session, featuring top private sector investors and leading Government officers and ministers.
According to the promoters: “The day’s programme is designed to paint a contemporary picture of the investment climate in Mozambique and the country’s on-going efforts to attract foreign direct investment. This will be followed by further bilateral meetings, as may be required, on specific investment opportunities. The audience at the Forum will include many of the most senior institutional investors in Europe and will be one of the most significant promotions to date of Mozambique’s efforts to attract investment on the international stage.”
Top UK speakers and participants include Stephen O’Brien, Under-Secretary of State for International Development, Lord Mark Malloch Brown (Royal African Society), Lord Richard Newby (Lib-Dem Treasury spokesperson) as well as Baroness Lynda Chalker, Chairman, Africa Matters Limited. Co-organizer is the High Commission of Mozambique.
For more information and invitations contact Robyn Kingston at Developing Markets Associates on tel: +44 (0)203 117 2500 or email robyn.kingston[at]developingmarkets[dot]com.

IFC to offer $20 million guarantee facility for Ethiopian coffee producers

Tom Minney — Sat, 11 Sep 2010 20:24:55 +0000

The International Finance Corporation (www.ifc.org) is investing $21 million to guarantee coffee crops. The facility would be to support the Ethiopian Coffee Initiative run by Technoserve (www.technoserve.org), part of a Coffee Initiative across 4 African countries.
According to a report on www.afrik-news.com, one tranche of $10 million is to be set up with local NIB International Bank. The IFC, which approved the project in July, says in a press release that Technoserve will work with coffee farmer cooperatives to improve their business management skills; train them to improve quality of the coffee; facilitate access to credit by developing a business plan for each washing station (“wet mill”) for processing cherry coffee and present it to the partner banks; facilitate their access to markets by linking them to key buyers; provide working capital; and provide farmers with agronomy and extension services to improve their yields.
The revolving IFC guarantee facility will be for up to $10 million, and is accessible to national banks to participate.
The total size of the financing programme over the 3-year period is expected to be US$21 million. Up to 20% of the program will be for equipment loans of a 3-year maturity while the remaining 80% will be harvest working capital loans of up to one year.
The targeted region is situated in semi-forest areas in South-western Ethiopia. Most specialty coffee production in Ethiopia only uses organic fertilization and, as such, does not rely on inorganic fertilizers and/or pesticides.
In terms of process, the selective picking (only the ripe coffee cherries are harvested) is done by hand, a labor-intensive process. This kind of harvest is used primarily to harvest the finer Arabica beans. Cherry is then transported from the fields to the collection points and subsequently to the wet mills. Under this project, the processing promoted used a newer procedure called “machine-assisted wet processing” or “mechanical demucilaging”, with the wet mills able to process 1.0 or 2.4 tons/hour. After overnight fermentation, the resulting coffee beans (“parchment”) are dried in the sun on large raised drying tables for a period of 7-10 days in order to achieve the desired moisture content of 11%.
Afrik-news.com reports that Technoserve is working with Ethiopian farmer cooperatives to train them and improve their business skills and the quality of their coffee production. The project targets up to 160 farmers cooperatives which represent some 90,000 local farmers.
Technoserve, which has more than 40 years’ experience in providing business solutions to development problems, including through agricultural production, says its Coffee Initiative is funded by the Bill and Melinda Gates Foundation and it has also been supported by leading Wall Street philanthropists.
The IFC says it is stepping up its projects in Ethiopia. It has a programme with the Ethiopian Commodity Exchange (ECX) to design financial instruments and advocate for any regulatory changes needed so that banks can accept warehouse receipts as collateral for loans.
It opened a new representative office in Ethiopia in November 2008, and recent projects include a $11 million investment to support gold exploration at the Tulu Kapi Gold Project in Western Ethiopia, and a $55 million investment in Derba Midroc Cement Company to help address the country’s cement shortage.
IFC says its strategy in Ethiopia focuses on proactively developing new investment projects, supporting public-private partnerships that promote economic growth, and mobilizing direct investments to key sectors of the economy, including agribusiness, financial services, health and education, infrastructure, manufacturing, and tourism.
When IFC Vice President for Business Advisory Services Rachel Kyte visited in July she said: “Ethiopia is a country of high potential, including in agriculture, manufacturing, renewable energy and services. IFC is committed to assist Ethiopia’s government in creating an enabling environment for business and to support private sector investment in key sectors of the country.” (from press release).
IFC is also conducting several advisory services programs provide support to improve the investment climate, and promote better access to finance through measures such as the warehouse receipt finance program, to name a few.

From the web: www.technoserve.org
TechnoServe was founded in 1968 by Connecticut businessman Ed Bullard. While volunteering at a hospital in rural Ghana, he was struck by how difficult it was for hardworking people in the area to lift themselves out of poverty. So he created an organization to transform lives by providing poor people access to productivity-enhancing tools— hence the name TechnoServe: Technology in the Service of Mankind.
Bullard’s work was guided by two core principles, revolutionary at the time: the power of private enterprise to transform people’s lives, and the lasting value of providing a hand up rather than a handout. These principles have remained at the heart of TechnoServe’s efforts, even as our work has evolved to focus on improving living standards on a larger scale, to transform entire communities and countries.
Today, TechnoServe focuses on developing entrepreneurs, building businesses and industries, and improving the business environment. All our work revolves around helping people identify and capitalize on good business opportunities that help to transform the lives of the rural poor, by generating jobs and markets for their products and services.
We work with a range of public- and private-sector partners, such as the U.S. Agency for International Development, the Rockefeller and W.K. Kellogg Foundations, Bill & Melinda Gates Foundation, Google.org, Lenovo, Cargill and numerous individuals.
In keeping with our private-enterprise approach, we track and evaluate our impact using business metrics, including wages paid and supplies bought from the rural poor. We also track and evaluate the social impact of our work.
The results are evident in villages and towns throughout Africa and Latin America, where thanks to TechnoServe, businesses are thriving, economic activity is robust, and hardworking families have jobs and steady incomes. These changes have sustained improvements in infrastructure, health, education and other vital community social services.

Standard Bank to lend $100 mln to farmers in 4 African countries

Tom Minney — Sun, 29 Aug 2010 17:00:15 +0000

South Africa’s Standard Bank (www.standardbank.com) will provide $100 million as credit to up to 750,000 farmers in 4 African countries in the next 3 years, according to an interview given by Clive Tasker, CEO for Africa, to Reuters newsagency. The bank is to offer the credit in Uganda, Ghana, Mozambique and Tanzania to help boost agricultural production and economic growth. It is a pilot scheme agreed with some institutions and aims to boost export crops.
Reuters quotes Tasker as saying: “This scheme will disburse loans to small-holders of up to $100 million over the next 3 years and will potentially benefit up to 750,000 small-scale farmers.” He said the bank was also planning a broader financing scheme for other farmers in Africa and would consider projects that aimed at raising production of cash crops: “We are committed to financing agriculture across the full scope of the industry.”
Priority will go to growing crops such as cocoa in Ghana and cashew nuts in Mozambique. “We will help farmers with the right seeds, fertilisers, and ask them to have crop insurance to mitigate our risks,” Tasker said. He added the bank would finance farmers’ co-operatives and agro-businesses to boost trade. Increased production of crops would help African economies to grow and lift millions of people out of poverty.
Reuters reports that Africa has vast water resources and arable land but also food shortages, and says analysts partly blame this on mismanagement of funds, poor government policies and lack of support infrastructure for farmers.
Standard Bank said there was increasing global demand for African produced cocoa, coffee, tea and horticultural crops. Reuters says there is also increased investment, including equity funds seeking land deals and South African and other farmers who are investing in other African countries to grow cash crops.