Archive for the 'Agriculture' Category
November 17th, 2010 by Tom Minney
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.
September 11th, 2010 by Tom Minney
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.
August 29th, 2010 by Tom Minney
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.
August 2nd, 2010 by Tom Minney
Australia’s Minemakers Limited on 27 July became the 63rd company to list on the Namibian Stock Exchange (www.nsx.com.na) when it joined the Development Capital Board (DevX).
Minemakers has interests in phosphate mining – for which it says Namibia has the world’s sixth biggest resource. Fertilizers could see high demand as “soft commodities” including food and agriculture, may grow in value. The company is also developing Wonarah rock phosphate project in Australia.
It is an exploration and mining development company and is already listed on the Australian Securities Exchange (www.asx.com.au) and has a market capitalisation of A$54 million (US$49.3 million). According to a report in The Namibian newspaper (www.namibian.com.na), Managing Director Andrew Drummond said at the listing that it intends to list soon on the Toronto Stock Exchange (www.tmx.com).
The exclusive prospecting licences, including the Sandpiper/Meob marine phosphate some 60km offshore Namibia, are held in a joint venture company, Minemakers Tungeni Joint Venture Exploration Pty (Ltd). Minemakers, via 100%-owned Bonaparte Diamond Mines, holds 42.5% of the joint venture, fellow Australians Union Resources Limited also has 42.5% and local black-empowerment partner Tungeni Investments cc has 15%.
The secondary listing pushed up the overall market capitalisation of the NSX by about N$356 million to nearly N$1.1 trillion (US$148 billion). The DevX now stands at N$18.3 billion (US$2.5billion).
Drummond said preliminary indications are that Namibia has about 1.6 billion tonnes of phosphate, making it the sixth biggest resource in the world. According to the newspaper, Minemakers 2009 annual report says mining could start next year, “subject to a favourable result from the scoping study, and gaining the necessary development funding and government approvals”.
In its regulatory listing advertisements in the local media, Minemakers said it regarded the development of the Sandpiper/Meob project as “one of its top priorities and the natural expansion strategy for establishing two geographic distribution centres – one in Australia and the other in Namibia – to supply growing global demand for phosphate and related fertilizer products”.
Minemakers said the Sandpiper/Meob project is well-placed to develop into a new “phosphate-producing province” in Namibia. The company has another phosphate project at Rocky Point, north of Walvis Bay.
March 15th, 2010 by Tom Minney
LIVE FROM SECURITIES AFRICA/CITIBANK 5TH ANNUAL AFRICAN INVESTMENT CONFERENCE, LONDON
Experts launching the 5th Annual Africa Investment Conference, organized by Securities Africa and Citigroup, said they could see more growth coming in the 2nd biggest continent.
David Cowan, Africa Economist with Citigroup Global Markets, says that African countries had survived the global downturn, firstly because their financial systems were not so leveraged. However, impacts through the real sector are starting to show, where private sector credit growth has slowed dramatically in the second half of 2009 and banks are using surplus funds to buy government securities, collapsing yields.
He notes that the agricultural and informal sectors have held up well and “still account for a large, and growing, percentage of GDP”. Commodity prices are rebounding, either short term or part of a long-term “super cycle”, and the decision is not yet in, whether this brings more blessings or curses, especially as many countries are oil importers.
The slowdown in remittances and aid has not been as bad as expected, with multilaterals such as African Development Bank, World Bank and International Monetary Fund, stepping up funding. African countries are largely in strong fiscal positions, and this has not changed much despite efforts to help their economies through the crisis. Although many central banks eased rates, in many cases the commercial banks did not follow! Some countries missed the chance to introduce structural reforms. Inflation is likely to be low in the first half of 2010, but could pick up depending on food prices.
He says “growth should continue to pick up” for 2010-11, and this could be fast in some countries although constraints such as power shortages will continue to hold it back. There could be more spending, especially as many countries face elections in coming months, and political uncertainty could restrain some foreign investment, particularly portfolio inflows. Africa is not likely to be competitive in manufacturing, but could have advantages in food as the Northern hemisphere switches to healthier eating more fruit and vegetables, and Africa could also add value and benefits to food products.
Commodity prices are likely to be drivers of growth and Africa could benefit from a period of high and stable commodity prices, depending on governments making necessary structural changes to get the best benefits. There is also a rebalancing from external to internal growth drivers.
Securities Africa’s Dexter Mahachi sees better government, increased accountability and more democracy as a major driver of African growth. “They are managing their finances better” he says, adding this provides a good platform for sustained and better economic growth rates. “Consumer stocks across Africa have attracted investor interest, consumer stocks in Ghana, Kenya, Nigeria. There has been quite a boom in growth and urbanization in all these countries.
“For 2010-2011 we expect the bullish outlook to continue improving. The fundamental picture is not economic growth from more resources, but also economic growth from better policies”.
January 19th, 2010 by Tom Minney
Agricultural private equity fund Agri-Vie (www.agrivie.com) will reach its target of raising $100 million for investment in agricultural projects by February or March, according to an interview with Reuters newsagency on 14 January. It says there is plenty of potential and plans a second fund of up to $300 million.
Earlier in January the fund, launched in March 2008, made 2 investments totalling $10 mln in 2 agricultural projects in Ethiopia and across the region, and it is close to finalizing a $4 mln investment in Tanzania.
Izak Strauss, executive director and chief investment officer, told Reuters they are also considering a second fund: “There is definitely an opportunity to do a second fund substantially larger than the first fund… probably (in the region of) $200 to $300 million.” This could launch in 2013 or 2014.
Agri-Vie, based in Cape Town, focuses on equity investments in a wide range of agribusiness in Sub-Saharan Africa, including processing and distribution. It is backed by the Development Bank of Southern Africa (www.dbsa.org) and private entities including W.K. Kellogg Foundation (www.wkkf.org).
Agriculture in Africa appears set for transformation from unproductive and undeveloped subsistence farming to more commercial farming as investors from Europe, Asia and the Middle East get large tracts of land and launch projects, often to tackle food insecurity in their own countries.
In the interview, Mr Strauss said Agri-Vie plans to invest up to $25 million into five new projects during 2010, including a new $4 million eco-tourism project in Tanzania.
Agri-Vie forecasts fast economic growth in East Africa, which it calls an “investment hotspot”.
He said Agri-Vie this month invested $6.7 million in New Forests Company (www.newforestscompany.com), a UK-based sustainable and socially responsible forestry company with established, rapidly growing plantations and prospects of diversified products for local and regional export markets. It has operations in Uganda as well as Tanzania, Rwanda and Mozambique. East Africa has been a net importer of sawn timber and electrical poles and NFC aims to replace these imports with locally-produced goods. NFC’s overall aim is to “deliver both attractive returns to investors and significant social and environmental benefits”, according to its website.
The company also invested $3.5 million in africaJUICE (www.africajuice.com), run by European and African entrepreneurs and establishing fruit production and processing operations to capture share in European and the Middle Eastern juice markets. The first farm is in Upper Awash in the Oromia region. africaJUICE claims the combination of ideal growing conditions in the area and Ethiopia’s closeness to target markets should help displace European companies’ reliance on importing fruit products from South America.
The company website says: “We plan to establish at least three production locations across Africa by 2014 and become a premier supplier of Fair Trade juice to the European market.”
Strauss said: “Its first operation is in Ethiopia, growing yellow passion fruit, mango and papaya… The first exports will happen from mid-this year.” africaJUICE is making a capital investment of some €12 million to rehabilitate and expand an existing state-owned fruit farm (“Tibila Farm”) to create a high-technology modern tropical fruit plantation and build a new processing facility, operating under Fair Trade principles.
According to africaJUICE’s website: “Our plan is to plant approximately 600 hectares of yellow passion fruit and 600 hectares of other tropical fruits such as mango and papaya over a period of four years. At the same time we will support the development of over 1,200 hectares of outgrowers (contract farmers) to supplement the supply and extend community participation. Our new fruit processing facility will produce pure juices, concentrates and purees which will be transported to market via established export routes.”
David O’Halloran, Director of africaJUICE, told African Capital Markets News: “Having started operations on the ground early in 2009, we are pleased with the progress so far on the new fruit plantings, infrastructure, operating approach and the processing plant and looking forward to juice production from mid-2010 onwards. We have also made substantial progress following our sustainable development philosophy with a number of initiatives underway or already executed and are excited that this new approach to development and investment is progressing well. We are also progressing well on the second and third projects and expect to be considering funding options for those in the coming 12-24 months”.