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Africa must start by treating agriculture as a business

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No region of the world has ever moved to industrialised economy status without a transformation of the agricultural sector. Agriculture, which contributes 16.2% of the GDP of Africa, and gives some form of employment to over 60% of the population, holds the key to accelerated growth, diversification and job creation for African economies.
But the performance of the sector has historically been low. Cereal yields are significantly below the global average. Modern farm inputs, including improved seeds, mechanisation, and irrigation, are severely limited.
In the past, agriculture was seen as the domain of the humanitarian development sector, as a way to manage poverty. It was not seen as a business sector for wealth creation. Yet Africa has huge potential in agriculture – and with it huge investment potential. Some 65% of all the uncultivated arable land left in the world lies in Africa. When Africa manages to feed itself, as – within a generation – it will, it will also be able to feed the nine billion people who will inhabit the planet in 2050.

However, Africa is wasting vast amounts of money and resources by underrating its agriculture sector. For example, it spends $35 billion in foreign currency annually importing food, a figure that is set to rise to over $100 billion per year by 2030. In so doing, Africa is choking its own economic future. It is importing the food that it should be growing itself. It is exporting, often to developed countries, the jobs it needs to keep and nurture. It also has to pay inflated prices resulting from global commodity supply fluctuations.

The food and agribusiness sector is projected to grow from $330 billion today to $1 trillion by 2030, and remember that there will also be two billion people looking for food and clothing. African enterprises and investors need to convert this opportunity and unlock this potential for Africa and Africans.

Agriculture as business

Africa must start by treating agriculture as a business. It must learn fast from experiences elsewhere, for example in south-east Asia, where agriculture has been the foundation for fast-paced economic growth, built on a strong food processing and agro-industrial manufacturing base.

This is the transformation formula: agriculture allied with industry, manufacturing and processing capability equals strong and sustainable economic development, which creates wealth throughout the economy. Africa must not miss opportunities for such linkages whenever and wherever they occur. We must reduce food system losses all along the food chain, from the farm, storage, transport, processing and retail marketing.

To drive agro-industrialisation, we must be able to finance the sector. Doing so will help unlock the potential of agriculture as a business on the continent. Under its Feed Africa strategy, the African Development Bank will invest $24 billion in agriculture and agribusiness over the next ten years. This is a 400% increase in financing, from the current levels of $600 million per year.

A key component will be providing $700 million to a flagship programme known as “Technologies for African Agricultural Transformation” for the scaling up of agricultural technologies to reach millions of farmers in Africa in the next ten years.

Finance and farming have not always been easy partners in Africa. Another pillar of the Bank’s strategy is to accelerate commercial financing for agriculture. Despite its importance, the agriculture sector receives less than 3% of the overall industry financing provided by the banking sector. Risk sharing instruments may resolve this, by sharing the risk of lending by commercial banks to the agriculture sector. Development finance institutions and multilateral development banks should be setting up national risk-sharing facilities in every African country to leverage agricultural finance. And the African Development Bank is setting the pace based on a very successful risk-sharing scheme that I promoted while Agriculture Minister in Nigeria.

Infrastructure

Rural infrastructure development is critical for the transformation of the agriculture sector, including electricity, water, roads and rail to transport finished agricultural and processed foods.

The lack of this infrastructure drives up the cost of doing business and has discouraged food manufacturing companies from getting established in rural areas. Governments should provide fiscal and infrastructure incentives for food manufacturing companies to move into rural areas, closer to zones of production than consumption.

This can be achieved by developing agro-industrial zones and staple crop processing zones in rural areas. These zones, supported with consolidated infrastructure, including roads, water, electricity and perhaps suitable accommodation, will drive down the cost of doing business for private food and agribusiness firms.

They will create new markets for farmers, boosting economic opportunities in rural areas, stimulating jobs and attracting higher domestic and foreign investments into the rural areas. This will drive down the cost of doing business, as well as significantly reduce the high level of African post-harvest losses. As agricultural income rises, neglected rural areas will become zones of economic prosperity.

Our goal is simple: to support massive agro-industrial development all across Africa. When that happens, Africa will have taken its rightful place as a global powerhouse in food production. It could well also be feeding the world. At this point, the economic transformation that we are all working for will be complete.

Source:bizcommunity
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Agriculture

Cocoa Pricing: Why Public-Private Sector Partnerships are Key to Sustaining the Livelihood of Smallholders Farmers in Africa

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AFEX Commodities Exchange Limited (AFEX) CEO, Ayodeji Balogun (Source: AFEX)

Pricing is a debating point in the cocoa sector, dominating contemporary stakeholder conversations; especially African cocoa producers. This is a result of the historically low cocoa prices that do not provide a fair income to farmers involved in cocoa production. Despite the announcement of the Living Income Differential (LID) by both Cote d’Ivoire and the Ghana Cocoa Boards, there still exist questions on the sustainability of this intervention – to take farmers out of poverty. Stakeholders in the African Cocoa industry need to rethink its strategy to improving farmers’ livelihood, by increasing their earning potential through value chain efficiency, facilitated by public-private sector partnership.

Interventions aimed at income enhancement and lifting farmers out of poverty are often based on the assumption that the said interventions, alone, are enough for the solution being pursued. On the surface, the decision to increase the farmgate price of cocoa and LID by an additional $400 a tonne on all cocoa contracts, appear to be a solution to lifting farmers out of poverty. However, even if farmers’ incomes were to increase – through increased farm gate prices – other structural issues like small farm sizes and low productivity levels will still keep these farmers below the poverty line.

For Cocoa farmers to earn a fair wage from their input, issues like ageing plantations, lack of adequate training and financing as well as direct access to the market, need to be addressed. These structural issues pose a more significant threat on the livelihood of cocoa producers in Africa.  Price increases on their own are not enough to lift the poorest farmers out of poverty. Price interventions like the LID must go hand in hand with other policies and programme, implemented to increase the volume and quality of beans produced. Achieving this will require a multi-stakeholder collaboration involving both the private and public sector aimed at not only improving the quality of lives of farmers but ensuring that the cocoa value chain is optimized.

To enable smallholder farmers benefit in an egalitarian way from the cocoa industry, the focus should be towards improving value chain efficiency while addressing structural challenges in the sector. This is achievable through a public-private collaboration that will drive private sector operations to deepen financial markets, scale-up infrastructure investments and enhance productivity and quality through training and input supply.

Through collaborating with Cocoa Cooperative Societies –providing training, input financing and market access, AFEX has enabled smallholder farmers to increase their productivity, while producing to international standards. With technology like AFEX Workbench – a value chain management platform which facilitates input sourcing, loan administration, sales, a transparent and efficiently executed cocoa process is achieved.

A public-private sector-driven model will create a sustainable approach which will revitalize and boost cocoa production in Africa – creating jobs and improving the living standard of the farmers. While the government takes the driver seat to develop policies and the infrastructure to catalyze this growth across the cocoa ecosystem, private sector organizations will ensure value chain efficiency – increasing the benefits stakeholders gain from the industry.

AFEX is committed to providing the support and technology to improve the quality of life for African cocoa farmers and their communities.

Author: Ayodeji Balogun is the CEO of AFEX Commodities Exchange Limited (AFEX)

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Goodwell Investments Backs Chicoa Fish Farm With $1.5 Million Funding To Support Food Security In Africa

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Chicoa Fish Farm Production Breeding Cage, Mozambique (Source: Chicoa Fish Farm)

Series A funding enables Chicoa to contribute to a stable market for affordable protein and improve outcomes for smallholder farmers and food vendors in Southern Africa.

Chicoa Fish Farm, a Mozambican-based company addressing the critical challenge of a lack of affordable protein in Southern Africa, announced today that it closed its Series A equity funding round totalling $1.5 million from Goodwell Investments.  

Building A Sustainable Aquaculture Industry

Chicoa Fish Farm was founded by Gerard McCollum and Damien Legros in 2015 with the vision to provide a blueprint for a sustainable aquaculture industry across Africa. Since its inception, Chicoa has focused on securing its supply chain through primary production of tilapia, establishing a breeding program, and developing sales and distribution channels in Mozambique, Malawi, South Africa, and Zambia.   

The $1.5 million Series A funding boosts the transition to its next stage of growth — the processing and distribution of frozen tilapia products. To facilitate this growth, plans include extending production facilities, the installation of a processing plant and including local small-scale farmers in its model. At scale, Chicoa will produce over 5,000 tons of tilapia per annum, putting more than $10M of direct income into the local economy each year.  

“We are delighted that Goodwell has joined us on this really exciting journey to develop fish farming as an industry in Mozambique,” commented Gerry McCollum, CEO of Chicoa Fish Farm. “Being a first-mover is really challenging, but also hugely impactful. Not only do Goodwell bring a wealth of experience to the table, but their philosophy of supporting for transformative businesses in areas of most need makes them a perfect partner for us.”

Supporting Food Security

Food security is one of the biggest challenges facing Africa and Mozambique is amongst the worst affected, with nearly 80% of the population unable to afford an adequate diet. While the continent has the resources to feed its population, most countries are net exporters of food. Mozambique, for example, imports nearly double the value of fish products it exports. Further, regional aquaculture businesses currently satisfy just 6% of the total demand for fish across the Southern Africa region.

“The opportunity to develop the aquaculture industry to meet the local and regional demand is clear,” notes Dhanyal Davidson, Senior Investment Associate at Goodwell Investments. “The sector can play a key role in the economic development Mozambique by providing affordable, high-quality protein, creating jobs and generating income for local farmers, and promoting broader regional development.”

Affordable, High-Quality Protein

In the face of overfishing and climate change, aquaculture, in particular, provides a means of providing a stable fish supply without increasing the harvesting of wild fisheries beyond the maximum sustainable yields. Chicoa is the largest commercial provider of fish in Mozambique and works to increase yields to provide a sustainable protein source and facilitate import substitution, boosting the sector with an affordable, high-quality fish.   

“Chicoa’s significant traction achieved to date coupled with our visit to the farm in Tete solidified our confidence in the company and its potential. The company is driven by an experienced team with deep roots in aquaculture and Southern Africa, and we look forward to supporting Chicoa to fulfil its potential. Aquaculture is a new area to Goodwell Investments, and we are especially pleased to be joining the table with like-minded investors who bring along a wealth of knowledge in the aquaculture space,” added Davidson.   

Goodwell joins long-term Chicoa Fish Farm investor and leader in sustainable aquaculture investments, Aqua-SparkAmy Novogratz, Founder and Managing Partner at Aqua-Spark commented, “We are excited about Goodwell Investments joining the investor base of Chicoa. Finding a high-quality partner like Goodwell, committed to joining us for the long-term development of regional food security, keeps Chicoa’s vision on track.”  

By developing a vertically-integrated solution to kick-start the freshwater aquaculture industry in Mozambique, Chicoa helps to improve the lives and incomes of local fish farmers and increase the sustainability and stability of food supply across Southern Africa.

Source: Goodwell Investments

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Agriculture

Cold Logistics Academy: Perishable Export Logistics Training (PELT)

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Cold Logistics Academy, the training arm of Kennie O Cold Chain Logistics is poised to train aspiring and professionals in the cold chain and logistics industry. The Academy have a robust curriculum that spans across the relevant aspects of the profession. With seasoned facilitators, it guarantees a training experience with practicable modules and engagement.

Cold chain logistics plays a huge role in export of fruits and vegetables; whether by Air, Sea or Road. From the farm gate to the final destination.

Learn practicable skills in cold chain logistics and export from experts. Get certified in the Perishable Export Logistics Training (PELT).

The Cold Logistics Academy course has been developed to handle challenges and provide solutions in the transportation of perishables. The course content includes Cold Chain Logistics and Freight, Export documentation and planning, Insurance and claims, Packing and labeling for Export, Food safety and handling.

Who to attend

• Logistics professionals working in cold chain and related services.
• Senior and midlevel managers involved in cold chain design.
• Certification bodies.
• FMARD.
• Operations and logistics managers.
• Warehouse managers and supervisors.
• Transport managers and supervisors.
• Third-party logistics personnel looking to improve their current operations, or providing cold chain services.
• Supply Chain Managers.
• Exporters.
• Route Planning Managers.
• Cold Room and Storage Professional.
• Farmers and Agribusiness Practitioners.
• Pack house.
• Quality Assurance managers.
• Consultants.

The extensive modules includes; 

Module1. Export documentation and planning.
Module 2. Logistics and Freight (Cold Chain Logistics).
Module 3. Insurance and claims
Module 4. Packing and labeling for Export.
Module 5. Food safety and handling.

The Speakers

• Ope Olarenwaju CEO Kennie O Cold Chain Logistics.
• MudiagaOkumagba General Manager, RedStar Express PLC.
• Kinsley Kwalar CEO StilFresh.
• Adebola Akingbele Founder Msvalue food safety practices.

Date: 24th and 25th November 2020.

To register for the training, Clck here

Also Read Closing The Gender Gap: An Interview with Dream Girl Global (DGG) Founder, Precious Oladokun

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