Connect with us

Agriculture

Getting women in the driver’s seat of Africa’s agribusiness revolution

Published

on

Monica Musonda, CEO Java Foods shares a joke with colleague as they package Supa Cereal Bags (Photo: AfDB)

ABIDJAN, Ivory Coast, November 25, 2019- Monica Musonda, CEO of Zambian food processing company Java Foods,  certainly faced hurdles in her rise to the top, but she overcame them.

“Although the barriers to entry for women can be frustrating, they are often basic and relatively easy to resolve,” she said, playing down her struggles. “My climb up the agribusiness ladder has been challenging but definitely worthwhile.”

Musonda, whose company produces affordable and nutritious food snacks made from local ingredients, is one of just a handful of female agripreneurs who have successfully broken through the proverbial glass ceiling in Africa’s agribusiness industry.

Women are the backbone of Africa’s agricultural sector. From farm to fork, African women are players along the entire agricultural value chain, be it as farmers, livestock breeders, processors, traders, workers, entrepreneurs or consumers. While their influence on the continent’s growing agribusiness industry is undeniable, more solutions are needed to address the gender-specific challenges they face to boost their participation.

The average African woman is a budding entrepreneur either by choice or by circumstance. According to the  Global Entrepreneurship Monitor Women’s Report 2016/17, the continent has the highest percentage of female entrepreneurs in the world, with one in four women starting or managing a business. The agribusiness industry is often the natural focus of this entrepreneurial drive.

Across the continent, women dominate as primary processors post-harvest, as traders with bustling market stalls, as owners of fast food restaurants and with increasingly frequency as manufacturers of packaged ready-to-eat food products. Yet despite this dynamism, female-led agribusinesses tend to remain small, fragmented and informal in nature. They struggle to sustain and scale-up their agribusinesses into well-organized profitable enterprises.

Admittedly, the challenging business environment in many African countries including poor infrastructure and unreliable legal and regulatory systems affects all business activities of both men and women. However, in addition women-led businesses must also grapple with a number of gender-specific constraints, inhibiting their expansion into more lucrative market segments.

Firstly, African women often lack the technical know-how.  Despite the gains in female education on the continent, highly productive agribusinesses require specialized vocational and technical skills in fields such as food safety, food conservation, packaging and product certification which many African women do not readily possess.

Access to finance is the most frequently cited obstacle by African SMEs. Women entrepreneurs face multiple difficulties in securing funding mainly due to lack of collateral in the form of land and other tangible assets and a high-risk perception. According to the African Development Bank, an estimated $42 billion financing gap exists for African women across business value chains, including $15.6 billion in agriculture alone. Women are forced to rely on personal savings and family loans which are rarely enough to fund their businesses to scale.

Thirdly, socio-cultural barriers and stereotypes persist. African women remain the primary caregivers in families meaning that managing those responsibilities while growing a thriving business can become a difficult balancing act.

Over the last two decades, many governments and development institutions have rolled out programs to promote access to finance, agricultural inputs and provide technical support and business training to female agripreneurs. The African Development Bank recently set up the Affirmative Finance Action for Women in Africa (AFAWA), a bold pan-African initiative to bridge the financing gap facing women. It adopts a three-pronged approach centered on improving access to finance, providing technical assistance and strengthening the enabling environment.

It often takes very little to make a difference. The capital injection required by the majority of female led SME agribusinesses on the continent is typically less than $50,000. And women have consistently proven to be more credit-worthy than men, usually paying back loans within agreed timeframes. Successful solutions by women for women such as microfinance and saving groups, peer-to-peer training and information sharing should also be reinforced and taken to scale.

More of such initiatives are urgently needed across the continent. Solutions must be based on in-depth engagement with the women business owners themselves to properly understand their frustrations and needs. Tailored programs designed to specifically address these pain points are critical. The Global Gender Summit is a timely opportunity to drive this forward.

Women are central for Africa’s agricultural transformation to be successful, sustainable and inclusive. More African female agripreneurs must be supported to grow and progressively transition into the business segments of agricultural value chains which are most profitable. It has been proven time and time again that when African women thrive the entire society shares in those dividends.

Also Read: Meet Sivi Malukisa, The Congolese Entrepreneur Whose Food Startup Is Promoting DRC Cuisine

By: Mariam Yinusa and Edward Mabaya are Principal Economist and Manager, respectively, in the Agribusiness Development Division of the African Development Bank.

African Development Bank Group (AfDB)

Agriculture

Climate change report shines spotlight on Africa’s agriculture potential

Published

on

It seems almost incongruous to talk about the opportunity that exists in ensuring the world’s food security by bolstering Africa’s agricultural output when the very pressing and public crisis of climate change could be its undoing.

Particularly in the run up to COP26 and the “reality check” that came with this week’s release of the Intergovernmental Panel on Climate Change (IPCC) Six Assessment Report, it is clear the entire African continent is “highly exposed” to climate extremes, at a relatively “high level of vulnerability”.

With over two thirds of Africans deriving their livelihood off agriculture, climate change-led crises like droughts, floods and cyclones continue to threaten the continent’s economic growth, employment, and food security. And yet, ensuring Africa’s agricultural resilience would not just help Africa. It’s essential for ensuring global food security. 

What’s more, these climate-led natural disasters have the greatest and most disproportionate impact on small- to medium-scale farmers, comprising as much as 80% of Africa’s agricultural output, from maize and wheat to rice, cassava, and sorghum. 

“The UN Report confirmed that climate change is intensifying the water cycle and affecting rainfall patterns, bringing more intense rainfall and associated flooding, as well as more intense drought in many regions,” says Malvern Chirume, African Risk Capacity Limited Chief Underwriting Officer.

“These African farmers are the heart of the continent’s agriculture and are at the mercy of climate change events completely out of their control,” Chirume adds.

Established in 2014, ARC Limited provides natural disaster insurance relief to African countries which have joined the sovereign risk pool.

Along with its partners, which provide premium support, the insurer has already paid over US$65m to seven African countries to provide drought relief and address the economic concerns these countries’ most vulnerable citizens face.

Responding to the climate crisis

Traditionally, countries have responded to climate change-led disasters such as droughts or floods by raising funds for emergency relief. This approach is time-consuming and inefficient.

“It takes far too long for African countries to mobilise the immediate resources they need for relief efforts, to save lives and livelihoods. Our role at ARC Limited is to work with countries to prepare them for the risk exposure they have and how to respond swiftly to climate-related food security emergencies. This includes helping them to establish a rainy-day fund which pays out swiftly, before the problem has become worse, and more funding is needed.”

The ARC Limited model, built on parametric insurance (pre-specified pay-outs based upon a trigger event), has been highly successful, says Chirume.

“We have to date paid out close to $65 million dollars in claims. When one considers that every dollar in insurance pay-outs saves US$4 dollars, this makes the cumulative economic impact around US$240 million. With those funds, we’ve helped more than 5.9 million people whose livelihoods have been affected by climate change impacts,” Chirume explains.

While parametric insurance against natural disasters has enormous potential for the agricultural sector, it has a further economic impact. Because agriculture makes up such a significant portion of the continent’s economy, a downturn caused by a climate shock will echo through the broader economy of any nation affected.

This can bring an economic downturn, a lack of funding for key infrastructure and services at government level, and a loss of jobs as farmers struggle to recover. There is also evidence of migration away from areas experiencing drought, which can have a long-term impact on the regional economy.

Organisations such as ARC Limited have an essential role to play in this way in protecting agricultural value chains and the economies of and employment in Africa. “Our role is to help mitigate and manage the risk, building resilience and ensuring the African country is able to bounce back sooner after a natural disaster,” says Chirume.

With the negative impacts of climate change increasing and their potential to devastate the agricultural sectors and food security of African countries, it has become more important than ever to put sustainability at the heart of interventions.

“Creating an environment that limits the impact of climate shocks on the agricultural sector is about more than just securing economic transformation. At the heart of this investment is the need to ensure basic food security for the continent and the world,” says Chirume.

In its Sustainable Development Series, the World Bank says the African continent could play a leading role in ensuring food security for the earth’s estimated 9 billion people by 2050.

According to McKinsey, Africa’s full agricultural potential remains untapped. It determines that Africa could produce two to three times more cereals and grains, which would add 20% more cereals and grains to the world’s current output of 2.6 billion tons.

Given Africa’s productive potential, the continent could be a key contributor to feeding the world in the future. But to fully realise that potential will require overcoming many obstacles, including how it deals with the impact of climate change on agriculture and food security.

“We need broader collaboration between private and public sector to solve the climate change disaster response problem our continent faces. The problem is so big, that all of us have a role to play,” says Lesley Ndlovu, ARC Limited CEO.

With the support of the United Kingdom and German Government, ARC Limited has been equipped to help the member states of the African Union reduce the risk of loss and damage caused by extreme weather events affecting African populations.

“But there’s so much more work that still needs to go into reaching as many people as possible to help build the resilience of local communities and ensure they have the means to bounce back whenever they are impacted by a natural disaster,” concludes Ndlovu. 

 

Download BAO E-MAGAZINE

Continue Reading

Agriculture

World Poultry Foundation (WPF) launches video series to help Africa’s farmers improve poultry production

Published

on

With poultry increasingly a focus for emerging farmers across Africa, the US-based World Poultry Foundation (WPF) has released a series of training videos to help farmers reduce waste and optimise profits.

Feed accounts for up to 70% of the costs of raising poultry, so proper feeding techniques enable farmers to reduce waste, cut production costs and raise healthier birds, says WPF. Water is equally important in poultry farming, with proper water management crucial for healthy birds.

WPF’s training series, with four videos dedicated to production, explains how farmers should store feed, proper feeding of poultry and how to prepare and manage zones of comfort to encourage proper brooding for chicks. The videos also explain the importance of litter in helping to prevent common diseases to improve production and returns.

World Poultry Foundation CEO Randall Ennis says the video series has been developed to address the most common challenges faced by emerging poultry farmers across Africa. “By applying best practice poultry farming methods, farmers can significantly increase their production, their incomes, and the nutrition available to their families and communities,” he says.

The training videos, as well as free checklists and worksheets, are available here

 

Download BAO E-MAGAZINE

Continue Reading

Agriculture

AFEX Raises $50Million for Agri-SMEs, Africa’s First Warehouse Receipt Backed Commercial Paper

Published

on

AFEX CEO, Ayodeji Balogun (Source: AFEX)

AFEX Commodities Exchange Limited (AFEX), Nigeria’s leading private commodities exchange company, has announced the first Warehouse Receipt Backed Commercial Paper in Africa, with tech-enabled operations and a 24-hour fast cash turnaround for borrowers. With over $50 million raised for Agri-SMEs, this bridges the funding gap between lenders and borrowers in the Nigerian agricultural sector with a commodity-backed instrument – for the first time.

The AFEX financing deal will help eradicate the high cost of procurement incurred by processors by deploying a discounted value of a warehouse receipt distributed among five leading players in the Food and Beverage, Trading Poultry and Animal Feed segments in Nigeria. The receiving companies are top 10 players in their respective segments. They have now been enabled access to a tool for managing price volatility, enabling up to 30% direct savings on prices.

“With our vision to reach a cumulative total of over $5 Billion in investment to the agriculture sector over the next five years, this financing deal is right on track to achieve this goal’’ – said Ayodeji Balogun, CEO, AFEX Commodities Exchange. “As we move towards building a derivatives market in Africa, we want to be able to reduce exposure to price risk for stakeholders, by enabling them to hedge their positions and trade in commodity derivatives.”

The warehouse receipts, which can then be transferred from commodities to a financial asset and listed under the borrower’s portfolio on the AFEX trading platform, will create a sustainable funding structure and address underfunding in the Nigerian agricultural sector. With the warehouse receipt system linked to financiers, the system allows financiers value and marks the commodities’ price to market on a real-time basis.

“Our mission is to provide low-risk working capital facility for stakeholders in the Agro sector, in a way that is transparent and has a very high viable investment return’’ – said Akinyinka Akintunde, VP Financial Markets at AFEX. “As a licensed commodities exchange and warehouse receipt system operator, we deploy a warehouse receipt system and collateral management infrastructure to increase market confidence for both lenders and borrower.”With AFEX’s goal to support Africa’s food security while promoting a fair exchange of value among players in commodity value chains, this deal’s social impact is delivered through market access for farmers and reduced post-harvest losses. AFEX continues to contribute to the United Nations Sustainable Development Goals 1, 2, 5 and 8; no
poverty, zero hunger, gender equality, decent work, and economic growth.

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

Download BAO E-MAGAZINE

Continue Reading

Ads

Most Viewed