Using satellite information through global positioning system to collect precise and accurate coordinates of farms and match them with the locations to aid their dissemination to farmers, a project launched recently in Uganda is transforming the livelihoods of smallholders.

The Technical Centre for Agricultural and Rural Cooperation-led project has significantly increased smallholders’ crop yields and helped improved their livelihoods. Based on information and communication technologies (ICTs), the project has agents who profile willing farmers into the service using mobile phones. The agents visit smallholder farmers at their homes and farms and take their details including -names, members of the family, type of crops they grow and their historical yields. After being enrolled, farmers can then receive preseason messages on their mobile phones.

Balidawa Siraj, a farmer who serves as an agent of the project, is in charge of a sub-county with about 630 smallholders including 330 women, says his work is to sensitize farmers about the project and the advantages of enrolling in the service.

The project’s agents such as Siraj also give specific advice to farmers on when to plant, how to plant and types of crops to plant depending on the preseason messages received.

Transforming farming and economies

According to Michael Hailu, director of the Technical Centre for Agricultural and Rural Cooperation, agriculture should not only be taken for subsistence but as a business for smallholders to have enough not only for consumption but also to improve livelihoods and transform countries.

 “The role of the smallholder producer is extremely important especially in Africa in terms of creating jobs but in order to succeed, agriculture has to be transformed,” explains Hailu.  “It is through innovations and inclusion of technology into agriculture that smallholders can see high yields and also improve their incomes, livelihoods and their country’s economies”

Dick Nuwamanya Kamuganga, the president of Ugandan National Farmers Federation, said that, “the projects major challenge is the subscription of small-scale farmers as some are less educated and not able to conceptualize the digitization of the project operations.  It takes time to be able to convince some farmers on how helpful the technology is to them.”

Sustaining digital agricultural projects

According to Hailu, there is a need for digital agriculture to be self-sustainable and free from funding.

Siraj says that farmers have to pay a fee before they can be enrolled and start receiving alerts. “The four packages for services are not free. Initially, the fee was 14,000 Ugandan shillings (almost US$4) but it rose to about U$5 from January to June. However, the fee totally caters for the insurance,” he explains.

Dennis Rapong’o, the lead agronomist at UjuziKilimo-Kenya, an agricultural technology company, says that agriculture in Africa is headed in the right direction and with the right tools, there will be a reduction in poverty as a result of increased crop yields.

UjuziKilimo-Kenya has developed a sensor-based soil testing kit to analyse the quality of soil, location of farms and send values to a database from which farmers receive short messages on their mobile phones on suitable seeds, soil treatment methods, fertiliser for high yields, he adds.

Farmers who have subscribed to UjuziKilimo technology also receives an additional relevant agricultural information and also market linkages and average market pricing for their produce.

But Rapong’o says that adopting such technologies by farmers is not easy because most are not flexible to change from their old ways of farming to modern methods influenced by such technologies.

“To deal with the challenges, it is important to have farmer education on digital agriculture,” he tells SciDev.Net. “Let farmers understand the importance and value of technology in agriculture before rolling out the programmes.”

Credits to SciDev.Net’s Sub-Saharan Africa English desk.

This surge in numbers will have significant ramifications for the continent’s food security, which is already under pressure mainly due to climate change. The good news is that Africa’s agriculture sector has been growing at a steady pace and the continent boasts at least 65% of the world’s uncultivated arable land. If this is fully utilized, then African farmers could meet the food needs of the entire world.

As things stand, however, the continent will continue to be dependent on the rest of the world for food, with imports amounting to $35bn annually entering the African market. This includes imports of staples such as wheat ($9.3bn), rice ($5.3bn) and maize ($4.1bn). The rate is projected to rocket up to $110bn by 2025. The current system is geared towards cheap imports of commodities such as sugar, rice and palm oil which are all also produced in Africa, making it very difficult for domestic farmers and food processors to compete.

The conundrum is clear: Africa must find a way of scaling agricultural output. In response to this challenge, the African Union adopted the Comprehensive Africa Agriculture Development Programme (CAADP) in Maputo, Mozambique in 2003. One of the key policies called for member states to increase public agricultural investment to 10% of national budgets per year and for a 6% increase in agricultural productivity per year.

Obstacles to investment

Despite most member states signing up to the ambitious strategy, very few nations have met the minimum requirements of the programme. While the African Union attempts to accelerate CAADP, agribusinesses have to rely on the private sector to help meet its funding needs in some countries. However, investors tend to be reluctant to offer affordable finance to agribusinesses because they consider the sector to be too risky, according to Dagmawi Habte-Selassie, programme officer at the UN-backed financial institution the International Fund for Agricultural Development (IFAD).

“The challenges facing the agribusinesses in Africa is that there is a shortfall in access to finance because many financial institutions view the sector as too risky,” Habte-Selassie says. “Some of the main obstacles cited by these institutions include an absence of data such as information on land titling, weak infrastructure in some areas, insufficient regulations and a lack of collateral to access significant amounts of funds, to name a few. “Investors would rather throw their backing to something which will guarantee returns such as real estate or ICT-related investments, but if you show them the model that is viable then they will definitely be willing to step in and seize the opportunity.”

Only 3% of total bank lending in Africa is allocated to agribusiness, this despite the fact that it contributes 40% of sub-Saharan Africa’s GDP and employs 70% of the population. The available domestic funding is expensive, with agricultural lending interest rates reaching as high as 50% in some countries. De-risking agricultural investment is achievable through the right kind of collaborations between government, private sector, and agribusiness stakeholders.

De-risking agribusiness

Private investments in the agriculture sector are mainly targeted towards high-value crops and export products such as flowers. There is also an increase in countries such as China purchasing land in some African countries to secure their long-term food and biofuel supply. There are also a number of private agribusiness investment funds targeting African agriculture. These funds use various instruments such as quasi-debt investments and public-private partnerships (PPPs). 

More investors are embracing the opportunities on offer in agribusiness, but the lack of consistent government policy and poor regulations in some countries continue to constrain investment, according to Hans Bogaard, director at the Dutch development bank FMO. “It helps if governments and policymakers don’t interfere in agriculture in a way that creates uncertainties and unpredictabilities in the market,” Bogaard says. “The governments need to really understand that they have to facilitate a strong agricultural sector, which means investing in the rural infrastructure and creating predictable regulations.”

Government intervention, however, is required to improve poor infrastructure in every stage of the supply chain. Improving rural roads or implementing cold storage facilities could boost the volume of quality products making their way into the market. More countries need to ramp up their implementation of CAADP and embrace pro-private sector policies such as offering tax incentives to new agri­businesses. While these measures will go some way to making agribusiness an attractive investment prospect, systemic issues, especially the fragmented nature of Africa’s agribusiness will continue to hamper the sector.

Supply chain

The majority of farmers in Africa work on plots of land which are at the most one hectare, which limits their ability to scale and achieve higher yields. Smallholder farmers also tend to use poor quality of seeds and their operations are significantly less efficient than commercial farmers because they do not use modern equipment such as tractors or irrigation. Many of these farmers are isolated from the market, which not only affects their earnings but also their credit worthiness.

Therefore, it is critical that they are given the right support that will allow them to enter into the supply chain, according to Bogaard. “There will always be a role for both commercially-driven and subsistence smallholder farmers because they represent 90% of agricultural output,” he says. “It is vital that they get support such as good seeds and fertilisers, which will increase their capacity to produce for the market, and get contracts with processors or traders that are integrated into the agribusiness value chains.” Only after they have successfully linked into high-value markets will investors, such as local banks, be willing to provide finance and support for them to grow their business, he concludes. 

Written by Taku Dzimwasha

China is welcoming the African leaders to Beijing for the second Belt and Road Forum for International Cooperation, taking place today (25 April 2019) and ending on April 27.

“The positive remarks by UNECA Executive Secretary (Vera) Songwe again reflect the endorsement by African countries and people. So far, 37 African countries and the AU Commission have signed BRI cooperation agreements with China,” said Lu Kang, spokesman for China’s Ministry of Foreign Affairs. “The two sides have already launched many important cooperation projects and achieved early harvests.”

Africa’s history and its geographical links to China are “indispensable and important” for achieving the Belt and Road vision, he said.  “The vision, goals and cooperation areas of the BRI and the objectives and priorities of Africa’s efforts to achieve development and revitalization by advancing Agenda 2063 are mutually reinforcing,” Lu added.

Songwe told Xinhua in an interview last week that the Belt and Road Initiative will positively affect hundreds of millions of people in different countries, while it helps Africa develop infrastructure and employment.

“This (BRI) is probably one of the biggest growth and development initiatives that we have in the world,” Songwe said, noting that China’s BRI is essential to Africa’s future.

Leaders and senior representatives from many African countries will attend the Beijing forum, Lu said. “China stands ready to work with African countries,” he said, stressing mutual aligned goals. “We will advance bilateral cooperation in areas including industries, infrastructure, trade and investment, improve the living standards of African people, bring more development dividends to African countries, and deliver more benefits to people in China and Africa.”

Source: Africa Time

 Boosting rice production in order to cut import bills and create jobs is a central pillar of Sierra Leone’s new national development plan. 

The government of Sierra Leone, which marks its first year in office in April, has made increased rice production one of the key pillars of its development strategy, with hopes of achieving self-sufficiency in the staple food in “the shortest possible time”.

In addition to the $34m set aside in this year’s budget to support the cultivation of rice and other food crops, the government recently signed a $12m financing agreement with the International Fund for Agricultural Development (IFAD) that will channel funding and other support to smallholders.

This scheme will provide assistance to those engaged in the production of cash crops like cocoa and coffee.

President Julius Maada Bio pledged during last year’s election campaign that he would make agriculture, especially rice production, a major priority. 

“We are going to charge forward with the pledges – free quality education and agriculture – and deliver on our promises,” he reiterated. 

Sierra Leone’s economy is essentially agrarian, with upwards of 75% of its 7.5m people employed in agriculture.

Approximately 70% of the youth population are unemployed or underemployed, and policymakers believe that agriculture could help to solve the problem.

Since 53% of the workforce of 3m is made up of women, the government believes that a coherent strategy will also benefit this traditionally disadvantaged group.

From the 1950s until the mid-1970s the country was an exporter of rice.

Today, it is a net importer of the crop, putting a strain on scarce foreign exchange. In a situation where revenues from cash crops like cocoa and coffee cannot cover the food import bill, the result has been worsening trade and balance of payments figures. 

UNCTAD figures reveal that in 2009/10, food imports (as a percentage of total commodity imports) amounted to $151m (32%), rising to $387m (60%) in 2014/15. In 2017, rice alone accounted for 15%, with a spend of $190m.   

Five-year plan

According to Tamba Lamina, Sierra Leone’s high commissioner in London, the problem will be tackled by the government’s integrated agricultural policy, part of a new five-year, $8bn national development plan unveiled by the president in February:

“We believe that by halving (the import bill), or eliminating importing rice, the foreign exchange that is saved can go into developing other industries”.

The measures being spearheaded, in partnership with the World Bank, IFAD and private sector companies, are intended to increase the mechanisation of agriculture, promote research and development of improved varieties of rice, cocoa and coffee, and enhance livestock production.

Sceptics say the plan, endorsed by the IMF and the World Bank, is overly reliant on private sector participation in a country that struggles to attract investment.

Total private sector investment in rice production is relatively low, estimated at less than $500m.

There are a limited number of investors, including a Chinese-based consortium, China Hunan – which has signed a deal to cultivate 35,000 hectares – and smaller players like the West African Rice Company, Sewa Farms, and Lion Mountain Agriculture, the latter a conduit for venture capitalists.

Yet there is much to do if other companies are to be attracted.

“The investment we have seen so far is a good start,” says a government source. “But it is still a long way short of what this country needs to meet our self-sufficiency goals. We need up to three times that level.”

Two-pronged approach

Would the government step in to pick up the slack if private sector investment could not provide the jobs or resources needed for development?

For instance, would the government set up a state rice farm to create jobs and feed the nation?

“What the government is actually doing is empowering people in the rural areas, bringing in mechanised farming, giving them the sort of income in terms of short-term loans in order for them to develop agricultural land,” says Lamina.

“But it has to be a joint approach.

No government in any developing country can carry the burden of the whole nation without the private sector stepping in… If we have the right laws, people can come and invest and our people can benefit from it.

So it’s a two-pronged approach; government is doing its own, in terms of empowering the rural communities, but we also need private sector investment.

With the right regulation, they can come in, they can assist. It’s a win-win situation, they get their profits and we get our benefits as well.”

Towards food self-sufficiency

Sierra Leoneans hope that Bio’s reforms will lead them towards food self-sufficiency.

The initiative is part of the government’s aim to diversify away from an economy overly dependent on mining – including gold, diamonds, iron ore, bauxite and rutile.

Rampant gold and diamond smuggling, as well the cessation of iron ore mining due to falling prices and the Ebola outbreak of 2014-16, served to reinforce the danger of a one-track economy.

The marine and tourism industry have also been targeted for a revamp, while agro-based industries are being encouraged to add value.

Source: African Business Magazine

The African Export-Import Bank (Afreximbank) is working, with the support of African Union (AU), to create a digital ecosystem that will eliminate the major bottlenecks to trade finance flows within Africa, Bank President Prof. Benedict Oramah recently announced in Washington D.C.

Delivering an address at the IGD Frontier 100 Forum organized by the Initiative for Global Development (IGD) on the sidelines of the World Bank/IMF Spring Meetings, Prof. Oramah said that one of the major constraints to intra-African trade was lack of information to support intra-regional trade and investments.

Adding that was why many African countries were importing products from outside the continent while neighboring countries were exporting the same products at a much lower cost.

It was to address that challenge that Afreximbank and the AU were working to use digital technology to improve access to trade information and facilitate the use of African national currencies via intra African trade settlements, he explained.

Oramah said that Afreximbank was developing a focused programme to support small and medium enterprises (SMEs) across the continent, recognizing that SMEs were a vital component to unlocking intra-African potential.

In his opening remarks Oramah noted that IGD has been facilitating discourse on important African issues over the years and said that Afreximbank identified with the efforts and achievements of the IGD, hence its close partnership with the initiative.

Also speaking, Leila Ndiaye, President and CEO of IGD, said that the initiative’s work was aimed at supporting Africa’s growth and development agenda and at pushing to unlock intra-African trade through SME growth and development.

Oramah and Hippolyte Fofack, Afreximbank Chief Economist, who accompanied him to the event, also participated in two panel discussions, on “Supporting Africa’s Growth and Development Agenda” and “Expanding Regional Trade and Investment for Africa’s future”, respectively.

Written by: DIBIE IKE Michael

Kenya’s Nairobi Securities Exchange (NSE) has set up an incubator programme to prepare young companies for an eventual listing or bond issuance on the bourse, its chief executive said, in a bid to boost the number of firms it lists.

The exchange – a key entry point for foreign investors seeking exposure to East Africa’s fast-growing economies, and the continent’s fifth biggest overall has seen the number of companies it lists hold at about 65 for many years.

Known as Ibuka, Swahili for Emerge, the new scheme is targeting start-up firms in fields such as financial technology and entertainment.

“As opposed to waiting for companies to come to the market when they are ready, we want to make them ready. So the three stages of Ibuka, is one we want to get them ready which is the incubator. We then prepare them and get them fit, which is the accelerator, and then we take them to the third stage which is where we want them to get value. Which is where now they are able to access different products in the market,” said NSE CEO, Geoffrey Odundo.

In partnership with other organisations, the NSE offers the companies training in issues like corporate governance, and also helps them widen their networks.

Six firms have been admitted since launch last December, including APT Commodities, which trades tea in the coastal city of Mombasa, Blue Nile Rolling Mills, a steel company and Globetrotter Agency, a travel company.

“So IBUKA makes sense because we want to grow, whether it is capital injection or market growth which is what everybody looks for, and especially if it is global growth. I want to do the recognition, I want to be recognized globally as well,” said Vidya Jethwa, the travel agency’s managing director.

At least three other private companies were likely to list their shares on the main market segment later this year, Odundo said, adding they were also discussing an initial public offering for the government’s National Oil Corporation.

The government plans to raise US$1 billion by listing National Oil this year, and to use it as a vehicle to hold its 25 percent interest in oil fields discovered in the north by Tullow Oil and its partners in 2012.

Source: Reuters

Ethiopia’s prime minister Abiy Ahmed has been described as a reformist, credited with turning around the political, business and diplomatic climate in less than 12 months since he took office last year in April.

Abiy’s decision to pursue reconciliation with Ethiopia’s neighbour Eritrea, has paid dividends, triggering a wave of diplomatic breakthroughs in the Horn of Africa region.

The peace deal has also had positive effects in the political and economic spheres, as rebel groups that sought refuge in Eritrea return home, and trade is boosted by the new possibilities of access to the sea via Asmara.

Tackling foreign currency shortage

While Ethiopia has been the fastest growing economy in Africa for the past decade, the landlocked country of 100 million people is heavily dependent on imports.

At the time Abiy took office, analysts said the country’s foreign currency reserves had been reduced to less than one month’s worth of imports, partly because of high expenditure on big infrastructure projects.

Having warned that the currency crisis might last for 15 or 20 years because of government’s plans to continue expanding its infrastructure and the nascent manufacturing sector, Abiy has embarked on a process of liberlising the economy to attract foreign direct investment

In Julyu last year, Abiy called upon all hoarding hard currency to deposit it in banks, warning that those anyone who refused to heed the call would be tracked down.

A diaspora fund was also opened to ask Ethiopians living abroad to contribute towards easing the foreign currency crisis.

Privatisation of state companies

In February, Ethiopia’s finance ministry announced that government will give priority to the partial privatisation of Ethio Telecom as it takes notes on the best approach to the process of liberalising the economy.

By selling stakes in state-owned companies including Ethiopian Airlines, Ethio Telecom, Ethiopian Shipping & Logistics Services Enterprise, and Ethiopian Electric Power, Abiy’s government hopes to attract foreign investment and stimulate economic development.

Port deals with neighbours

Working to offset the limitations of being a landlocked nation, Abiy’s government has secured port deals with all its neighbours which have access to the sea (Kenya, Sudan, Eritrea and Djibouti).

• Ethiopia to jointly develop facilities at the Port of Djibouti in exchange for stakes in in state-owned Ethiopian firms.
• Ethiopia to set up a logistics facility at Kenya’s Lamu port.
• Ethiopia to have a stake in Port Sudan.
• Ethiopia to acquire a 19 percent stake in the Port of Berbera in the breakaway Somali region of Somaliland.
• Ethiopia now has access to Eritrean ports since the July 2018 peace deal was signed.

Djibouti handles roughly 95 percent of all inbound trade for landlocked Ethiopia.R

Under Abiy, Ethiopia has also embarked on a ‘Doing Business Initiative’, that is aimed at creating a conducive environment for businesses to start up and to also have access to finance.

Gambia’s parliament on Tuesday approved the Africa Continental Free Trade Agreement (AfCFTA), becoming the 22nd nation to do so, and effectively meeting the minimum threshold for the agreement to come into force.

The AfCFTA which was enacted last year, seeks to create the largest trade zone in the world, increase intra-African trade by 52% by the year 2022 and remove tariffs on 90% of goods.

African Union’s Commissioner for Trade and Industry, Albert Muchanga led celebrations of the historic achievement, posting on his office Twitter account that the AfCFTA market is ready for the launch of its operational phase in July this year’.

Source: Africa News

China Nanchang Engineering, has approached Harare City Council with a deal to supply 600 green energy (solar-powered) buses and additional fixed and working capital to service routes in Greater Harare Metropolitan.

The project will include a central business district (CBD) shuttle service and the Harare Urban Route will service all suburban routes. It’s divided into Norton, Southern, Eastern and Western suburbs.

According to recent minutes of the Environmental Management Committee, in the initial stage, 35 buses will service the Harare-Norton route. Chitungwiza will have 45 buses and Ruwa 20.

“Operations would be managed from four established depots, two in Harare, one in Chitungwiza and one in Norton,” read the council minutes. “Depots would be firstly fitted with maintenance and recharging facilities and would be large enough to cater for some 200 buses each.

“The project would have 12 battery swapping stations and they would act as charging centres. The bus types would be a new energy concept and Harare would be the first city to implement it in Africa. Transport services would run 19 hours every day from 4am to 11pm.”

Environment Management Committee chairperson Councillor Kudzai Kadzombe said the project would help the city in sprucing up its image while at the same time providing residents with decent transport.