Zambia's president, Edgar Lungu, has pledged to support to the agriculture sector by improving the provision of farming inputs and finding new markets for farming products.
By Nawa Mutumweno
Of all Zambia’s economic sectors, agriculture holds more promise than any other in the country’s march to economic diversification.
Since mining, the country’s prime industry, is a wasting asset, it is important more than ever before, to explore sectors that are sustainable to wean the country from the copper spoon it was born with.
Zambia’s has 40 percent of the water resources of the entire southern African region. Of the 58 percent arable land, only 14 percent is currently cultivated. In real terms, this means that of 42 million hectares, only 1.5 million hectares is farmed each year.
The agricultural sector employs 85 percent of the population and makes up around 20 percent of overall gross domestic product (GDP).
Food processing represents an outstanding investment opportunity in Zambia due to vast natural resources, extensive arable land, ample water and investment incentives and many joint-venture options.
The Zambia Association of Manufacturing (ZAM), says despite its strong performance, the country’s food-processing industry has achieved only around one-quarter of its capacity and potential so far.
‘’There are vast opportunities for more investments in most sub-sectors of Zambia’s food-processing industry, for both small-scale and large-scale projects,’’ ZAM says.
High potential sub-sectors encompass growing and processing oil seeds; downstream processing of meat and dairy products; producing palm oil; manufacturing soy-based food products; million wheat, rice and maize to produce flour; producing juices, carbonated drinks, beer and other beverages; processing groundnuts; producing ketchup and other tomato-based products; roasting and grinding coffee beans; processing cassava, pineapple, mangoes and sugar cane; producing dried fruit and processing fish to exploit Zambia’s vast fish resources.
Other investment opportunities include producing tinned foods, confectionery, bread products, honey and cheese.
One example of potential food –processing projects in Zambia is COMESA’s Regional Investment Agency (RIA) promotion of a greenfield project to build pineapple –canning factories in the north-western part of the country
Mwinilunga district in the province has been ranked as Zambia’s best location for pineapple production. In the 1990s, a pineapple processing facility in the area produced around 11,368 tonnes
from 1,421 hectares of pineapple plantations. The facility was later closed down. The planned new plant is expected to produce about 12,000 tonnes of processed pineapple per annum.
In diversification away from maize, one of the sub-sectors which is being promoted is aquaculture. In August 2015, the Government launched a $10 million privately-owned fish farm, Yalelo. The firm, located on the shores of Lake Kariba in southern Zambia, already produces 6,000kg of tilapia daily.
In a deliberate effort to increase domestic fish production, the Government is encouraging private investment.
The Common Market for Eastern and Southern Africa (COMESA) recently received $400,000 to support the growth of the leather sub-sector in Zambia and three other member countries.
Zambia has the potential to grow its leather value chain to half a billion dollars a year if all hides are transformed into finished products. The state has also agreed to waive taxes on leather production machines and equipment to further enhance growth.
Farm Block Development
In a bid to grow the agriculture sector, Government is developing the Farm Block Development Programme with vast opportunities for investors. Ten farming blocks have been identified (one in each province).
‘’The Nansanga Farming Block in Serenje, central Zambia, is the most advanced, with roads constructed and power connected. We have already allocated pieces of land to small-scale and commercial farmers. We are in the process of awarding 10 000 hectares of land to what is referred to as a core venture,’’ Minister of Agriculture, Given Lubinda said.
Zambia’s future indeed lies in agriculture and President Lungu’s administration has emphasized its determination to pursue an agriculture-led economy through the rolling out of irrigation schemes and other innovations throughout the country.
Speaking during the launch of the construction of the $28 million Mwomboshi Irrigation Dam in Chisamba, central Zambia recently, President Lungu reiterated his commitment to diversifying the agricultural sector.
‘’The construction of this dam gives a practical expression of my Government’s resolve to put agriculture at the centre of our economy. Irrigation farming is an act of diversifying the sector away from rain-fed agriculture, President Lungu said.
Currently, the construction of dams is underway in Lusitu (Chirundu) and Musakashi in Mufulira district.
‘’We aim to have over 75,000 hectares by 2030. To achieve this, Government will ensure adequate funds for irrigation development annually. Currently, K56.7 million has been set aside for irrigation in the 2016 national budget,’’ he pointed out.
Key players in Zambian agribusiness
These include, inter alia, Zambeef Products, Zambia Sugar and the Zambia Breweries Group, a subsidiary of South African giant SABMiller, one of the world’s largest beer manufacturers.
Zambia must take action to invest in industrialization in order to be competitive and take advantage of the business opportunities in the region, Zambeef Joint Chief Executive Officer Dr Carl Irwin told delegates at the fifth Zambian International Investment Forum (ZIIF) this week.
“Zambeef strongly believes in Zambia’s potential to feed itself and the region given its abundant resources; good soils, climate, readily available as well as the ability to produce most crops given the right investment. But only in adding value to our produce can we fully realise the sector’s full potential,” said Dr Irwin, who was speaking at the opening of the high-level conference, which was officially launched by H.E. the President, on. Edgar Chagwa Lungu and attended by Minister of Commerce, Trade and Industry Hon. Margaret Mwanakatwe.
Dr Irwin highlighted some of the benefits of focusing on value adding operations and the opportunities presented for the national economy; increased national food security, social development in rural areas, job creation, and tax and duty generated as result.
Zambeef alone has generated US$220 million in revenue for the financial year 2015 and US$38 million of foreign exchange income for the nation; invested more than US$150 million in the last eight years; employed more than 6,000 staff and contributed US$18 million in tax and duty paid to the Zambian government
Margins in both the regional and EU export markets are expected to remain under pressure from surplus sugar stocks on the world market. Realization in these markets will continue to be influenced by exchange rate movements.
Zambian Breweries and National Breweries are among the largest buyers of maize, barley, cassava and sorghum in the country.
The group purchases a significant quantity of raw materials locally. A total of 40,000 tonnes of maize is bought from small-scale farmers for use in the production of opaque and clear beer.
The group has engaged close to commercial farmers in the growing of barley, with a planned annual uptake of 12,,000 tonnes. In 2015, two small-scale barley outgrower pilot programmes have been introduce with a view to further expansion
More than 10,000 tonnes of sugar were consumed towards the manufacture of non-alcoholic drinks.
A further 1,750 tonnes of sorghum was used in the production of its affordable Eagle lager, with a direct impact on 3,500 households in the year to March 31, 2015.
From 2015, the company introduced cassava into its Eagle lager formula. It is now developing an end-to-end supply chain supporting small-scale farmers in Northern and Luapula provinces, and with innovative technology will deliver a high quality, affordable clear beer that will grow to become a leading brand within the company’s portfolio.
Zambia’s agriculture is on the rise and is changing many lives in various corners of the country.
As the Ministry of Agriculture rightfully acknowledged: ‘’Agriculture is the only sector that assuredly alleviates poverty in the country. The focus is to grow this industry that is the future of the country.’’
“After the training, I realized that I had taken for granted my livestock over the years. If only I knew some of the things I know now, I would have benefited a lot from my livestock then.”
FFS Facilitator, K-SALES Project
Francis Mwika, Mugae Location, Meru County, Kenya
Located on the eastern side of Meru County, Mugae location is characterized by a sparse population with low and erratic rainfall resulting in an increase in food insecurity, environmental degradation and poverty levels in the county. Massive wind storms carry away the soil from the bare land making agriculture a debatable investment. This however, is home to Francis Mwika, a 47-year-old livestock farmer. Mwika has witnessed crop failures and droughts over the years. He has had to find a way to mitigate the drought effects for the wellbeing of his family of one wife and eight children. He resorted to livestock farming as a source of income. The amount he earned from his sales was used to pay school fees for his children and provide basic household needs, leaving little, if any, for savings. He had not realized the full potential of livestock farming as a business up until he was selected to be a facilitator for Farmer Field Schools (FFSs).
With funding from the U.S. Department of Agriculture, Mwika received training as a FFSs facilitator through the Kenya Semi-Arid Enhancement Support (K-SALES) project. The four-year project, implemented by Land O’Lakes International Development, seeks to increase agricultural productivity and expand trade in livestock products. Through K-SALES, Mwika was equipped with the necessary knowledge to train other farmers in the FFSs on farm management and improved livestock production techniques. Mwika has formed and trained over 10 FFSs in his area comprising of 384 farmers.
“After the training, I realized that I had taken for granted my livestock over the years. If only I knew some of the things I know now, I would have benefited a lot from my livestock then,” he says. As luck would have it, Mwika, had a chance to invest in his livestock for business. “I had to make some changes in my own home on how I reared my livestock in order to set an example to the farmers I trained.”
Mwika is one of the 150 farmers benefiting from Maji ya Chumvi spraying and vaccination crush, which is less than 2km away and was constructed by K-SALES. “Before the training, we never used to spray or vaccinate our animals unless they fell sick. We are very grateful for the crush constructed by K-SALES for our community, as we can now spray and vaccinate our animals regularly with ease.” Currently, Mwika sprays his livestock at least thrice every month and noted the minimized illnesses brought about by pests and diseases.
He has embraced several lessons to help improve his livestock in terms of breeding. Last year, in order to upgrade his own local sheep, he bought an improved sheep breed, a dorper, which is hardy, fertile and fast-growing. The ewe has since given birth to lambs that are growing rather fast and fetching a higher price at the market. “Just last month, I fetched 3,000 shillings for a one-month-old lamb,” he stated. From these sales, Mwika has since acknowledged that livestock rearing is indeed rewarding, and he plans to increase the number of sheep he owns, adding that they can reproduce as often as three times in a year.
With the dry season around the corner, Mwika has plans to pursue fodder storage as a business especially now that there is a looming food shortage in his area. He had recently stashed fodder for his own animals, but he sold it to another livestock farmer. “I knew fodder could earn me an income but not this much,” he says. “The quantity of the fodder wasn’t much but the buyer surprisingly paid 20,000 shillings for it. I was amazed, and that is when I realized there is a lot of potential in the hay business.” He also received training on financial literacy and plans to borrow a loan from Centenary Sacco, where he is an active member, to enable him to construct a proper hay barn to store his hay for sale.
Mwika is one fortunate farmer that is headed in the right direction. However, not many people in Kenya are as fortunate as Mwika. They lack access to the required information to scale up from subsistence farming to commercial farming. By providing the required knowledge in improved livestock production techniques and technologies, more farmers can see the benefits of keeping livestock as a business venture.
This story is brought to you by USDA and Land O’Lakes
For media and advertising inquired contact Alexander Hitzemann at email@example.com
A farmer walks through his field. Sugar cane yields and sucrose in cane are expected to remain relatively unchanged in the 2016/17 production season.
By Nawa Mutumweno
Zambia Sugar Company is reducing its sugar exports into the European Union (EU) to the regional market in view of the sugar reforms in the bloc to be effected in September 2017.
The agribusiness company will this year reduce sales to the EU from 22 percent to 14 percent as it explores Africa’s regional markets, both traditional and new markets.
According to managing director, Rebecca Katowa, this follows the sugar reforms that have impacted on the sugar regime and resulted in prices in the EU converging into global prices.
The prices are below the cost of production and reflect residual markets and key players, namely Brazil, Thailand and India, who put sugar on that market with India’s sugar being subsidized.
’’The strategy is to move volumes away from the EU to regional markets because the regional market provides valuable alternatives. Shifting export sales away from the EU to the region is expected because realisations in these markets will continue to be influenced by exchange rate movements,’’ she elaborated at a stakeholders’ breakfast meeting in Lusaka recently.
The prices of sugar are expected to remain above world levels within the region despite increasing levels of competition among regional producers, Mrs. Katowa added.
The company is looking to expanding exports to the Great Lakes region and the Democratic Republic of Congo (DRC), among other African markets.
Meanwhile, Zambia Sugar will this month-end commission the over K500 million refinery which is projected to more than double sugar production to 90 000 tonnes annually, reaffirming the firm’s position as the largest producer in Africa.
Currently, the sugar agribusiness company produces 40 000 tonnes of sugar per annum.
‘’The project was launched last year and will be on stream at the end of the month and contribute to our growth strategy,’’ she said.
Meanwhile, the company’s Commentary for the Year Ended March 31, 2016 says a number of factors impacted adversely on sugar production in the period under review. These included dry climatic conditions in November and December 2015, power interruptions to irrigation and the outbreak of yellow sugarcane aphids which reduced sugarcane yields by 11 percent across the entire harvest area.
This yield decline was partly offset by a 2 percent increase in area under cane delivered. Smallholder schemes supplied 10 percent of the total 3.102 million tons of cane crushed by the Nakambala mill. Consequently, sugar made was reduced by 10 percent from 424 000 tonnes achieved last year to 380 400 tonnes.
‘’The reduced sucrose in cane was partially offset by improved sugar recoveries in the mill. Refined sugar production also increased to meet growing demand. The season saw a significant improvement in factory throughput, reflecting the benefit of improved equipment reliability and preventive maintenance practices together with a sustained focus on continuous improvement initiatives,’’ the Commentary reads in part.
Total revenue grew by 6 percent year on year, from K1.91 billion to K2.02 billion, largely due to continued growth in the domestic market where direct consumption increased by 7 percent and industrial consumption grew by 4 percent. In order to maximize revenues from reduced production, the sales mix was adjusted by reducing bulk EU exports by 45 percent. The remaining sugar was sold into Africa’s regional markets where prices remained under pressure from world market sugar.
The factory commenced crushing in the third week of April and operations have quickly stabilized. Early season, sugarcane yields are at expected levels and should improve as the crop matures.
Sugar cane yields and sucrose in cane are expected to remain relatively unchanged in the 2016/17 production season. The crop has been negatively affected by drought conditions, power shortages, the low water levels in the Kafue River and pest infestations due to drought stressed cane. Production is, therefore, expected to match the previous season.
Sugar production is, therefore, expected to match the previous season. Reasonably strong growth is expected in the local market. However, margins in the regional export markets are expected to remain under pressure from surplus sugar stocks on the world market.
‘’Realizations in these export markets will continue to be influenced by exchange rate movements. The new expanded sugar refinery will help the company take advantage of the growth in the local and regional industrial sugar markets,’’ it adds.
By Alexander Hitzemann
Private and public sector working together – this is how the much anticipated, upcoming outdoor agricultural show, Agritech Expo Tanzania, taking place in Arusha from 26-27 January is described by the local agricultural sector in the country.
The inaugural farming B2B platform, which already enjoys strong support by the farming community, will not only gather farmers, from commercial to emerging and small scale; but also key officials from regional governments, agro associations, NGOs, aid, development and research agencies; agro dealers, traders and retailers; suppliers, consultants and technical experts as well as venture capitalists, investors and bankers.
“The role of private sector is highly recognised in the agricultural policy, strategies and programmes” says Dr David Nyange, Policy Advisor to the Ministry of Agriculture, Livestock and Fisheries in Tanzania, a supporting partner of the upcoming Agritech Expo Tanzania.
He adds: “as industrialisation is at the top of the current development agenda, the technologies that will be displayed at the Expo have potential to play a great role toward the commercialisation of agriculture which is necessary for ensuring sustainable supply of raw materials to the industry”.
Other host partners for the event are the Agriculture Council of Tanzania (ACT), the Tanzanian Horticulture Association (TAHA), the Southern Agricultural Corridor of Tanzania (SAGCOT) and the Selian Agricultural Research Institute (SARI) in Arusha.
Agri suppliers supporting Agritech Expo
The industry has responded with great enthusiasm to the first Agritech Expo in Tanzania.
Global farming equipment leader John Deere and its distributor in the country, LonAgro Tanzania Ltd, are gold sponsors for the event. Says Lukas Botha, Managing Director, LonAgro Tanzania: “from land and seed bed preparation, through to crop care and harvesting, LonAgro John Deere in Tanzania has the complete solution.”
“The horticultural sector is an awakening giant” says Harald Peeters, MD Tanzania of the vegetable breeding company Rijk Zwaan Q-Sem, a bronze sponsor at Agritech Expo. He adds: “Tanzania has plenty of land, enough water and year round sunlight. I am looking forward to an Expo which raises the awareness of the Government to the fact that the private sector is a partner in development, creating thousands of jobs, educa ting workers and building the nation”.
Other leading agri suppliers that have already confirmed their presence at the event include Afrivet, Ford, CMC Automobiles, Hughes Motors, Maji, HortiPro, Irrico, Rivulis, AMDT, FNB, Lindsay Africa, Balton, Kibo Seed, Neptun Boot and TFSC.
The Agritech Expo success story
The success story of the outdoor agricultural show, Agritech Expo, which is about to expand to Tanzania, started in the Zambian agri-hub of Chisamba three years ago and has been a tremendous boost for that country’s farming sector. The inaugural Agritech Expo Tanzania has transitioned from the Agribusiness Congress conference that has taken place in Dar es Salaam for the last three years.
Agritech Expo Zambia in 2016 drew a record-breaking attendance of 17 605 visitors and 160 exhibitors over 70 000 sqm of space. The three-day expo also featured two international pavilions, from Germany and Zimbabwe, welcomed two agriculture ministers, from Zambia and the Czech Republic, and the Zambian President H.E Edgar Lungu officially opened the show.
“We at John Deere have been attending and exhibiting at this event since its inception three years ago and are pleased to see the progress that the organisers are making in growing this event and reaching all those concerned with agriculture from government to small scale farmers” says Kevin Lesser, Global Marketing Director, John Deere, Kenya, adding: “we fully support the direction of growth intended for this event in Tanzania. We look forward to next year’s event”.
Event dates and location:
Exhibition: 26-27 January 2017
Commercial Farmers’ Focus Day: 26 January 2017
Venue: Selian Agricultural Research Institute, Arusha/Dodoma Main Road, Arusha
Linkedin: Agritech Expo
Senior communications manager: Annemarie Roodbol
Telephone: +27 21 700 3558
Mobile: +27 82 562 7844
“Up skilling for farmers to become agripreneurs”
There is great excitement in the agricultural sector in Uganda as preparations are underway for the fourth Agribusiness Congress East Africa conference that is taking place in Kampala from 29-30 November. It is the first time that the event is taking place in Uganda.
Agribusiness Congress East Africa is a regional platform for discussions and knowledge sharing, to address those pertinent issues which are preventing the East African agricultural industry from truly flourishing as a global agribusiness hub.
Already the farming sector is showing great support. The Grain Council of Uganda (TGCU)’s Board Vice Chairman, Robert Mwanje, says the body “is delighted to partner, support and host the fourth annual Agribusiness Congress East Africa. The success of the event in the East African region has given the Grain Council of Uganda the confidence to host the upcoming edition in Uganda, setting it as a key entrant into the national annual calendar. The Congress strives to set progressive action for the commercialisation of the industry by exchanging knowledge, best practices and dynamic conversations whilst showcasing leading agri technology to highlight the right tools for East Africa’s agri sector.”
Other industry organisations that are official partners include the East African Chamber of Commerce, Industry and Agriculture (EACCIA), National Agricultural Research Organisation (NARO), Uganda Investment Authority (UIA), Uganda National Farmers Federation (UNFFE), Uganda Seed Trade Association (USTA) and Agricona.
“Moving the Agribusiness Congress East Africa to Uganda will once again extend the opportunity to set the spotlight on the rapid expansion of the agriculture industries within East Africa,” says Jon McLea, Director of Agricona, “and fuelled by peaceful elections, unregulated markets and fertile lands – will make the pearl of Africa a hot spot for agribusiness investments.”
Farmers to become agripreneurs
“We are just as excited about organising Agribusiness Congress East Africa in Uganda this year”, says event director Yolanda dos Santos, “and we look forward to bringing together national, regional and international commercial farmers, donors, stakeholders, investors, policy advisors, commodity traders and industry professionals. Through the programme we aim to enhance commercial activities, enable commodity trade, sustainability, empower youth and women, encourage up skilling and provide market accessibility to the East African agricultural corridors. We will also feature the leading technologies through a product showcase to highlight the right tools for East Africa’s commercial agricultural arena.”
She adds: “we all know there is great potential in the agri arena, including for commercialisation and the up skilling for an entrepreneurial mind-set amongst all-scale farmers to become agripreneurs, using technology and training programmes. Agriculture can generate huge opportunities for financial access and investment in the region and now is the time to set action to strategic plans unlocking the potential.”
- Market access through treaties and agreements: Uganda is part of the free trade areas of EAC, COMESA and SADC.
- Uganda is a signatory to major international investment and business protocols.
- Totally liberalised foreign exchange regime.
- Uganda has a population of 35 million people with a growing middle-income class with reasonable expendable income.
Well-known agri suppliers Engsol, Mascor, John Deere and Chief Industries have already signed up as event sponsors.
Agribusiness Congress East Africa will offer market access to more than 200 million people through Kenya, Ethiopia, Uganda, Rwanda, Burundi, Tanzania and South Sudan. Agriculture accounts for almost 30% of GDP in East African countries while staple foods represent 75% of total agricultural products traded. Agriculture employs more than 60% of the population in the region.
The event is organised by Spintelligent, a well-known trade conference and expo organiser on the continent, with particular expertise and experience in energy, infrastructure and agricultural development events; including the long-running flagship shows such as Agritech Expo Zambia, the East African Power Industry Convention in Nairobi and African Utility Week in Cape Town.
Agribusiness Congress East Africa dates and location:
Conference: 29-30 November 2016
Event location: Kampala Serena Hotel, Kampala, Uganda
Facebook: Agribusiness Congress East Africa
Dr, Musheshe, Co-Founder of URDT and African Rural University
The drive is six hours from Kampala to African Rural University, Uganda’s first all-women’s university. As in many African cities, Kampala’s congested city center gives way to surrounding slums inhabited, in large part, by previously rural residents who have left their villages for the city in hopes of finding work. Often, they’ve moved only to find their hopes of prosperity starkly juxtaposed with the realities of urban slum existence. The road must be traversed by Land Cruiser. The University’s founder, Dr. Musheshe, our wonderful driver, Edward, and I left in the early afternoon, driving at maximum speed, and arrived at around eight in the evening in the pouring rain.
Kigadi is located in one of Uganda’s poorest districts, evident in the deeply rutted roads long forgotten by the local authorities. Here is the home of newly minted African Rural University, officially awarded its higher education licensure in 2011. It is a part of the Ugandan Rural Development Training Centre (URDT), which started in 1987 as a nonprofit working with local communities on agricultural training and extension services and later expanded to include URDT girl’s school in 2000, which began with thirty students. It has expanded to an institution of more than three hundred. The University will be graduating its second ARU class this year. All University graduates receive certification to become Rural Transformation Specialists, immediately to be employed by ARU as Epicenter Managers. As Epicenter Managers they will live full-time in assigned communities, serving as rural development field officers facilitating strategic planning and community development emphasizing agriculture.
Safira (right) and her mother (left) with their car
When you pull off Hoima Road, which is strewn with trash and brimming with honking cars, motorbikes, bicycles, you find a campus with the same feel as a UK or US university. The campus roads are dirt but the hedges are neatly trimmed. The small roundabout in front of the main building has manicured hedges that spell out URDT from above. Smartly dressed students carry their books with purpose and attention.
URDT’s motto is “to awaken the sleeping genius in each of us,” rooted in the idea that each of us has the capacity to envision and create the life we desire for ourselves, our families and communities, and our country.
I’ve worked in rural development for the past few years and have heard much of URDT’s success. In June, I interviewed Dr. Musheshe for Africa Agribusiness Magazine; he was in Boston receiving an award from Harvard University for his creation of URDT and ARU. “Come to see for yourself,” he said at the end of the interview. A month later, I found myself on the tarmac of Entebbe airport.
The Ugandan Rural Development Training Centre thrives remarkably in one of the world’s poorest countries. Important factors are: its visionary founder, Dr. Musheshe, the loyal community that works with him, and the employment of systems-thinking as an approach to human development.
The University is based on a simple, powerful way of thinking called the Visionary Approach. A series of questions provides a structure for achieving personal and community development. What do you want? What is your current reality in life? What are the action steps you need in skill level and education? What resources do you need to mobilize in order to move efficiently toward making your vision reality? Simple, not easy. This way of thinking has powerful effects. It moves people away from problem solving, getting rid of what you don’t want, toward creating what you do want. It is extremely empowering because implicitly it says to each of us, “You have the capacity, intelligence and creativity to make what you want a reality. Not only can you create the life you desire, but you are the active agent in your own development and future.” Each student has this mentality engrained in her everyday thinking.
One evening, as I sat on my stoop watching some girls play volleyball, a group of girls asked me how I was liking Uganda and URDT. We chatted for a few minutes about the universal questions: “Do you have a boyfriend? Is he handsome? Can we see a picture?” Laughing, I say, “Yes, yes, and yes.” “Why aren’t you married yet? You ARE 26!” The questions continue unrelentingly, but I’m happy to fire a few back: “What is URDT like?”
One young woman speaks up, “URDT has taught me to be honest about what I want, not what I think I can have. I want to build houses and be an engineer, so I take math, and physics.”
Another girls said, “URDT is about envisioning not just what you want, but what you want for your family. We are just about to finish up our permanent house which will be made of bricks, not mud. I created a plan with them on how we would achieve this. We’re close.”
A few days later I arrange a session with six school girls of different ages to learn more about how URDT is affecting their lives. They echo one another. “URDT is teaching us to envision what we want, have confidence that we can achieve it, and be clear about the skills we need to achieve these goals.”
ImageMost girls I asked will say they are working with their families to expand agricultural businesses, build permanent houses, send their siblings to school or start more businesses within the family. Students at URDT can articulate the purpose of their education and its direct relationship to their lives outside of school.
Sitting in the morning assembly, after listening to the lilting voices of the national anthem, I realized that the second song that they sang was the African Rural University Anthem, sung by the entire community, every day. It goes like this…..
African Rural University
The Cradle of learning
African Rural University
The centre for transforming
You educate a woman
Uganda to be prosperous
You educate a woman
Africa to be at peace
You educate a woman
The world to be free
You educate a woman
Humanity to be happy
You have a vision
That is inspiring
You have a mission
That is empowering
They come from the East
They come from the South
They come from the West
They come from the North
To drink on the well of wisdom
Every day this Anthem reminds everyone how important women’s education is to the future: to the future of Kigadi, to the future of Uganda.
A report by Ugandan Human Services and international agencies shows that that over half of women in Uganda experience domestic violence, compared to the global average of 30%. In Uganda, like many African countries girls are pulled out of school to get married and/or because scarce family resources are used for boys to be educated. URDT girls school starts at primary five (around age nine) specifically to target girls who would likely otherwise leave school at this age.
Signs adorning the roadside say, “Beating my wife destroyed my marriage. Don’t do what I did.” and “Domestic violence is a criminal offense.” While “stay in school” plaques decorate high school lawns. But when I spoke with Michael Newbill, the Economic and Political Chief at the US embassy he noted, “Yes, these signs are important. Remember, though many are funded by international donors.” I wondered, if these are not locally inspired are these messages really taking root in Ugandan society? Patriarchy is a way of life here and women’s rights will not be achieved in any real way without a prolonged struggle. Needless to say supporting women’s education is hardly a top priority for many.
In the shade of a eucalyptus tree, Charlotte, an Epicenter Manager, sets up her “power point” presentation, a dowel wrapped in fabric with the facilitation “slides” she uses in villages. Charlotte was assigned to work in Kasambya subcounty after graduation. Earlier, in her third year at the University, she lived for a month in the village, working to understand the local challenges. She took this knowledge back to ARU to develop her research and skills before moving to the village after graduation. Each slide is drawn as well as written because of both the high illiteracy rate and the large number of local languages. Below are a few of the nineteen slides in her presentation.
URDT Rural Development Curriculum
“Know what you want: When you know what you want you gain great power”
“Foundation Choice: the three foundations for a happy life are freedom, health and being true to one’s self”
“The first act of creation is to imagine what you truly want”
“Remember your inner power will work like a sharp spear to get what you want. But you must direct it very clearly and firmly (focus).”
“In times of difficulty, tell yourself the truth of how things are and what you truly want”
“Reflect upon the water project as if it were accomplished”
“Anything which is truly important to you in your life is worthy of your life energy”
“Creating momentum. Nothing happens until you take action. There is often a delay between the time you do something new and you see results.”
“Point of most power. You create tomorrow today. Right now is the key to your future.”
I’m touched by the simple genius of the curriculum, which is like a condensed version of every self-help book, motivational course, and strategic planning workshop I had ever taken – no small number. Over thirty years, these slides have been honed by Dr. Musheshe, alongside Peter Senge, a top systems thinker at MIT, and Robert Fritz, an award-winning artist, author and leading professional in corporate change management. These are no ordinary “slides.”
To see the outcomes of this approach, we drive two hours to Safira’s house. We turn off the main road, a narrow track with high elephant grass squeezing the Land Cruiser, onto a shaded driveway that passes through a large grove of matoke, Ugandan bananas. This matoke is now part of the thirty acres Safira’s family owns. Before she entered URDT, her family of eight lived on a quarter-acre.
Safira is the first in her family to attend school. Her father beams with pride as he tells me, “Now all five children are in school.” When I ask Safira’s mother how URDT affected the family, she turns to the interpreter, “I never had an education. I dropped out in primary four, but when I attended parent visitor days I realized I wanted to go back to school. Now I have my high school degree just like my daughters.” She beams at me, and I wish I spoke the local dialect to tell her much I admire her and her family, but Charles, our excellent interpreter and radio manager, does the job.
I ask them, “How did you go from a quarter-acre to thirty acres? That’s a big farm!” Safira, now 24, says, “Well, all students at URDT have to do what we call a Back Home Project. We learn in school and then we have a project we implement at home. It is part of our education to work on a vision with our family. We have family meetings and develop a vision together, then we decide what each member will do to make this vision a reality. We kept our vision on a piece of paper near the kitchen table. Our vision was to have a permanent house and have everybody go to high school. With the agricultural and management skills I learned at URDT we were able to grow a variety of crops to sell at the market. Now we have expanded into other business such as mechanics and are working to open a pharmacy. Now all the children are in school, we have a large farm and a car, and are looking to buy more land. The Safira story epitomizes the Back Home Projects at work, radically changing family life and opportunities for the next generation.
I think to myself, “I wish my family could have such a clear vision!”
Similar to Safira’s story is that of Charles Kisembo Goodyear, a student at URDT Institute, the only area of the organization that enrolls boys. Charles’s neat house resembles the URDT campus. Meticulously maintained hedges ring the house, and the dirt yard is swept clean. Charles is a savvy entrepreneur and equally skilled farmer. On the tour of his farm, he explains in minute detail the intricacies of biodynamic farming, the expansion of his passion fruit crop, and his steadily growing swine business. With direct enthusiasm, he says, “I have started farmer’s cooperatives and groups in this area to teach others the best practices I learned at URDT.” He, like Safira, is spreading the word through his commitment to his business and family, and also through his strong “pay it forward mentality.” To list his bustling farm’s activities would require a lengthy case study; in short, he is adding value to sugarcane using machinery he designed and built in his URDT metalworking classes. Additionally, he has extensive mango groves, and even transports his produce to Juba, South Sudan, to fetch premium prices. No grass grows under his or his lively wife’s feet. His manner and speech resemble that of a TEDster delivering the classic eighteen-minute talk in Monterrey California.
Dr. Musheshe is a leader with awesome vision and crystal clear purpose who embodies the values he instills in his students. URDT and ARU are products of his vision and his committed team of educators, who put their hearts and souls into maintaining and growing these schools. “I’ve always been an activist at heart,” he says. He was tortured as a political prisoner under Idi Amin for being a leader of student protests while at Makerere University. Later, an attempt was made on his life by a grenade thrown into his house. He says, “I might not have started the URDT if that hadn’t happened. It had the opposite effect they wanted. It made me determined to stay in my country and help my people forever. Uganda has come so far. Back then it was a very violent place.” He has received prestigious awards across the globe for his achievements, as well as the Golden Jubilee Medal from the President of Uganda for the creation of African Rural University.
URDT’s programs and activities range from a burgeoning TV station and exchange students from the US, to a long-standing and award-winning community radio station. The radio station, broadcast to over three million listeners in Western Uganda and the Eastern Democratic Republic of Congo, is particularly impressive. One evening over a Nile Special, the local Ugandan sorghum beer, Dr. Musheshe told me its story.
“I attended the Rio Earth Summit in Brazil in 1987, the first global summit on climate change. When I returned to Uganda I wanted to start a radio station along with four other countries. We called it Eco News Africa. The idea was to combat desertification in Uganda. When I told this to a UN Development professional the man laughed uproariously, “We don’t have desertification in Uganda. Are you kidding me?” I said, “Yes, that’s the point. We don’t have desertification YET, but if we don’t provide education on deforestation and environmental protection measures we will in twenty years.” Now twenty years later, western Uganda, where URDT is located, sees few issues with desertification. The same cannot be said of Northern Uganda.
The radio station is wildly popular in the community. After a breakfast of matoke and coffee deliciously prepared by Kadija, the cook and mother of everybody at URDT, we bundled into the land cruiser to visit a “farmers’ listener group” that convenes weekly to listen to the agricultural program broadcasting up-to-date research, technologies, and market data, all of which help them to improve their farms. For half an hour, farmers introduced themselves to me through Charles, the radio manager and my translator. Their testimonies tell not only many challenges, but a deep sense of appreciation for the radio station that provides them with information that they could not be accessed otherwise.
I asked the farmers how they communicate to the station the topics they need the program to cover. They point to Catherine, Kyanaisoke subcounty’s Epicenter Manager who is standing quietly to the side of the group. “She comes to our meetings, plus she is around. We tell her and she lets the station know. Sometimes people from the station come to us.” The feedback system works: there is currently a mango blight, and next week’s program is on prevention methods.
After a week at URDT I accompanied an economics Lecturer, Emmanuel Sunday, on a recruiting trip for the University. We were recruiting at high schools in Kibale district, near the border of Rwanda, a nine hour drive south through Queen Elizabeth Park. We went to three high schools, where each headmaster kindly rallied the students to hear Professor Sunday explain ARU’s mission of developing women leaders who will focus on rural transformation in Uganda. Each time Professor Sunday noted the University is for women, and women only, there was a considerable stir in the room followed by a young man asking, “Why is this place only for women?” The answer: “Women are essential to changing society because they effect the family. Unfortunately girls are often taken out of school early, before boys, and therefore do not gain the knowledge and skills to positively affect their families and communities. Women interact with the family more than anybody else. When you teach them about nutrition, health, and economics, they are a good investment for uplifting the family. When you educate a woman, you educate her family.”
In each school, the teachers and headmasters knew of URDT, and particularly they knew of Musheshe. Their eyes showed deep respect. One headmaster put it so succinctly that I scrambled for a pen and a piece of crumpled paper: “If we had a hundred URDT’s, Uganda would be just fine.”
As the African Rural University Anthem says, people come from the North, South, East and West of Uganda to URDT to “drink on the well of wisdom.” This is a bright light in a country whose 32 million people are hampered by high HIV, unemployment, a particularly violent history, and low development levels. URDT is a rock causing ripples that spread further and further each year. These ripples make their way into every valley and every mud hut, to families who dream of having a brick home with neat hedges. URDT is changing Uganda one mind at a time through the dedication of Dr. Musheshe’s vision.
Interview with James Mwangi – Group Managing Director and Group CEO of the Equity Group Holdings Limited, the banking conglomerate with the largest customer base in Africa and the largest African majority owned company in the region. James Mwangi won the 2012 Ernst & Young World Entrepreneur of the Year, the first business leader from Sub Saharan Africa to win this prestigious award.
by Dave Ramaswamy
Dave: How is Equity Bank helping farmers with credit?
James: Supporting farmers goes beyond credit. The biggest need for farmers is building capacity so they are able to, and can, learn to use credit appropriately. The second significant opportunity to support farmers is to build linkages. It is not just about production, it is linking farmers with the market, linking them with post-harvest produce managers. For Equity Bank our goal is to ensure farmers are fully funded. Over the last 6 years we have been able to support through credit, 460,000 peasant farmers to progress from subsistence farming and graduate to being agribusinesses. We give them financial training so that they see agriculture as a business – for sustainability and scalability. We have introduced warehousing in Kenya so farmers are not forced to sell all their production at the time of harvest. They can go to a produce manager, get a Warehouse Receipt. Farmers can discount that, and can get a credit against that Warehouse Receipt.
In a partnership with the Alliance for a Green Revolution in Africa (AGRA) and the Kenyan government, we are helping farmers adopt modern agriculture practices, including appropriate use of fertilizers and certified seeds. In some cases, we have helped farmers increase their yields up to 12 times.
Dave: What are the key areas for improving agricultural efficiency?
James: If Agriculture in Africa needs to move to the next level, there must be significant enhancement in 1) productivity 2) quality and 3) value addition. This is our greatest opportunity. We can do this with technology, either through software or hardware. And we must ensure that increases in the above 3 elements – productivity, quality and value addition can be obtained through optimal use of additional inputs.
Dave: What are your key messages to investors? In Kenya? East Africa?
James: Kenya and East Africa is an agricultural region. So, the raw material is plentiful. If they want to have impact, agriculture is the sector to invest in because you can positively affect the lives of 85% of the population. The agriculture sector in East Africa is still at the primary production level. And it is crying out for enhancement to the value addition level. Agro processing is a huge, huge opportunity. And the market is ready and waiting in East Africa.
Dave: Africa is food insecure because it is energy insecure. In many areas, 10% to 30% of crop output is wasted because the output cannot be stored under controlled temperature/humidity conditions, or processed quickly enough. How can the U.S. backed Power Africa energy investments help transform the agriculture sector?
James: The modern world is driven by and rotates on the strength of energy. For African agriculture to transform we need significant energy. We need to mechanize agriculture. Mechanization provides an opportunity for energy utilization. Agro processing will be a huge consumer of energy. For instance, transporting produce efficiently, requires electrified railways. The core of development, the enabler and facilitator of any agricultural transformation is availability of energy. When farmers milk their cows in the evening, and if they cannot finish and have to deliver it the next day, the milk needs to be stored and chilled overnight in coolers. Coolers will only work if a farmer has access to energy. So, you can see the correlation. For example, if you want to properly implement a “zero grazing” dairy system, you need to automate the feeding process and the milking process within the dairy farm. Both of which require access to a reliable source of energy. So, essentially food security and energy security go together.
Dave: Kenya and East Africa needs billions of dollars to upgrade and build new infrastructure for agriculture transformation. Infrastructure investments are long-term plays with delayed payback periods, e.g. 30 to 40 years for roads, railways etc. So, you need to mop up pension fund capital, family office capital with long investment horizons. How do you see Equity Bank partnering with foreign entities to tap into these capital pools?
James: In East Africa, we need to push more to deepen and widen our capital markets. You’re spot on – what we need for infrastructure is long-term funding and long-term capital. The capital markets are best-positioned for this. Banks can serve a facilitation role to ensure that capital flows for the long-term, particularly to the consumers of that capital. To identify and vet the recipients of that capital – that is where Equity Bank can play a significant role. We are playing a role of being a bridge between long-term funders, whether it is the development finance institutions or pension funds, and the borrower. So, far we have received a $1 billion dollars for onward lending for a term of 7 to 15 years. So, that is the bridge role we are playing.
Dave: James, thanks a lot for your time. Wish you continued success!
James: You’re most welcome.
By Jennifer Hyman
Communications Director, Land O’Lakes International Development
Crushing poverty used to be so immense for Workitu Tola and her husband Chala Gemechu that they did the unthinkable: they arranged for three of their children to leave their home and become daily laborers on other people’s farms.
“It was the most horrible decision we ever had to make, but we didn’t have enough food to regularly feed, let alone clothe them,” Workitu mournfully explained. “What little we earned went in full to pay for a place to stay. Outside our home, they’d at least be able to eat something, and we had a better chance of providing sustenance to our youngest.”
In fact, for many years, the family had no real place to call home. As daily laborers, the entire family constantly migrated from place to place looking for whatever work they could find – typically the most grueling and menial labor. Any limited earnings they made went back to the employer for the privilege of having somewhere to sleep.
Eventually, the desperate moment came when Workitu and Chala realized they could not continue to care for all six of their eight children who still lived at home, and they arranged for three of the eldest, who are now 11-year-old twins and an 18-year-old, to begin doing similar daily labor on properties that would guarantee them food and a place to sleep.
But, as a result of the extraordinary nutrition and livelihoods improvements the family has experienced over the past several years as clients of the USAID-funded ENGINE program, they finally have a huge home of their own, and are in the process of reuniting the entire family.
Empowering New Generations to Improve Nutrition and Economic Opportunities (ENGINE) is a five-year program funded by the U.S. Agency for International Development under Feed the Future and led by Save the Children that is working to reduce maternal, newborn and child mortality by improving the nutritional status of vulnerable women of childbearing age, and children in their first thousand days of life.
Land O’Lakes International Development is leading ENGINE’s efforts to develop catalytic nutrition-sensitive livelihoods that can enrich access to nutritious foods for families like Workitu’s and lift them out of poverty, by providing resources and training to produce enough nutritious food to eat and sell for a sustainable livelihood on their own land.
The program provided her with six basic farming implements and six types of nutritious seeds – carrots, kale, Swiss chard, head cabbage, beet root and an apple seedling – and trained her on how to plant, harvest and prepare them. A year later, she received three sheep and a ram – along with training on animal husbandry – and she began selling their offspring.
After harvesting sufficient crops for the family, they sold the excess at market for 2,500 birr, (US $118) and got additional income from selling four of their lamb offspring. With that cash in hand, they bought a plot of land for 7,000 birr (US $331). In just one year, Chala built their spotless, expansive home, all by himself.
“In all my life, I never thought I’d own sheep, goats or chickens – let alone a cow! We are now on our fourth year of eating a diversified diet, and selling the extra after we ensure our family eats properly,” Workitu exclaimed.
The family is now eating at least 3 meals a day, every day, combining their injera bread with combinations of vegetables, meat and eggs. “My most recent pregnancy was different. I didn’t have a single headache, and I produced so much milk he couldn’t even finish it,” she noted, adding, “What’s more, his mental capacity is different than the others. He’s very active and bright, while the others look short for their age and are lower in energy.”
Her husband Chala’s confidence has grown, too. “Now that I can provide my family with a home, I feel like a man.
It broke Adegdigu Kassa’s heart when she had to pull her children out of class years back to help her with her arduous work as a daily laborer, but she simply couldn’t afford to pay for the clothes and books they’d need to attend school.
“I was considered the poorest person in my community of 30 families,” she explained. “But I promised them that as soon as I got some money, they’d go back.” At the time, she had a young baby, who she’d tie to her back as she did her work, along with 7 and 11-year-olds, who helped her with her work as much as they could.
There was rarely enough to eat. Nearly every meal would be a simple meal of the sticky Ethiopian bread known as injera, plus a dollop of shiro wat – a paste made from ground beans; animal protein and vegetables were a luxury she simply couldn’t fathom. “My children’s health wasn’t ideal, and I myself struggled to do the hard tasks required of me as a laborer. I was constantly exhausted and had no energy.”
Everything changed when she was selected to be a client of ENGINE, a USAID-funded program led by Save the Children that is working in 100 districts in four regions in Ethiopia to improve the nutritional status of impoverished women like her of childbearing age, who were lactating or had children under two.
One of ENGINE’s key levers of change was initiating nutrition-sensitive livelihoods efforts led by Land O’Lakes International Development. Through the provision of seeds for nutritious crops, simple tools, and livestock, Adegdigu and others like her have learned how to grow, prepare and eat nutritious meals, growing enough to sell the excess for cash at local markets.
“ENGINE was like a light – it showed me the way to have a better life for myself,” Adegdigu explained with pride. With training, she established a permagarden – a small-scale, high-yield organic family garden – and began growing crops including Swiss chard, cabbage, kale, potatoes and carrots. She also learned to compost, address water management, and make fertilizer by mixing eggshells with charcoal, ash and dry compost.
Two months after getting her first seeds, she harvested some Swiss chard and kale. After ensuring the family had enough to eat, she sold the excess at the market, and immediately reenrolled her children back in school.
In the second year of the program, ENGINE provided her with 3 female goats and a ram. She learned how to care for them at one of the Ethiopian government’s Farmer Training Centers, which partnered with ENGINE to demonstrate improved farming techniques, and she learned how to milk her livestock. “Drinking goat milk isn’t common here, but I took the lead on being the first person in my group to begin drinking it and feeding it to my children.”
As more vegetables in her permagarden matured, she not only continued to diversify the family diet, but also started turning farming into a viable business. When her carrots matured, she sold the excess for 1,300 birr (US $62), and used the proceeds to buy some grain and a donkey that would help her with transporting her crops to market.
She continued to expand her garden with potatoes and other crops, and began buying her own seed. At the next harvest, thanks to her new knowledge about crop seasonality and selling when prices were high, she was able to earn a whopping 10,000 birr ($478) from selling her carrots. With that money in hand, and thanks to a loan provided by her Village Savings and Loan – community banking groups that Land O’Lakes established throughout ENGINE project areas – she was able to finally move out of the family’s rented shack and construct her own home.
Meanwhile, her new goats began reproducing. Although she kept her original goat stock, she sold 5 kids to provide the 50 percent cost-share that ENGINE required so that she could upgrade to having a cow. “I wanted to continue diversifying my livelihoods, and I wanted to get the extra milk for my family a cow would provide.”
Today, Adegdigu is no longer a domestic laborer, with her farming efforts provide enough food to feed her family nutritious meals regularly and to continue improving her life. “ENGINE forced me to change my mindset, because I always felt that farming was for other people, not for me,” she explained. “But with a beautiful farm like this, I now feel like I should have people working for me, not the other way around!”
She had another baby after becoming an ENGINE client, and she says the extra nutrition has also done wonders for her young baby, noting that she is much healthier than her other children ever were. “She looks 3-4 years old even though she’s only an infant. This makes me proud.”
Not content to rest on her laurels, Adegdigu’s next plan is to invest in getting oxen, so that she can also plant grain. “I no longer want to have to depend on anyone else for the food my family consumes.”
No longer tied to working outside the home as a daily laborer, she says she has room to breathe. “I now have time to pass on my knowledge to my neighbors, and they’re starting to buy seed and start their own gardens, too.”
Adegdigu says she often has trouble believing just how much her life has changed since the ENGINE program started, and how much hope she has for the future. “I used to be truly destitute, but now I’m moving to the middle. I’m not poor anymore, and having the access, training and capacity I received gives me confidence that I will become even stronger in the years to come.”
By Dave Ramaswamy
Interview with Vimal Shah, CEO, BIDCO – an agribusiness company operating in Kenya, Uganda, Rwanda and Tanzania, and one of the largest and fastest-growing manufacturing companies in East Africa.
Dave: Kenya and East Africa are importing food products from China and other parts of the world, even though there is capacity to produce domestically. What are the policy and regulatory bottlenecks preventing entrepreneurs here from supplying the local market? Where do you see niches or opportunities where entrepreneurs can bypass and overcome these obstacles?
Vimal Shah, CEO, BIDCO
Vimal: Currently in Kenya, there are no policy or legal obstacles to producing locally and supplying the market locally, either from local production or by importation. What happens is, wherever you have competition and where people have economies of scale and scope, you’ll bring in productivity. We have a very liberal business climate. …We have nothing banned. Our tariff bands are zero, 10 percent, and 25 percent—25 percent being the maximum tariff. Zero is for raw materials manufactured here. Ten is for intermediate raw materials or products for processing for industry, and 25 percent is for finished products coming from anywhere in the world.
If you have a product coming from China, let’s say tomato sauce or tomato concentrate, and it’s got a 25 percent duty on it, even then, the Chinese product still does come out to be more price-competitive at times.
There’s nothing stopping us in Kenya from competing with that. We can actually start processing tomatoes here. It’s just that people haven’t put up those sorts of industries, number one. I think competitiveness is the key. If you’re competitive, you can actually bring in your products from anywhere and start selling them here. Local manufacturers or local processors need to be competitive on quality, price, and delivery. That has just not happened till now, and that opens up a huge amount of opportunity.
Dave: I’ll build on what you said in terms of value and price. How do Kenya and East Africa create value and retain value? For example, Starbucks sources green coffee from East Africa at between $3 and $4.5 dollars a kilo, and sells in America and Europe for between $30 and $40 dollars a kilo. So a lot of the value that originates in Africa is captured elsewhere. Ethiopia, a big raw coffee exporter and where the coffee bean originates, imports instant coffee from places like Malaysia and Singapore. So, where do you see the opportunity for African farmers to group together and retain more of the value they are producing?
Vimal: Brilliant question. I think what’s happened in the past is, a lot of this was controlled by countries in Europe who had colonies in Africa. Coffee and tea were traditional exports from Eastern Africa to those countries. Eastern African means Kenya, Uganda, Tanzania, Rwanda, Ethiopia included.
Traditionally, we’ve been exporting our raw materials because that was determined by the international market. Now the market was the “big boys” in Europe or North America, where they put up factories to produce instant coffee or roasted coffee, and the subsequent consumption happened in those markets. If you follow the coffee markets, there are about four or five major players, and they’re all located in Europe or the US. They never put up factories here in Africa.
It is now time for us in East Africa to put up those factories here, and to start niche brands, and start exporting to those markets … because even today, per capita consumption of coffee is not as big in Eastern Africa as [in] the US or Germany or other markets. We’ve been traditionally exporting these things, so the whole status quo [is unchanged]—the people who are exporters have remained exporters, and with all this, there’s only demand for green beans or raw coffee, and so that’s what we export. All the roasting plants have been overseas.
This is a challenge, but it’s a serious opportunity to start roasting plants here, coffee processing plants here, and then exporting those value-added products.
Our traditional focus in Africa has been in commodity exports. Freight costs have been expensive, but when you export raw or finished commodities, it is nearly the same cost. Value addition has been retained by people at overseas companies, number one. Number two, in terms of policy, we have restricted trade policies.
For example, Ethiopia cannot bring its coffee [into Kenya] because of logistics
issues. However, lately we’ve removed all barriers to trade, so you can actually bring in coffee from anywhere, process it here, and export it.
This liberalization trend is going to help people put up those sorts of factories here. Eastern Africa needs those sorts of factories. However, today there are four or five large companies, and unless they invest, nobody locally wants to take that step. African companies must come together and say, “Let’s start food processing here,” and then ramp things up. It’s a serious opportunity.
Dave: In the five East African countries you mentioned, where do you see each of their comparative advantages, and in which food crop or commodity?
Vimal: I think the whole of East Africa is pretty rich in agribusiness opportunity. They can start doing a lot of things. However, in Uganda the costs have been higher for fertilizer and stuff like that, but fertilizer isn’t used there. It’s still mostly organic agriculture. Whereas in Kenya, we’re bringing in fertilizer from overseas, so there’s a need for a local fertilizer factory.
Tanzania and Uganda also have land tracts available for doing large-scale agriculture. However, it doesn’t need to be agriculture alone. A lot of times efforts have been along the lines of “let’s produce maize.” And then “let’s find a market for maize.” I’m saying we should look at maize and say, “Make it into flour. Make it into different value-added products. Make it into snack products. Make it into finished products that people will consume and then sell to those particular markets.”
The view of the full crop value chain is what I would encourage. Then look at your consumption niches for crops. What are we consuming right now? A lot of the raw materials, like wheat and maize, we consume locally by processing. But the finished products—the snack products—we still import. We’re importing the real, higher-value-added products because there’s been no economical scale or scope to produce them here.
Now in Kenya, we’ve got the East African market. We got the whole of the COMESA [Common Market for Eastern and Southern Africa] markets, right down from Zimbabwe up to Egypt and Libya. We could start exporting [to] these, too, so we could become regional players.
Having said that, the intra-regional trade within Africa has been a problem because of logistical problems. Logistically, it’s more expensive to export from here in Kenya to Egypt than it is from here to China because the trade flows and related costs favor products from China. Even with the USA from East Africa, our cost of freight is too high because there is no big two-way trade. So this is an opportunity that favors local production.
Dave: Wealthy Americans have something in common with poor Africans—both eat whole foods. In the case of wealthy Americans, there’s a need to shop at a “Whole Foods” store, while in Africa it grows in your back yard.
Vimal: We do consume mostly organic food products.
Dave: Organic, yes. And also ancestral and traditional grains. Some of the “gourmet” items in American supermarkets are grains like sorghum, millet, teff, and unrefined red palm oil originating and consumed in rural Africa. Wheat and rice are sold much cheaper compared to these foods. Where do you see opportunities for African farmers and entrepreneurs to capture some of these niche, high-end overseas markets, using traditional African crops?
Vimal: The gap has been in terms of the African farmers and producers not knowing where the market is, what the market size is, and the value to be captured. Traders come out and buy these products, and then export them in bulk. These middlemen have been making a lot of money out of this. That’s why you see the price of a Starbucks coffee being four or five dollars. It may cost them maybe five US cents for the coffee content. The cost for marketing, location rental, ambience, etc.—this makes the value added overseas much higher.
It’s not only about the US. I think it’s about the whole world. Consider teff right now—you’ve got a lot of Ethiopians, a million, two million Ethiopians in the US, and they need teff in injera every day. They don’t have production elsewhere, so that’s an export commodity from Ethiopia.
Maize flour that we make ugali from in Kenya—a lot of the Kenyan diaspora don’t get it overseas, so they take it back with them. There’s been no real export of that. Every one of those examples is linking markets to supply, and thus supply chains become tighter—and, of course, becoming more competitive is serious opportunity.
Organic stuff from Africa can go out and be still organic and be consumed at a much higher price. … But traditionally, Eastern Africa hasn’t known America as a market. We’ve been traditionally linked to Europe and now Asia, because we’re nearer geographically, and also because of the colonial legacy. The US has always seemed far away, and so has Australia. Now that we’re opening up trade with the US through AGOA [the US African Growth and Opportunity Act], there’s a serious opportunity to match overseas demand with the supply here.
Dave: People talk of having bankable projects. For its Power Africa initiative, USAID appointed transaction advisors to structure specific projects and make them bankable for financiers and see them through financial close. How do we make African agribusiness projects bankable?
Vimal: If you look at the whole value chain, right from the farm gate up to the finished product being processed, you can see each step, and see where a lot of value is added.
Take cotton, for example. We’ve been exporting it as raw cotton. From exporting raw cotton to exporting cotton as shirts with designer names on it, there’s a 1600 percent value add. That value-add hasn’t been captured in Africa because we’ve still been exporting raw cotton.
So some of these foreign companies need to bring their industries here—that’s the opportunity. A bankable project in this case will be linking with the high-end branded-name producers or sellers in the U.S., and making the products for them here in Africa, with our raw cotton and our talented labor force, and at lower cost than China. That would be amazing. Once you link up the whole value chain, it is almost bankable right away
You’ve got to have an off-taker for the branded products. We got a goal. We’ve got the AGOA. We’ve got duty-free access to the US. It’s an amazing opportunity to link all that up. What we need is that linkage. It becomes a bankable product in itself because the value added is going to be very high. You need to work out the details and the logistics, and make sure you’re tied to the final buyer or off-taker.
Dave: Africa has a huge youth population. Historically, there’s only small amount of jobs available to them, and many of them, based on their parents’ advice, want to go into safe, secure government jobs. Yet there aren’t enough office jobs to be had, so the only solution is entrepreneurship. But many of them haven’t seen agriculture and agribusiness as viable alternatives.
What’s your advice to both the policymakers and to young Africans? How do we make the agribusiness sector attractive to young people? How do we set up structures so people have the opportunity to fail yet still recover and keep going forward?
Vimal: We’re giving today’s youth all these sophisticated gadgets and data. Therefore they don’t want to be farmers after they graduate, even if they drop out of school. They perceive agriculture as meaning “poor farming,” and they don’t see themselves fitting in that role, doing a low-tech activity. We’re going to have a serious shortage of people going into agriculture per se.
However, you can tweak that perception and say, “Fine, do agriculture, but add agribusiness to it—which means processing a crop or grain into a finished product, and branding it. Now you have a customer at the end. It’s a business.”
Then you’ll find a lot more people saying they wish to go into agribusiness. It’s not just agriculture. They’ll still get to use their technology. They’ll use all-new systems across the whole value chain, and that’s the amazing part. None of our children today grow up wanting to be poor farmers.
The whole move from agriculture to agribusiness has started to happen. If the McKinsey Report says 60 percent of the unused arable land in the world is still in Africa, that land needs to be utilized by Africans.
There are a lot of issues around land and the size of landholdings. That’s become a big issue. People are subdividing lands into smaller and smaller pieces, just for family to keep. That doesn’t add much value. You need to have commercial agriculture going at the same time you have agribusiness, through processing and branding happening. That’s going to make our youth want a piece of that. Use technology, use systems to make agriculture sexy. That’s the big challenge and opportunity.
Next is linking to markets. We’re today a billion people in Africa. We’re going to have 2 billion by 2050. The next billion people need to have food, clothing, and shelter. They need to be housed.
There’s going to be massive urbanization. The way the urbanized consumer is going to consume food products is going to be radically different. There will be more ready-to-eat, packaged foods. There will be fewer of the raw materials consumed directly. There are going to be fewer people on the farm producing stuff. The rate of food consumption per capita is going to go up.
We don’t have the local capacities to serve these rapidly urbanizing markets. So they’re being serviced by imports. The opportunity space for African entrepreneurs is massive.
Our liberalization focus is not for the world to export here, but to make it easier for [African] countries to trade internally within Africa, by removing the duty tariff barriers. There are no tariff barriers in East Africa anymore. Now what you have are non-tariff barriers, which is what we mean when we talk about obstructions to trade flows—customs and procedures where each country’s trying to say, “I want to protect my farmers.” We need to be open. We’re going to be a big market, and anybody in Africa can export to anywhere else within Africa. This will start regionally and then expand.
Dave: Where do you see opportunities for job-skilling at the high school level? Instead of a three- or four-year traditional college, perhaps having like a two-year community college, like we have in the US? Give students a feel of a local business, learning by doing, a combination of some morning theory plus afternoon practical hands-on training, like the German apprenticeship model? How do you see that playing out in Africa?
Vimal: An amazing opportunity exists in the learning and teaching fields. The raw talent we have in the youth of Africa, or the youth of Kenya, is incredible. They’re moldable, trainable. They learn pretty fast. We just need to expose them to the latest in technology, the latest in learning, and give them skills to do the right jobs.
A lot of [Africa’s] universities have been running curriculums based on the old British system or the French or the Portuguese system, and graduating students having a [BCom] BA, or a BSc degree. They’re producing more graduates, but they’re not appropriately skilled for the jobs of today and the future.
We need to “up-skill” them. So in educational institutions, there is huge opportunity because now Kenya has allowed privatized institutions. I say in education, but we’re also talking about health care and the whole space of up-skilling technology. Scientific agriculture, precision agriculture, needs to come into Africa. The minute we bring that in, we reduce crop wastage and become lean by growing more with less. We reduce the waste of the water and the minerals and organic content in the soil.
We have enough sun here. We have enough people here. We have enough land available. We have water available. We just need to use all of these resources in an efficient and effective manner toward producing first for Africa, and then exporting for the world.
The minute we get that done, and with the right logistics facilities—where you can store, export, and import various commodities—amazing things can be made here.
Really, landholding policies need to change. Small farms need to become commercial farms, instead of being divided or subdivided into even small plots for real estate, or lying fallow. They need to become viable. That’s going to happen here, and I think on a large scale, it’s going to feed the world.
Dave: I’ll build on top of what you mentioned—logistics – ports etc., which are a key complement to agriculture that people typically ignore. If you think of core development as a tripod, you have agriculture or agribusiness; you have infrastructure, meaning ports and roads; and the third piece is energy to store food, process food, to dry food.
I know there’s lot of pension fund money in Europe and US currently earning very low returns on capital and looking for a home. How can Africa create investment vehicles or structures to make a home for that capital?
Vimal: Africa needs to do whatever the US did to have venture capital, to have accelerators, to have incubators, stock options. There are three different types of investors. There are the startup financiers. They want high returns and don’t mind taking high risks. Then you have the second level who say, “Fine, I want lower risk,” and they’re happy with a corresponding lower return. Then you have the third type who are very risk-averse and want stable returns. Africa has investment avenues for all of them.
In fact, we can leapfrog over the latest models in the US or in the Europe, which worked, and we start doing it here. We just need to liberalize our capital markets. What is being done to leverage foreign capital can also be done to leverage local capital.
There’s enough local capital, and I think a lot of wealthy Africans have their money overseas, in places like Switzerland or Dubai. It needs to come back here to really make it productive. Once they have the security that the money being brought back home will not be in jeopardy, I think Africans would start investing in their own countries.
Dave: Let’s talk about BIDCO and your operations from farm to plate.
Vimal: Soil to the frying pan, we call it. We’re capturing value, adding value, and giving jobs to lot of Africans.
Dave: Can you tell us about how you see BIDCO evolving over the next five or ten years, and what are your top three strategic priorities?
Vimal: Our goal is to grab, grow, and sustain number one market share in the African markets by 2030. That’s what we are aiming at. We’ve got 15 more years to go. We’ve got Sub-Saharan Africa as a market. This excludes South Africa and North Africa. With that, we’ve got to ramp up ourselves and do what we’re doing in FMCG areas.
We see ourselves playing a bigger role in the full value chain across Africa in the food, hygiene, and personal care space. That’s where we see big avenues for growth. We’re still expanding across Africa. We’re right now in Kenya, Uganda, Tanzania, and Rwanda, and now we’re looking at Madagascar. We’re putting up a plant there. We’re evaluating Ethiopia and other markets. I think going forward slowly we’re going to get to our goal.
At the same time, how we do our business is important to us. We call it “enhancing happy, healthy living” across Africa. Happy, healthy living means we want to do it the right way, number one, fully compliant with ISO 9000, ISO 14,000, etc. standards. We’re signatories to the UN Global Compact [which promotes responsible, sustainable business practices]. We follow all those principles. We believe that that’s the way to do it in Africa.
We do find that in certain markets in Africa, there is non-compliance in taxation. Those markets become difficult for us to operate in. We’re waiting for them to mature and become more transparent, more open, before we enter them.
Having said that, there’s a big demand for the products that we make here. We’ve got all our own brands. We call ourselves BIDCO Africa now, from the earlier BIDCO oil, where we want to extend our presence across the whole of Sub-Saharan Africa.
We don’t see ourselves going into Europe, or into the US or into Asia or Australia. We see Africa as our big turf, and we see a huge opportunity space opening up here for ourselves. The way we do our management is all real-time online. It’s using platform tools like SAP, and all the latest technology. We also do mobile commerce. We process payments through mobile phones. Route to market is excellent, so we have that captive customer. We have strong brands and systems in place, and processes and people to support that. We are about enabling “happy, healthy living.”
Dave: Over the past 50 years, the world has tried to “give aid to Africa,” to “teach Africa,” and had this patronizing attitude. Instead of seeing Africa as having challenges, Africa is itself seen as a challenge. Consequently, there are many external misperceptions. Yet there are a lot of amazing African entrepreneurs who have built great businesses. There’s a lot of youthful vibrancy here.
What is your message to foreign investors coming to Africa, and what can Africa teach the world?
Vimal: I think many things. First and foremost, Africa is a continent. It’s composed of 54 countries, but principally five regions. Eastern Africa, Western Africa, Central Africa, Southern Africa, and North Africa. These five are similar in many ways. We have the Anglophone Africa and the Francophone Africa on western side, for example.
However, the operating philosophy in many countries is different, and there’s regionalization taking place today. Countries in Eastern Africa today are becoming similar in terms of laws, and policy related to the law, opening up. West Africa is also doing that. They’re trying to open up their markets through ECOWAS [Economic Community of West African States]. It’s going to happen across traditional trade routes. The opportunities are going to become bigger. Economies of scale and scope are going to shoot up.
Africa has not been using its resources to its full potential. We’ve not been exploiting our resources ourselves. We’ve been allowing foreigners to exploit them. I think Africa has got to teach one thing to ourselves. We have serious opportunities in Africa for Africans to take part in. However, Africa has taken a very liberal view to this and allowed foreigners to come in. We’re not fundamentalists. We’re all okay. In fact, the equator passes through here [Kenya]. We have enough sun and water, and sometimes foreigners call us happy-go-lucky.
We’ve been very lucky for all this time, but now it’s time for Africa to leapfrog to the latest and start producing for the world. If fact, we could become the food basket for the whole food. Today we have 7.2 billion people in the world. It’s going to get to 9 billion in 2050. What’s going to happen after that? We need to increase the opportunity space here in Africa to cater to the increasing population demographics, urbanization, etc. Our substantial youth labor force speaks of opportunity.
A lot needs to done. We don’t need to go through the same learning curve as Europe or the U.S. for development. We don’t have to do carbon-intensive development. Asia took a very fast approach. They leapfrogged also. We can now go beyond Asia, and go to the latest right now, using technology, people, and processes.
However, we’ve got more democracies in Africa now. Even with the people, even with the corruption that we have in Africa—and again corruption is a giver and a taker—a lot of the times it’s been the West as a giver and the African as the taker. That needs to change. Going forward, there’s a sense of urgency we need to drive into Africa. We need to make sure that we go the right way.
We cannot do what Europe did. Europe destroyed much of its forests, killed off most of its wildlife, and then they built concrete jungles.
In China, same thing. We must learn to say, “Let’s live with nature.” You can see the nature here in Kenya. You live with nature. You be one with nature. Don’t destroy it. Live within that ecosystem. Make it ecofriendly, and find a new way to make development sustainable.
Sustainability is not just about adapting to climate change. It’s also about sustainable businesses, where companies make profits and social welfare increases. I think inclusive capitalism is something Africa already practices, and I’ve been talking to people in the UK about that. We don’t want to be like the extremist capitalists on Wall Street or elsewhere, who want to make money at all costs.
In Africa it’s going to be inclusive, and that’s what we can teach the world. Africa is already practicing inclusive capitalism, where society, people, and families all rise up together, along with the business. We’re not only profit-minded, but also socially conscious. I think that’s something we can teach the world.
Dave: Very good, Vimal. Thanks a lot for your comments.
Vimal: Great. Thank you.
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