“The solar off-grid grid space is fascinating. Like telecom it is an example where development and private interests are fully compatible.”
Exclusive interview with Harald Hirschhofer, Senior Advisor, The Currency Exchange Fund (TCX), The Netherlands. Harald is organising a TCX Risk Mitigation workshop during the F&I Forum at African Utility Week, taking place in Cape Town from 16-18 May, and will address attendees on “Understanding of risks and their pricing – how can the supply of long-term local currency financing and hedging be improved?“
1) Let’s start with some background about your respective organisations and your role there?
TCX is a unique global provider of innovative currency hedging solutions. We have a very strong development focus and over the past 10 years we have protected millions of borrowers in frontier and emerging markets from the horrible financial consequences on their firm and household budgets from sudden exchange rate depreciations. I am working very closely with our CEO to develop new strategic initiatives to promote local currency financing, both within the domestic financial system as well as cross border from DFIs or private investors.
2) What is the most exciting project you have worked on in Africa so far?
The solar off-grid grid space is fascinating. Like telecom it is an example where development and private interests are fully compatible. Mobile banking applications have created new credit channels and even the poorest can now build a credit history and gradually accumulate assets. However, the gap between the local currency receivables and the hard-currency funding of the sector are still an Achilles heel. TCX is working with the leading firms, such as M-KOPA, and industry associations like GOGLA to reduce such systemic risks. These firms should be financed in local currencies, or if that is not possible, reduce the fx mismatch.
3) What did you learn from the investments that did not do so well?
Well, TCX does not provide funding. We are providing risk management tools like swaps and forwards to all kind of investment projects around the world. Like with any other type of insurance provider, having losses is part of our business. Our losses protect our clients. For example, we lost more than US$40m in one day when the Central Bank of Azerbaijan could not defend its peg anymore, but that probably saved thousands of local firms and borrowers from heavy financial difficulties.
4) What in your view is the biggest misconception that people have about investing in Africa? And about renewable energy?
I think there is too much fear about the uncertainty of some renewable business models which drive up credit spreads. For example, solar technology is well tested now, project implementation risks are low in many countries, and pay as you go schemes work with low default rates. Bankers do not yet fully appreciate this. More needs to be done to share performance information of existing firms and train bankers and investment officers. An industry association like GOGLA is well placed to make progress in this and we at TCX would certainly like to contribute.
5) Which countries on the continent are doing the right things? Where are the opportunities?
Many countries have understood that a stable and modern regulatory, legal, and judiciary environment combined with stable macro-economic policies are critical for development, especially for capital intensive sectors. We must do more in standardization of contracts and processes across Africa, learning from more advanced countries. Africa is in the unique position to leapfrog, or as some of my African friends say, to jump like an antelope across older technologies. Let us mobilize the solar and fintec entrepreneurs and empower then to find new solutions for the benefits of all. I hope that vested interests and stranded assets will not be allowed to stand in the way of new and better technologies.
6) You are organising the TCX Risk Mitigation workshop in the F&I Forum at African Utility Week this year. What will be your message to attendees and what can they expect of this workshop?
Do not speculate! Entrepreneurs should strive to only accept those risks in their business model which they are able to somehow control and manage. For example, project implementation risks, supply risks. Risks which they cannot influence should be insured and the insurance costs made part of the cost envelop. FX risk, which manly consists of market fluctuation and in-convertibility risks, is one of those risks, which should be eliminated from the business model. Otherwise, an otherwise healthy firm and its customers and funders can suffer huge losses, because of events which lie completely out of their control. Think of the copper price in Zambia, or the Tuna bonds in Mozambique. We still need to make a lot of efforts in awareness building and deepen the understanding how modern financial instruments like those offered by TCX can help. The Risk Mitigation workshop at African Utility Week is an opportunity to make progress.
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Marshal Papworth has teamed up with Moulton College in Northampton to further develop its work in building sustainable farming skills in communities in sub-Saharan Africa. The Charity, which works with lead farmers and agricultural extension officers from Africa to advance their knowledge and practical skills, will partner with Moulton College, one of the UK’s leading agricultural colleges, to deliver a tailored 10 week, full time course.
The annual course will welcome students from across the developing world – including Ghana, Malawi and Uganda – to the UK to work towards a BTEC Certificate in Agriculture. The course will cover crop and livestock management, business management, animal and plant husbandry, farm mechanisation and technology, and basic IT skills, alongside a schedule of enrichment and cultural visits which support the Marshal Papworth programme.
Tom Arthey, Marshal Papworth Chairman, commented: “Since conception, Marshal Papworth has provided scholarships to students from developing countries which enable them to come to the UK and study at some of the top agricultural and horticultural institutions here. This new partnership reinforces the Charity’s commitment to providing students with the best opportunities to build their skills for the benefit of their communities.”
Moulton College has also created a fellowship programme which will link each visiting students with a full-time student at the college to ensure they settle into the college easily and take full advantage of the opportunities available to them.
Steve Davies, Principal of Moulton College said: “I am delighted that we have forged this collaboration with Marshal Papworth who are doing exceptional charity work in sub-Saharan Africa. We very much look forward to welcoming the students to Moulton.”
“External bull intervention and entrepreneurs revive Zimbabwe´s troubled livestock head”
Article written by Ray Mwareya, 14 November 2016
Africa Agribusiness Magazine media by Alexander Hitzemann
Reckless inbreeding, spurred by ignorance, almost wiped off cattle, goats and sheep stocks in Zimbabwe´s rural provinces.
In the words of Mr. Max Makuvise, co-founder of Makera Cattle Company, an entrepreneur who is at the forefront of reviving the country´s beef cattle herd, the calamity that chopped off Zimbabwe´s cattle head can be described in one word “inbreeding!”
Rural farmers, especially women, watched in dismay as calf births plummeted to an average of 25 kg, drug resistant sheep diseases mutated, and dishonest merchants dangled exploitative prices like $80 per heifer bull.
Thanks to a critical intervention by global Irish Aid and GOAL charity, and indigenous startups like Makuvise, pedigree cattle bulls have been introduced to farming cooperatives in rural Zimbabwe.
The results are astonishing and instant.
Newly birthed calves have seen their weight shoot to 45 kg! Goat stocks have multiplied into hundreds, entrepreneurial female farmers are stocking up to $50 000 in saving clubs, commercial beef corporations are offering lucrative prices again, villagers are selling livestock as community cooperatives, and spreading the income into pharmaceuticals or growing legumes like lablab, velvet beans to supplement stock feed.
We sit down with Mr. Max Makuvise, the beef entrepreneur, who says an $80 000 seed grant from Zimbabwe largest bank, mentorship from Zimbabwe´s top finance regualator and strategic collaboration with multilateral organizations such as Irish Aid has sparked his efforts to return the country to the status of “the beef capital” of Southern Africa.
Between him and his partners Mr. Petrus Erasmus, they claim to have 50 year’s livestock experience. “Through Coopers Animal Health, which we are both directors of, we also bring over 100 years of animal health experience to the party.”
“We began this in 2004 with a “pedigree Tuli cattle herd,” he begins.
Why this specie of cattle?
Zimbabwe government’s aggressive seizure of white owned commercial farms beginning in 2001 provides a clue.
“The Tuli cattle herd specie became available as it was being sold by a friend who had lost his farm. He was winding up operations, and had already moved them onto our farm with a herd of Herefords specie for safekeeping. Naturally, he was looking for a buyer. We took an interest in them as they were indigenous breed and are known to be very fertile.”
Zimbabwe was facing world record hyperinflation from 2004. Beginning operations was a nightmare until intervention came. “The initial cost was approximately US$80,000. We received help from a bank through Mr. John Mangudya, who is now the governor of the Reserve Bank of Zimbabwe.”
He says Zimbabwe beef industry, formerly the darling of European Union importers and restauranteurs, has changed beyond belief today.
“Our beef industry has been rebranded in the last fifteen years. Historically, white owned commercial farms accounted for the largest output. Interestingly, rural small cattle farmers are the mainstay of the country beef supply today. It´s a revolution.”
“I think now it is important to allow rural farmers the ability to manage their cattle both as an economic, commercial asset.”
Mr. Makuvise and his company are walking the talk in their passion.
“We train rural farmers to be para-vetenarians who treat their own sick cattle, equip them with tools to monitor market prices, provide breeding literature etc.
Funding is ours, complemented by the donor community. An informed farmer brings increased genetic cattle sales.”
“We upgrade Para vets through refresher courses.”
He smiles and reveals, “The term Para is being changed to Primary Animal Healthcare worker.”
Mr. Makuvise who manages over 200 bulls in the rural areas of Zimbabwe and will over the next few months be completing the training of 10,000 farmers in Primary Animal Healthcare.
He thinks Zimbabwe´s beef industry need to gaze long into the horizon and avoid rapid consumption culture. “We a great deal of emphasis on the farmer not just worrying about markets. Our rural farmers need to be able to present the best possible product that they can to the market to maximize their earning capacity. Cattle sales must be a purely commercial decision not motivated by desperation and hunger.”
One way his company is doing this, is through science and genetics. “We are producing world class genetics through our breeding business, for use in the community / rural livestock projects. We deploy bulls for Artificial Insemination, so the rural farmer can obtain healthier breeds of cattle.”
“On science are carrying out trials on feeding of crop residues in winter as for supplementary feed cattle in hot summers.”
The offspring, bred from science, is spread wide, to obtain maximum results. “Our customers are any farmers that have cows that need to breed, universities, commercial farmers and of course rural farmers.”
Zimbabwe with its grim economy, characterized by vanishing US dollars and runaway industry closures, presents obstacles, when it comes to critical cattle feed.
“Yes, cattle feed is sourced from local players and is not hard to find. However, it is rather expensive comparing to regional countries like South Africa, Botswana, Zambia.”
Electricity, a key component to run beef abattoirs and raise calves, is a vanishing product in Zimbabwe, but Mr. Makuvise counts his luck this year. “2016 has been very good with virtually no power outages for the last 10 months.”
Makera Cattle Company is not all beef and bones. Milk, once a mainstay of Zimbabwe´s dietary economy before a catastrophic fall to just 22 000 cattle in 2010 from 110 000, is in their sights too.
“We have have embarked on a project to grow a milk collection centre in conjunction with Zimbabwe´s agriculture ministry. We lecture 23 dairy cows on primary animal healthcare, the right ration to feed their animals etc. It´s a pilot program.”
His mind is disturbed by the ever present threat of foot and mouths infections that can ground beef farms. Since 2001, the country lost its lucrative quota of 9000 tons to the European Union.
“True, foot and mouth diseases are hampering Zimbabwe´s ability to export beef. Government is battling to regulate the movement of live animals. We see room to partner with authorities.”
In conclusion, he says climate change and drought – a menace looming on Zimbabwe – is forcing him to distinguish their programs from other beef entrepreneurs.
“We insist on productivity not merely increasing herd sizes. Our competitors are preaching the doubling of family herd sizes. We think this is an error. This puts a strain on the environment at a time Global Warming is ravaging pasture grass and natural water streams in Zimbabwe.”
ABOUT THE WRITER: RAY MWAREYA is the Africa Correspondent for the Global South Development Magazine. Twitter: @rmwareya
For media and advertising inquired contact Alexander Hitzemann at email@example.com
By Alex Hitzemann
This year’s FOECD-FAO Agricultural Outlook is a special edition featuring an in-depth look at the opportunities and challenges facing Sub-Saharan Africa in the next decade. The 140 page report is a wealth of information thanks to all the resources and talent employed by the UN, FAO, and OECD. We are very fortunate to have individualized predictions for each crop and analysis of which specific factors could trigger growth spurts in the Sub-Saharan agribusiness market.
The Sub-Saharan Africa (SSA) region contains around 950 million people, which is approximately 13% of the global population. Despite drastic changes to economies in this region, agriculture remains a crucial sector providing livelihoods for millions of people. Agricultural makes up a significant portion of most Sub-Saharan countries GDP, ranging from from 30-60 percent.
The report finds that while the outlook for agriculture in Sub-Saharan Africa is broadly positive, it could be much improved by improvements in government policies across the region, by an increase in strategic public and private investments (especially in infrastructure) and by suitably adapted research and extension. Such investments could improve access to markets, reduce post-harvest losses, and make much needed inputs more widely available.
A great example of exactly this kind of investment is the new Norwegian funded company Arise. Arise is a cooperation by Norfund, FMO and Rabobank which seeks to invests in financial institutions in SSA to grow their financial services and capability to supply capital to small-holder farmers in Sub-Saharan Africa. The establishment of joint ventures, such as this, will contribute more to the development of banking than just one bank or investment fund on its own.
FAO reports that foreign investment and external financial flows into Africa have quadrupled since 2000. These flows are expected to increase two times further in the next decade.
Sub-Saharan Africa will continue to experience rapid population growth. This, in combination with rising incomes, urbanization, and continuation of current policies and market structures, the production of food crops in many countries is projected to grow more slowly than demand.
Sub-Saharan Africa’s net imports of food commodities are anticipated to grow over the next decade, although productivity enhancing investments would mitigate this trend. Food import dependency of resource poor regions, such as North Africa and the Middle East, is projected to intensify providing a huge market for any grain exporters in Africa. In SAA countries grain imports will increase 50% in ten years. Comparatively, North Africa will only see only as 15% increase.
Due to extremely high population growth, SSA has a very young population. The World Bank predictes that more than half of young Africans will enter agricultural careers, mostly in the format of small family farms. Inovating ways for youth to participate in agriculture has the potential to greatly reduce poverty and hunger. Success for these young African farmers relies on their education of land access and tenure, access to financial services, access to markets, access to green jobs and involvement in policy dialogue. All of this has the potential to make the agricultural sector more attractive to young people, providing an additional push that may be needed for them to enter the sector
FAO believes that the single greatest factor in improve crop outputs over the next decade will be yield improvements. Currently, it’s not uncommon to see post-harvest crop losses above 50 percent in the region. In the next decade African farmers will gain new metholodgies and technologies to improve their yields. The opportunity for large fertilizers and machinery companies to penetrate the African market is likely to greatly increase as farmers seek new ways to improve their output.
Yield improvements will account for 80% in the increase in crop output in Africa from now to 2020.
Recently, there has been a furry of concern about land-use and crop rotation in the region. But continuous cultivation of existing plots would not necessarily pose problems for sustainable intensification if sufficient use of fertilizers, soil amendment practices and other land-augmenting investments are employed and coupled with continued education to maintain and improve soil quality.
However, a large body of literature in SSA points to soil degradation arising from unsustainable cultivation practices in regions with a high population density, for example parts of Kenya and Malawi. Continuous cultivation and lack of crop rotation deplete organic carbon levels, making soil less responsive to fertilizer application. This also makes it more difficult for smallholder farmers to benefit from yield gains offered by plant genetic improvement.
There is also an opportunity to improve output by increase agricultural area sustainability. This is likely to make up a much smaller part of the growth in the region. The majority of new crop areas in Africa will be dedicated to cereals. Africa’s existing agricultural resources (crops and fisheries) can all be characterized as underutilized.
Maize production is expected to increase considerably, especially in Eastern Africa. Ethiopia alone accounts for almost 40% of additional production to 2025, followed by Nigeria (14%) and Sudan (10%). Increases in caloric intake in Africa will remain modest.
East Africa will see the greatest changes. Its possible that the eastern part of the continent will see up to 8 percent increases in daily caloric intake by 2020. On the other hand, central Africa will remain relatively the same in the coming decade only increasing daily intake by 1.5 percent in the same time period.
There is a large opportunity for fisheries. Projections reflect a 36% increase of food fish supply by 2025 compared to the average 2013-15 level, but accounting for significant population growth, the per capita increase is a mere 3%.
Milk production also has enormous potential in economic development and food security in rural areas. This makes dairy an important subsector in SSA. Particularly in Southern and Eastern Africa, commercialisation of the sector has illustrated dairy’s potential to provide a regular income source that reduces poverty and improves living standards. Eastern Africa currently constitutes more than half of total milk production in SSA and a vibrant
Check out the whole report here:
By Nawa Mutumweno
Norwegian firm, Yara International has been officially launched in Zambia, taking over the operations of Greenbelt Fertilizers Limited at a cost of about $51 million.
Whereas the transaction was first announced in December 2015, it was subject to approval by the Common Market for Eastern and Southern Africa (COMESA).
Greenbelt Fertilizers is a leading fertilizer distributor for Zambia, Malawi and Zambia.
Yara International says it has been motivated to acquire Greebelt Fertilizers Limited due to the investment-friendly policies introduced by the Zambian government which are conducive to business, thus attracting long-term investment into the country.
Yara business unit downstream Africa chief executive officer, Bernhard Fonsenka, said by acquiring Greenbelt Fertilizers, Yara will be able to provide sustainable crop nutrition, increase crop yields and farmers’ incomes.
‘’We invested in Zambia because we were motivated by the investment-friendly attitude that we have witnessed through the process of this acquisition. We observed that investment authorities, regulators and partners, all have the determination to attract long-term commitment by easing the cost of doing business,’’ he said at the launch of Yara Zambia on May 4, 2016.
‘’While Yara boasts of its ability to deliver the world’s best agronomic practices and resources to local farmers, it will continue to ensure that the farmer remains at the heart of everything we do with the aim of sustainably increasing their profitability, thereby improving their livelihood,’’ he added.
Speaking earlier, Agriculture deputy minister, Maxus Ngónga said the coming in of Yara in the agriculture sector will bring competition in the marketing of fertilizer.
‘’This investment has come at a time when Zambia is diversifying its economy and our commitment is not only to make Zambia the food basket of the region, but also attract investments that will help us achieve that dream.
‘’As a nation, we are delighted to have a new entrant in the fertilizer sector because this creates competition and helps to push the prices of the product down for the benefit of the farmer,’’ he elaborated.
Norwegian ambassador to Zambia, Arve Ofstad is optimistic that Yara, as a commercial producer of fertilizer, will add value to the Zambian economy through job creation and better yields for farmers.
By Nawa Mutumweno
Zambia is among 12 countries in Sub-Saharan Africa expected to benefit from the newly launched Stress Tolerant Maize for Africa (STMA) project that will develop improved maize varieties with resistance and tolerance to drought and diseases affecting maize production.
The varieties have been launched to help the region boost food security.
The STMA project introduced by the International Maize and Wheat Improvement Centre (CIMMYT) and the International Institute of Tropical Agriculture (IITA), will help increase maize productivity by about 30 to 50 percent and provide 5.5 million smallholder farmers with improved maize varieties.
According to the ProAgri latest report, other beneficiary countries are Benin, Ghana, Ethiopia, Kenya, Malawi, Mali, Nigeria, Uganda, South Africa, Tanzania, and Zimbabwe.
STMA project leader, Tsedeke Abate, said the four-year project will improve maize production for over five million smallholder farmer households by the end of 2019 in the targeted beneficiary countries.
‘‘STMA will use modern breeding technologies that will confer the desired resistance to pest and diseases, and tolerant climate stresses like drought and heat to benefit farmers within their socio-economic capabilities, that often dictate their access to important farm inputs such as fertilizer and improved seed,’’ he said.
The project will apply conventional breeding techniques to develop maize varieties and hybrids capable of resisting environmental shocks, including drought, low soil fertility, heat, pests and disease.
‘’The project also seeks to increase commercialisation of improved multiple stress-tolerant maize varities with gender-preferred traits,’’ he elaborated.
STMA will also link up national and regional initiatives to develop strategies that bridge the yield gap and dramatically increase maize production at smallholder farm level.
Continued collaboration with partners will enhance sustainable maize research and development systems in target countries through sustained variety release deployment and adoption which has been insufficient in many sub-Saharan countries, Mr. Abate added.
STMA is funded by the Bill and Melinda Gates Foundation and the United States Agency for International Development (USAID).
Norfund, FMO and Rabobank have entered into a partnership to reaffirm their long-term commitment to Africa’s future development, growth potential and the local financial sector. The partners are committed to strengthen and develop effective, inclusive financial systems in Africa. It is also envisioned that Banco Montepio, a financial group based in Portugal with banking investments in Africa, will join the partnership in the near future.
The partners currently hold stakes in several financial service providers (FSPs) in Sub-Saharan Africa which they have agreed to pool together. The new company, to be named Arise, will start with a presence in over 20 countries, USD 660 million in assets and is anticipated to grow to USD 1 billion. Arise will take and manage minority stakes in African FSPs. The key ambition is to build strong and stable FSPs that will serve retail, Small and Medium Enterprises (SMEs), the rural sector, and clients who have not previously had access to financial services.
Norfund, FMO and Rabobank have been active in Africa for many years with a positive impact in local markets. Through Arise, the partners will continue to adequately support the growth and development of the FSPs by providing among others technical assistance and management services in the field of governance, management, marketing, innovation, compliance and risk management. Capital will also be allocated for new investments. Arise will be operational from 1 January 2017.
Berry Marttin, Executive Board Member of Rabobank: “Rabobank’s activities in investing and building strong financial service providers in emerging economies, especially Sub-Saharan Africa, truly fit our Banking for Food strategy; focused on creating solutions with our clients to feed the world in 2050. It is therefore very important to us to take this approach to a higher level. By joining forces and pooling assets, networks and expertise with Norfund and FMO, two highly experienced development institutions of excellent reputation, we are taking a major step forward.”
Kjell Roland, CEO at Norfund: “Norfund invests in financial institutions to strengthen their ability to supply capital and financial services to SMEs and unbanked people in Sub-Saharan Africa and thereby contribute to economic growth and poverty reduction. The establishment of Arise will contribute to the development of the financial sector in Africa on a scale which is far beyond what Norfund can achieve by itself. By partnering with experienced, like-minded investors such as FMO and Rabobank, will ensure that Arise benefits from excellent banking, technical and managerial expertise.”
Nanno Kleiterp, CEO at FMO: “FMO is proud to co-create a unique platform for investing in African banks with Norfund and Rabobank. Arise can leverage the extensive banking knowledge and valuable agri-banking expertise of its founding partners. This partnership will increase the availability of financial services to small and medium enterprises. Above all it will allow the people in Sub-Saharan Africa to empower themselves by getting bank accounts and taking loans and thus building a better life for their families.”
José Morgado, CEO at Banco Montepio: “We are very happy that we will become a part of the new company, Arise, in the near future. Africa has always been an important market for us and being involved in a company with this type of network and focus really represents added value. With this partnership we are executing another step in our Strategic Plan.”
The transaction is subject to regulatory approvals being obtained, both at shareholder level as well as at the various underlying investee levels.
Article by Jennifer Hyman, Director of Communications, Land O’Lakes International Development
Having insufficient money to feed and clothe her children tormented Teresa Alberto João Danasio for years. “It used to tear me up inside when my children would come back from playing, staring at me, and for me as their mother to have no food for them,” Teresa, 28, recalled. “We have a saying in Mozambique that happiness comes from the stomach. So, if the kids are hungry, it means that they are sad. As a mother, this really affected me.”
At the time, the entire family relied exclusively on the US $50 monthly income Teresa’s husband Jemute Manuel Chaona, 32, earned as a social service assistant. There were nine mouths to feed in all, including their three children and several relatives. Teresa recalled, “We experienced a lot of challenges because of insufficient income, but we had no options. It was all we could rely on. There were days when we had no food, and no ways to fill other needs.”
But despite their difficulties, and the stress he felt being the family’s sole provider, Jemute wasn’t immediately sold on the idea of acquiring a dairy cow when Teresa told him about the USDA-funded Food for Progress Program implemented by Land O’Lakes International Development. The program is linking 4,050 smallholder farmers to a commercial dairy value chain in Maputo, Sofala, and Manica provinces, and training 16,000 Animal traction farmers in new and improved agricultural techniques and management practices.
More broadly, the program is working to build an effective dairy value chain, reduce imports, rebuild the dairy herd and promote private sector investment – in the aftermath of the 16-year civil war that decimated the country’s dairy herd and infrastructure.
Overcoming Fear and Moving Forward
“I told her, how are you going to manage such a demanding animal? And how are you going to provide it with feed?” Jemute recalled asking. He had also heard about the program, and knew that free-grazing was discouraged; considering feed is the most onerous cost of caring for dairy cattle, this was a legitimate concern.
Beyond the fear of whether they could manage taking care of a dairy cow, their biggest concern was what it would mean for Teresa’s education. Teresa was busily trying to complete 10th grade and was loathe to drop out, especially considering her children, ages 8, 10 and 12 weren’t far behind her in their studies.
But Teresa insisted and convinced Jemute to give it a try with her and see what might happen. And so it was that the two began tag-teaming as partners in everything to make this new opportunity work.
“When I made the decision, it was really a challenge for me, but I continued studying. My husband would wake up early morning and go to his work, while I went off to school. Then, around 9am, we’d both escape from work and school to attend our dairy trainings, and then we’d head back to work and school when we could.”
They both laughed as she relayed the story of how they managed to make things work during the 2-week training. “We were acting like fugitives, constantly sneaking out to make ends meet,” Teresa said. Jemute joked, “If I was really a fugitive, I wouldn’t have come back!”
Since successfully completing Land O’Lakes’ training and passing the course was a prerequisite to actually receiving a pure-breed in-calf Jersey heifer, Teresa was skeptical her efforts would come to fruition. “Initially, I doubted myself. I wondered, would I really be eligible to receive a dairy cow? And is this program all talk?” But within a few weeks of passing her course, she received her cow and life began to change.
Teresa Alberto João Danasio affectionately holds her new “cash cow,” Teresinha.
The Arrival of Jemute’s ‘Second Wife’ Teresinha
When the cow arrived in July 2014, Teresa says her family exploded with emotion, and the cow quickly became a critical part of their lives. “The cow and program came at the right time. We smelled the cash as soon as we saw her!” Fittingly, their cow was given the name of Teresinha – small Teresa – and her children regularly call out if they observe that Teresina needs more food or water. Jemute added, “I now consider Teresinha my second wife!”
After calving, Teresinha started providing the family with between 12 and 13 liters a day. After keeping about 2 liters for enriching the nourishment of the family, they sell the remainder for between US $0.40 -0.46 per liter either to Copoleite, a cooperative based in Beira, Sofala provincial capital that operates a processing plant, or to a local microprocessor. Ultimately, Teresinha’s milk provides them with about US $100 a month – almost double her husband Jemute’s salary, which triples the overall household income.
Teresa shows off the new home she’s busily constructing with her new income from dairy.
“I’m happy that Teresa is bringing in this income, and I’m not threatened that she’s now earning more than me. It means our financial burden is alleviated, and I’m not threatened by the fact that the family isn’t entirely relying on my income anymore,” Jemute explained. “In fact, it means I actually have a little more time to breathe, and to be a real father to my children.”
When Teresinha calved, her first born was a bull. She will soon pass this on to another program client. . Shortly after the bull was born, the family accessed artificial insemination services through the program to get Teresinha pregnant again, and this time she produced a female calf, who is now 5 months old. Afterwards, they used a bull stud service to impregnate her again, and she’s currently in-calf.
Looking Forward to the Future
While they cannot say the income from Teresinha’s milk covers all their needs, the couple notes that it minimizes their burden significantly. “Although we still find we need more money than we have, rarely do our kids go to bed hungry anymore.”
What’s more, Teresa is not only dreaming of building a large house to fit her entire family, but she’s nearly realized her vision. Construction is ongoing, and is nearly complete, and they are easily able to pay for their children’s school uniforms, and school lunches, so that they can concentrate better while studying. They are also setting a portion of their earnings aside to pay for the feed that Teresinha needs to remain healthy and productive.
She imagines things will only get better. “Where I once doubted myself, I can now envision a future where my female calf grows up and starts milking. That means in a year or two, I will have two cows, and then three. This will really put me in a great situation.”
For Teresa, the impact of the USDA-funded Mozambique Food for Progress program has truly been profound. “I was a person who had no hope, and I wasn’t even aware that this could be my life. But now, I really feel like a new Teresa, as a proud mother able to meet my household needs.
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.
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