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Old Mutual to invest in Nigerian real estate, agriculture

12 August 2016 Comments (0) Africa, Business, Latest Updates from Reuters

ABUJA (Reuters) – Anglo-South African financial services firm Old Mutual and Nigeria’s sovereign wealth fund on Friday signed agreements to set up two funds to invest in real estate and agriculture in Africa’s most populous nation.

Old Mutual and Nigeria Sovereign Investment Authority (NSIA) said they would jointly raise a $500 million fund to invest in real estate and another $200 million to spend on agriculture projects in Nigeria.

The West African nation is in the middle of its worst crisis in decades as a slump in oil revenues hammers public finances and the naira. Gross domestic product shrank in the first quarter and the central bank governor has said a recession is likely.

Chief executive of NSIA, Uche Orji, said both parties will each commit $100 million as initial commitment for the real estate fund and $50 million for the agriculture fund.

“We are looking at office towers, commercial real estate,” Orji said. “We are investing equity in agriculture. We are looking at farming with emphasis on export.”

Poor infrastructure and access to capital is a major bottleneck to growth in Nigeria, which has made diversifying its revenue base and reducing a huge import bill its top priority.

“The most important thing is infrastructure. The problem is that its cheaper to move goods from China to Lagos, than move it from Kano to Lagos and that’s because we don’t have the infrastructure,” Finance Minister Kemi Adeosun said.

Nigeria established the Sovereign Investment Authority (SIA) in 2011 with $1 billion of seed capital in an effort to manage oil export revenues.

The new funds, which will stay invested for up to 12-years, will target returns of around 20 percent, Hywel George, chief investment officer at Old Mutual said.

A successful real estate investment in Nigeria can earn an returns as high as 30-35 percent, while rental income yields in cities such as Lagos and Abuja can easily reach 10 percent, developers and estate agents say.

However, navigating through opaque land laws, corruption, a lack of development expertise and financing, a dearth of mortgages and high building costs will take courage and influential local partners.

 

(By Chijioke Ohuocha. Editing by Ulf Laessing and William Hardy)

 

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Strikes unlikely to curb Kenya tea output

11 August 2016 Comments (0) Africa, Business, Latest Updates from Reuters

NAIROBI (Reuters) – Several weeks of strikes by tea pickers in Kenya’s biggest estates in June and July are unlikely to disrupt production enough to warrant a change to the forecast for the year, the agriculture industry regulator said on Thursday.

Tea pickers were awarded a 30 percent pay increase by a court in June but went on strike when tea estate owners refused to pay, saying it would drive up costs and deter investment.

Tens of thousands of pickers in the major growing regions of Nandi and Kericho went on strike in protest. Pickers have since returned to work after the Labour Ministry brokered a deal allowing the award to be implemented in two phases.

The East African nation, the world’s No. 1 exporter of black tea, expects output to jump to as much as 450 million kg this year, thanks to good rainfall, from 399 million in 2015. Tea is one of Kenya’s top foreign-exchange earners.

“There is no change to the output forecast,” Alfred Busolo, acting director-general of the Agricultural, Fisheries and Food Authority told Reuters, adding that the impact of the stoppages was “minimal”.

The government is working to remove numerous levies and taxes on the tea industry to make its exports more competitive.

The labour stoppages had mainly affected big tea estates in the Rift Valley region, which account for 40 percent of production. The rest comes from small-scale farms.

 

 

(Reporting by Duncan Miriri; Editing by Edmund Blair and Dale Hudson)

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Beetles threaten Ugandan coffee crop

10 August 2016 Comments (0) Africa, Business, Latest Updates from Reuters

KAMPALA (Reuters) – Shrinking forest cover and climate change threaten Uganda’s coffee industry by creating conditions for the destructive black twig borer beetle to spread into plantations, an official said on Wednesday.

Africa’s largest coffee exporter, Uganda mostly cultivates the robusta coffee bean variety. Shipments of the beans are a major source of foreign exchange.

Exports in the 2015/16 (Oct-Sept) crop were expected to reach 3.6 million 60-kg bags, modestly higher than the previous period’s 3.46 million bags, according to state regulator Uganda Coffee Development Authority (UCDA).

But David Muwonge, head of marketing at the National Union of Coffee Agribusiness and Farmer Enterprises (NUCAFE), said prospects were clouded by the twig borer beetle which was increasingly migrating to coffee farms as forest cover shrank.

He said some farmers had reported losing as much as 40 percent of their potential harvest as a result of the beetle, although he did not give a forecast for the overall impact.

“The biggest threat to coffee in Uganda is … the twig borer,” he said.

The beetle thrives in the drier conditions which have become more frequent in recent years and which have been partly linked to global changes in climate, Muwonge said.

First detected in Uganda in 1993, the twig borer makes tiny grooves on the twigs – the small branches that bear cherries – of coffee trees and lays eggs there. It then infects the twigs with a fungi which causes the leaves and twigs to wilt and die.

A 2013/14 survey by UCDA found that at least 40 percent of all trees in robusta growing areas had infected twigs.

Muwonge said the beetle mostly lived in dense forests where natural enemies controlled its population. But smaller forests and drier conditions meant “some of the (beetle’s) natural enemies have been eliminated” and it was migrating to farms.

He said pesticides had only a limited impact and many farmers could not afford the chemicals.

“It’s an existential threat to our coffee because we don’t have a cure as yet,” he said.

British charity Oxfam warned in 2008 that changing weather patterns in Uganda could leave much of country unsuitable for growing coffee within 30 years if temperatures rose 2 degrees or more.

 

(By Elias Biryabarema. Reporting by Elias Biryabarema; Editing by Edmund Blair and William Hardy)

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Zimbabwe: Abuzz with beekeeping

4 August 2016 Comments (0) Africa, Business, Featured

zimbabwe bees

More than 50,000 bee farms operate in the southern African nation, providing a cash crop and encouraging forest protection.

Beekeeping represents a win-win for Zimbabwe: It is a cash crop for thousands of struggling farmers and it encourages preservation of the nation’s depleted forestland.

The Beekeepers Association of Zimbabwe estimates there are more than 50,000 bee farms flourishing in the southern African country and the number is growing. Beekeeping has become profitable thanks to high consumer demand for honey as well as beeswax. Bees also pollinate crops, helping increase food production.

Beekeeping serves another important purpose: giving farmers a reason to preserve their woodlands. In Zimbabwe, forests have been ravaged by tobacco farmers who use wood to cure their crops and by high consumer demand for firewood fueled by the country’s frequent power outages.

Tobacco farmers cut down up to one fifth of Zimbabwe’s 800,000 acres of natural forest each year, according to the government forestry commission.

Programs provide training

Zimbabwe’s Department of Agricultural and Extension Services provides training for would-be beekeepers as do a variety of nonprofit organizations, including the European Union’s Forest Forces project and the Ruzivo Trust.

According to the Trust, beekeeping can add stability to farms that are highly dependent on abundant rainfall, which is no longer a given as climate change brings drought to the region. The Trust set up demonstration projects and used a “learning by doing” approach to train 100 families in Goromonzi. Most of the families combine beekeeping with growing crops and raising cattle.

One new beekeeper is Divas Matinyadze, who maintains about four dozen hives in a dense patch of forest near Mpudzi.

Matinyadze, who was trained by the government, was a successful farmer of cotton and maize before he switched to bees in 2014. He said he makes up to $60 per hive during each of two yearly honey harvests, enough to buy food for his family.

Drought threatens production

Isaac Mamboza, a beekeeper in the Chipinge district, said he was part of a group of 25 farmers who started a local beekeeping project with hives in the trees near a local dam.

“Beekeeping can help us protect our forests,” Mamboza said.

However, the burgeoning beekeeping industry faces threats from drought and from another insect that kills bees.

The current drought in the region has cut honey production.

As weather becomes more erratic with climate change, harvest from rain-fed agriculture is increasingly vulnerable.

This year, the drought has left more than 4.5 million Zimbabweans without enough to eat, according to the government. The country estimates it needs at least $1.6 billion to feed the country.

Matinyadze said he delayed his spring harvest because there was so little pollen, adding that his crops have sustained much more damage from the drought than his bee hives have.

“Pirate bee” strikes

Another major emerging threat is the “pirate bee,” an insect that invades the entrances of bee hives and kills the bees. This forces the bees to hibernate inside their hives, meaning they are not outside collecting nectar to produce honey.

The pirate bee or cuckoo bee, along with water shortages, have forced beekeepers to cut back from three to two harvests per year, according to Nyovani Ndlovu, a beekeeper in Lupane.

Several other insects, among them beetles and wasps, also hurt yields during the production of honey by infesting hives and forcing bees out.

Cliff Maunze, who heads a Forest Forces team, said beekeepers are upgrading their hives to use a sticky substance to trap the pirate bees and other predatory insects when they land on the hives. Maunze said the project also plans to plant gum trees to increase the density of forests where the bees forage.

Despite the challenges, experts see beekeeping as an important game changer for agriculture in many parts of the continent.

“Honey production presents enormous potential for achieving food security in Africa,” the Ruzivo Trust said.

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WeFarm combines cutting edge ideas with simple technology

6 July 2016 Comments (0) Africa, Business, Featured

wefarm

WeFarm aims to help farmers around the world support each other through simple SMS connections.

WeFarm was launched in 2014, as a means of giving farmers – in very different areas – access to advice and information from other people in the trade. The idea was to connect people who had no internet access, in order to give them the opportunity to learn from each other, and help share vital information. The company’s slogan is: “The internet for people without the internet”.

Connecting the unconnected

With 500 million small-scale farmers across the world, offering a wealth of experiences and methods to draw on, peer-to-peer networking for this essential group of workers could be huge. CEO and founder Kenny Ewan spent 7 years working with many remote agricultural workers in Peru before he devised the idea.

Ewan explained what inspired his idea: “I was always very impressed with the unique and low-cost solutions farmers would come up with as solutions to their problems, (but) farmers living less than 20 miles away wouldn’t have any way to hear about these local innovations because very few people in rural Latin America and Africa have internet access.”

From here the WeFarm idea was born. Ewan approached his co-worker, Claire Rhodes, and the two quickly drafted out their plans. After winning grants from the Nominet Trust and the Knight Foundation, WeFarm began to pilot its service in Kenya and Peru.

WeFarm CEO and founder Kenny Ewan

Strength in diversity

While it might initially seem unusual to try and connect such different markets as Kenya and Peru, Ewan explains that a wide range of experiences is a strength for the system. Citing a recent example of a Kenyan farmer who wanted information on keeping rabbits, Ewan says, “He was able to ask questions and get information from someone who’d been keeping rabbits for 20 or 30 years on their farm. He was a farmer in Kenya. His question got answered in Peru.”

Once a farmer has signed up to the service, they simply text a question to the local WeFarm number, and WeFarm’s online system scans the question for keywords, before forwarding it to farmer profiles that seem relevant. A body of translators ensures that questions can be asked and answered in English, French, Spanish, and Swahili.

WeFarm had 33,000 Kenyan farmers signed up inside 10 months of launching, and within its first month in Uganda there were 5,000 Ugandan members.

Ewan hopes that by sending questions to both local and remote members, all those using the service can benefit greatly. “Farmers,” he noted, “can obtain both instant, relevant local knowledge as well as new ideas and insights from further afield.”

Growth for all

With over 5.2 million messages having already been sent, and with an average of 65% of all users contributing their own knowledge to the service, WeFarm is growing quickly.

The service is on the verge of launching in Tanzania and The Ivory Coast, but it also has plans far beyond these impending introductions.

There are planned moves into the markets of Rwanda, Ethiopia, India, and Brazil, with Ewan and his team currently raising $2.9 million in funding to drive this expansion.

As the database of information increases, so does the opportunity for the company to expand its positive influence. The beneficial information, that farmers can find ranges from more in-depth reports on market prices and products, to shared tips about adapting practices to climate change.

As the company grows, so does the proportion of farmers in the developing world who can grow their own business. Moreover, as everything at the user level requires no more than a basic cell phone, the penetration of the project far outstrips internet access.

Ewan says that some people were skeptical about farmers helping each other for no fee, but on the contrary their users embrace the chance to share their views. Ewan said, “It’s not just about the exchange of information; it’s also about empowering people to have their voice heard.”

As WeFarm continues to grow, a lot more of the farming world’s voices should soon be heard.

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Moroccan leased farmland attract $1.4 billion investment in 2015

13 June 2016 Comments (0) Africa, Business, Latest Updates from Reuters

RABAT (Reuters) – Private investments in Moroccan state-owned land leased to farmers and investors have reached 14 billion dirhams ($1.4 billion) at the end of 2015, a statement from the agriculture ministry said on Monday.

To attract foreign and local investors, the kingdom has been leasing farmland for 20 to 50 percent of its market value on long-term contracts of up to 40 years.

Morocco holds regular tenders as suitable state farmlands are gradually identified and made available.

About 111,000 hectares have been allocated in the last two years, the statement said, and the target is 500,000 hectares by 2020. Total farmland is estimated at about 7.8 million hectares.

Like other North African countries, Morocco is trying to modernise its farms to improve food security and avert the kind of price rises that contributed to popular unrest in Arab countries in 2011.

However, the North African kingdom still remains one of the World’s biggest wheat importers with volumes depending on local harvest.

The amount of investment attracted is 92 percent of the 15.2 billion targeted when the government stepped up the leasing programme to increase production and speed up modernisation of Moroccan farming in 2014.

The 14 billion dirhams investments include 4.7 billion dirhams in developing and equipping farmlands in general, 2.2 billion dirhams in vegetal production and 1 billion dirhams for breeding, the statement carried by the state news agency MAP said.

Morocco is expected to harvest a cereal crop of 3.35 million tonnes this year, down 70 percent from last season’s record 11 million tonnes after severe drought.

Rainfall was 43 percent less than an average year and 45.5 percent less than last season, which makes this the worst season in 30 years, with 98 dry days between November and February.

($1 = 9.6892 Moroccan dirham)

 

(Reporting By Aziz El Yaakoubi; Editing by Keith Weir)

 

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South Africa buys most U.S. wheat since 2011

20 May 2016 Comments (0) Africa, Business, Latest Updates from Reuters

CHICAGO (Reuters) – South Africa made its biggest purchase of U.S. wheat in nearly five years last week, U.S. Department of Agriculture data showed on Thursday, as drought reduced African grain output and low prices made U.S. supplies attractive in global markets.

USDA said South Africa bought 45,000 tonnes of hard red winter wheat, a variety used primarily for milling bread flour. The sale, for delivery during the upcoming marketing season beginning on June 1, was the first purchase of that variety since 2012 and the largest one-week sale of any variety of U.S. wheat since the week ended July 14, 2011. [EXP/WHE] [USDA/EST]

“It’s unusual and interesting,” one U.S. trader said. “HRW (wheat) is quite price competitive, and will garner business.”

Traders have been looking for signs of increased grain imports in South Africa, with the El Niño weather pattern contributing to blistering drought that was likely to cut their maize harvest by 30 percent and winter wheat crop by 18 percent.

K.C. July wheat futures, which reflect the approaching U.S. winter wheat harvest, tumbled to a contract low of $4.41-1/4 per bushel last week, enticing some buyers. Total sales last week of U.S. HRW wheat for shipment in the 2016/17 season were 293,932 tonnes, a marketing season high.

U.S. hard wheat export premiums have gained as demand improved, and as rains in U.S. growing regions could potentially delay the earliest phases of the harvest.

South Africa could purchase more high-protein wheat if prices stay low, another U.S. wheat trader said. “It’s a one-off sale for now,” he added.

 

(Reporting by Michael Hirtzer; Editing by James Dalgleish)

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Bamboo – Africa’s Green Gold?

8 May 2016 Comments (0) Africa, Business, Featured

Bamboo poles

Bamboo farming could provide many African states with a green and lucrative industry.

If you asked the average person on the street to name a country that they associated with the bamboo plant, it’s unlikely you would hear many answers other than China. However, Africa has extensive bamboo reserves that the continent could reap huge rewards from.

What makes the prospect of harvesting the continent’s bamboo reserves particularly exciting is that the benefits offered are not solely economic. While the bamboo would indeed provide a veritable gold mine of revenue to many nations, it is also an opportunity to try and slow down the deforestation that threatens Africa’s myriad environments.

Sustainable, clean profits?

The issue of deforestation is obviously not confined to Africa, but many African countries are particularly at risk from the environmental impact that the practice brings. Cutting down large areas of forest contributes to a cycle of drought and pollution, especially as it leads to soil erosion which has been a primary factor in some of the disastrous famines that the continent has faced.

What makes bamboo so much better? According to Dr. Chin Ong, a retired professor of environment science, bamboo holds soils together, utilizes less water than trees and offers a greater overall package. Ong told the New York Times, “You want firewood; you want to reduce erosion, to maintain the water supply, generate cash and employment. Bamboo comes the closest — it gives you the most things.”

Bamboo is technically a grass, which means after a harvest it regrows and does so quickly. In fact bamboo can grow an astonishing meter per day, and it absorbs almost twice the amount of CO2 that is taken in by a tree.

A crop that is rapidly replenished, reduces pollution levels and does not damage the fertility of soils when harvested is clearly an environmentalist’s dream.

But do the numbers add up on the commercial side? The short answer is yes.

The International Network of Bamboo and Rattan (INBAR) is an intergovernmental body that works with the UN and has valued the global bamboo trade at $60 billion.

Thus far, 18 bamboo growing African states have joined INBAR as they look to make the most of their natural resources without devastating the local eco-system to do so. According to the United Nations Environmental Program (UNEP), bamboo has over 2,000 uses and China claims that if the plant is processed, this number rises to 10,000!

Despite such a glowing profile, the industry has yet to really take off in the majority of the 36 African nations where it grows. Adal Industrial PLC is a company trying to raise awareness and interest to help develop Africa’s bamboo farming. CEO Adane Berhe summed up the current problem facing the bamboo trade in Africa when he spoke to CNN saying, “The farmer who has bamboo is rich, but he doesn’t know it.”

Ethiopia takes the lead

Bamboo cooperative members in Ethiopia

Bamboo cooperative members in Ethiopia

One African nation that is investing in the industry is Ethiopia. Not only is Ethiopia rich in bamboo, with 2.47 million acres of it untapped, but due to widespread deforestation, the government has taken drastic steps to promote sustainable harvests and green industries.

The government has banned producing charcoal from hardwoods and has welcomed investment from China and other nations seeking to grow the bamboo trade.

INBAR now has an office in Addis Ababa and local people and small farmers have embraced the opportunity.

State Minister for Agricultural and Rural Development, Mitiku Kassa says, “Ethiopia has the resources, the investment, a rapidly-developing manufacturing industry and a strong demand for our bamboo products…The expansion of Africa’s bamboo sector has begun.”

As Ethiopia’s bamboo industry begins to grow, the hope is that other nations take note and follow their lead. The early signs are promising as the membership to INBAR continues to expand with new African members; there is patently interest in what the plant has to offer.

China has already offered investment in Ghana and a recent bamboo project there opened up 1,500 jobs.

The chief research scientist at the Forestry Research Institute in Ghana, Andrew Akwasi Oteng-Amoako told IPS news, “We anticipate a revival of investment interest in Ghana’s bamboo industry in the near future thanks to Ethiopia’s success.”

With recent government decrees from Rwanda and Nigeria on the importance of looking into utilizing bamboo resources, the future of Africa’s “green gold” looks promising.

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Egypt to procure poultry locally following industry pressure

23 November 2015 Comments (0) Business, Latest Updates from Reuters, Middle East

CAIRO (Reuters) – Egypt will stick with buying its poultry domestically, turning its back completely on international tenders and bowing to pressure from its local producers, traders said on Monday.

The ministry of supplies said it will sign a protocol on Tuesday with the Egyptian Poultry Association to supply chicken at government cooperatives, just two weeks after holding its first-ever international tender for poultry.

Earlier this month the ministry said that Egypt’s state buyer, the General Authority for Supply Commodities (GASC) would import a broader array of essential items, including poultry and meat, in order to counter rising prices.

Egypt’s urban consumer inflation jumped to 9.7 percent in October on the back of rising food prices. Earlier in the month President Abdel Fattah al-Sisi said the government would take action to counter price increases.

GASC’s decision to tender for poultry upset local industry, which then offered to match the prices offered by companies that had submitted bids in the tender, one trader said.

Egypt’s local press reported last week that an offer from a U.S. company had been accepted to supply 500 tonnes of poultry, but GASC has yet to announce details of the deal, leading many traders to believe it would be canceled.

The decision to instead procure poultry locally raises questions over whether the importing body will be able to expand its mandate without running into fierce resistance from local industries that employ thousands of workers.

The ministry of supplies declined to comment.

 

(Reporting by Eric Knecht and Maha El Dahan, editing by William Hardy)

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Nigeria hopes to reach rice mill deal with China by year-end

20 November 2015 Comments (0) Africa, Business, Latest Updates from Reuters

ABUJA (Reuters) – Nigeria hopes to reach a deal with China within weeks to set up 40 rice mills, its new agriculture minister said, as part of plans to eliminate the need for any imports of grain within two years.

Audu Ogbeh said in his first interview since taking office last week that Africa’s top oil exporter wants to boost production of tomatoes, soy beans, nuts and plant two million cocoa trees to reduce an annual food import bill of $20 billion and create jobs for its impoverished youth.

President Muhammadu Buhari, who took office in May on a campaign to usher in a new era for a country hit by corruption and mismanagement, wants to boost the agricultural sector and end reliance on oil exports after a plunge in crude prices.

That will be an uphill challenge as pot-holed roads hamper the transport of goods. Nigeria has tens of millions of farmers but the vast majority of them work on a subsistence basis and live on less than $2 a day.

As a first step, the new government hopes to reach by year end a deal with China to import equipment to build rice mills, Ogbeh said late on Thursday.

“The federal government plans 40 mills with the Chinese spread across the country, each capable of milling 100 tonnes per day,” Ogbeh said.

He declined to give more details on the talks, which began under the previous administration led by President Jonathan. Chinese state media and a Nigerian government document obtained by Reuters have said the oil producer was talking to China’s state Import and Export Bank.

 

CHALLENGES

Ogbeh said Nigeria wanted to be self-sufficient in wheat in three years, confirming a Reuters report earlier this month citing a confidential government paper.

He said Africa’s biggest economy had a similar goal for cashew and cocoa, while the government also wanted to ramp up farming of soy beans, groundnuts, bananas and tomatoes within the next three years.

Nigeria produced 3 million tonnes of rice last year, along with 64,000 tonnes of wheat, United States Department of Agriculture (USDA) figures show.

But it still needed to import 2.3 million tonnes of rice in 2012  — a record high, according to the latest U.N. statistics which also show some 4.1 million tonnes of wheat was brought into Nigeria in the same year – nearly double the amount imported in 2000.

Ogbeh said he also had plans to improve Nigeria’s position as the world’s fourth largest cocoa producer by planting at least two million cocoa trees – in 27 of the country’s 36 states – annually for the next three years. The minister said the same number of cashew trees will be planted over that period.

To attract more young people into farming, the new government plans to retain a policy it inherited, through which farmers could receive central bank loans at a rate of 9 percent, as opposed to borrowing from commercial banks at around 18 per cent.

The prospect of little financial reward has led to the average age of a Nigerian farmer rising to around 65, said Ogbeh, since many young people find the work unappealing.

He also said he was in talks with the minister of education to allocate at least an acre of land to each of some 12,000 students at the country’s three agriculture universities during their studies to gain farming experience.

 

(By Alexis Akwagyiram and Felix Onuah. Writing by Alexis Akwagyiram; Editing by Ulf Laessing and William Hardy, Reuters)

 

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