investment Archives - MTFC | Meet The Farmers Conference - Nov 2019 - Dubai UAE

Is Africa truly ready for the Africa Continental Free Trade Agreement? Part 2

MTFC 2019 — Tue, 03 Sep 2019 11:46:58 +0000

From the previous post, we listed some of the challenges that the Africa Union need to tackle before enacting the Africa Continent Free Trade Agreement. Although the AfCFTA promises to boost trade among African countries, there is a need for the African Union and all stakeholders to take certain measures for efficient trade relations.

A major challenge is that most businesses encounter higher tariffs for exporting within than outside the African continent. The arduous visa requirements and export duties demanded across borders are enough to discourage intra-African trade. Building a trans-African highway network system will take years to complete but there has to be an efficient mode of transportation for intra-African trade to occur. If not properly addressed, there would be more goods than the means of transportation across the continent.

The high level of importation has left several African countries with negative trade balances. Shortage in the number of standardized manufacturing plants within the continent is saddening. Most manufacturing industries are either foreign-owned, redundant or cannot process very large quantities into consumable goods.

African governments have to invest heavily to resuscitate the production and manufacturing sector to create employment for the locals and ensure that quality goods are manufactured. Governments have to ensure that the manufacturing companies for the AfCFTA are not multinationals because it would be unfair competition to local manufacturers. The rules of origin can help prevent the transhipment of goods and foreign companies from taking advantage of zero tariffs.

Furthermore, there is an uneven distribution of populations amongst African countries. Some countries also have an unfair advantage of numbers over others in market size and landmass. These factors have to be considered before setting transactional and regulatory duties. There are concerns regarding uneven economic gains of the agreement such as tariff losses and the cost of adjustment to a competitive environment. Some countries, for example, depend solely on the fiscal revenues generated on tariffs, eliminating these would constitute a huge loss of revenue.

For smooth transactions between the countries, there would be a need for increased cooperation on rules of origin, harmonization of custom tariffs, trade facilitation and setting up phytosanitary measures regarding the standard of goods traded. There is a need for government sensitization so that citizens can benefit from the opportunities presented by this agreement. Business owners should also be aware of fraudulent acts and avoid exporting counterfeit goods from respective countries.

The concerns about the AfCFTA are genuine and have to be addressed for seamless trade facilitation within the continent. Pan-African financial institutions like the African Development Bank and the African Export-Import Bank (Afreximbank) are contributing their quota to foster trade-relations in the region. Afreximbank has set aside a $1 billion AfCFTA Adjustment Facility to enable countries to adjust to the sudden tariff revenue losses as a result of the implementation. These and more are essential for Africa to be truly ready to implement and enjoy the full benefits of the free trade agreement.

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Investment Opportunities in Africa You Can Tap Into

MTFC 2019 — Wed, 27 Feb 2019 17:42:38 +0000

When considering where to invest, it is important to note that Africa houses a lot of untapped resources and opportunities and it presents a rich diversity of exciting opportunities for foreign investors.

With a population of over 1.3 billion people and significant natural resources, many foreign investors are doing a lot to invest in Africa. There are 54 countries in Africa which are broadly divided into the Sub-Saharan Africa (SSA) and the Middle East and North Africa region (MENA).
Northern Africa countries are known for their extensive crude oil reserves, for instance, Libya is the eight largest reserve in the world and houses Africa’s largest oil reserves. Over 10% of all crude oil imported into Europe comes from Libya.

Why Africa?
According to the World Bank, the rate of returns on foreign investments is higher in Africa than any other developing region and it is quite apparent that Africa has a potential market untapped.
In spite of the recent global recession, Africa economies have shown sustainable growth over the past decade.

Return of Investment
Reports have shown that many foreign investors remain confident in the high returns of investment in Africa. Africa features among the World Bank’s listing of the ten fastest growing economies in 2018. There is a significant rise in the Gross Domestic Product (GDP) with countries like Ghana and Ethiopia topping the list at 8.3% and 8.2% respectively.

See also: Horticulture Business in Africa

Consumer Market
Africa has a booming population of over 1.3 billion people and according to the World Economic Forum, this figure will soar to 1.7 billion people in 2030 with ‘consumers and business spending’ hitting $6.7 trillion. It is advisable to invest now so that your business will grow alongside the continent’s population and spending prospects.

Agriculture
Agriculture plays a significant role in the economic and sustainable development of nations. It contributes up to 23% of GDP and employs an average of 55% of the population in Africa. Investing in the surplus variety of produce will generate funds through exportation. The total agricultural area in Africa is about 1.13 billion hectares. The weather is favorable and land is cheap compared to other parts of the world. Most of the landmass has been largely untouched and they have the capacity to produce both food crops and cash crops in large quantity. Agribusiness is on the rise across the continent and it promises a wealth of investment opportunities.

Information Technology
There is an increased integration of technology in finance, commerce, agriculture and other sectors in the continent. Software development firm Andela, which has offices in Nigeria, Kenya and Uganda, has accrued over $80 million in funding since its 2014 launch. There are so many fintech, ecommerce, agribusinesses and hubs fueled by advancements in technology.

Logistics & Transportation
There is a need for transportation infrastructure to aid intra-continent trade within Africa because of the underlying problem that is a debilitated transport system. Ride-hailing companies like Uber, Taxify, TaxiJet, Oga Taxi, Careem, Mondo Ride, Taxi Dali, ZayRide etc., are flourishing in Africa and this has brought about market competition. Uber alone has over 1.3 million riders in sub-Saharan Africa alone, and has extended its footprint to 15 cities in 8 countries including North Africa.

Also, forecasts reveal that the demand for trucking and haulage will double across Africa within the next 10 years as a result of increased economic commercial activities on the continent. Manufacturers need to get raw materials to the factories and the finished goods need to get to warehouses and ports. There is room for investors and growth in the transportation sector.

Nigeria Woos Foreign Investors To Bridge Tomato Production Gap

MTFC 2019 — Mon, 14 May 2018 12:31:11 +0000

Stakeholders in the Nigeria tomato industry have agreed to hold annual tomato investment roundtable, as part of the initiative to build –up more investment required to stimulate production active along value- chain in country.

Scaling –up investment in the sector, is believed would go a long way in generating activities that will address the current trend in which over 45 percent of tomato cultivated in the country are lost due to poor post-harvest management.

The stakeholders made this submission at a maiden edition of the Nigeria Tomato Investment Roundtable, held during the week, in the Dutse, capital of Jigawa State.

The roundtable which drew participants from within and outside the country, was declared opened by Muhammad Badaru Abubakar, governor of Jigawa state, and also had in attendance, Hafiz Abubakar deputy-governor of Kano state, among others.

Delivering a lead paper, Muhammad Sagagi, a Northern Nigeria based economist recall the growing market for fresh and processed tomato in the country, charging foreign investors to take advantage of the opportunity.

Sagagi, who is the pioneer, director –general of Jigawa State Investment Promotion Agency, disclosed that at the moment the country is able to meet only 1.8 million metric tons out of the about 3.5 million tons total national demand for tomato.

Also See: Crenov8 to Hold Meet The Farmers Satellite Conference in Ghana – #MTFCGHANA2018

He observed that due to various reasons local growers of the commodity are still finding it difficult to bridge the over 500,000 metric production gap currently existing.

“There is growing output gap and market for tomato in the country. At the moment 45 percent of the total output is being wasted due to poor post-harvest management. This wastage provides investment opportunity for willing investors.

“We also have the challenge of value addition, study conducted under GEMS4 activity, points to the fact that Nigeria needs about 124 Tomato Processing facilities across the states where the commodity is cultivated. This is another huge investment gap.

“In the same vein, the nation also have investment opportunity in the distribution area, as well as there are opportunities for commercial banks and financial institutions in area of financing enterprises ready to maximize opportunities in these sub-sectors” he stated.

Sagagi identified lack of competitiveness, poor investment climate, difficulty in sourcing funding, infrastructural constraint, as well as nature of land and agricultural practices, as some of the challenges hampering inflow of investment in the sector.

One of the highlights of the roundtable was a Panel Discussion on Private Engagement in the Tomato Value –Chain, moderated by Richard Ogundele, CEO, JMSF Agribusiness Nigeria.

The discussants drawn from various segment of the tomato value –chain, unanimously agreed that there is the need for the stakeholders to invest building the capacity of small- holder farmers, who are the major producer of the commodity.

The discussants also called on the government at all levels to boost investment in the area of infrastructure that would enable the small farmers to scale –up their production, as well as help organize the farmers into co-operative society.

In his address at the occasion, Tim McClellan, Chief Operating Officer, TechnServe Inc, the company that initiated the roundtable in partnership with Rockfeller Foundation, Syngenta Nigeria, Syngenta Foundation for Sustainable Agriculture based in Kenya, and Pyxera Global, disclosed that his company will continue to work with the partners helping Nigeria meet its agriculture aspiration.

The Nigerian Minister of Agriculture and Rural Development, Audu Ogbeh, as well as Minister of Industry, Trade, and Investment, Okechukwu Enelamah, were represented at the occasion.

Source: Business Day Online

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