Thursday, 30 October 2014

Financing Agricultural Growth In Africa

After years of neglect, banks, private equity funds and microfinance institutions are bringing capital to African agriculture
Africa’s agriculture sector has struggled to access the financing it needs for sustained growth. In part, a perceived combination of high risk and modest returns – as well as the costs of extending traditional banking infrastructures in rural areas – has deterred many banks and financial institutions.
“There can be failures in critical infrastructure such as inadequate cold storage facilities, unexpected disruptions in commodities trading, lack of adequate feeder roads to production areas, inadequate dry storage facilities, and congested ports prohibiting the export or import of products on time,” says Chomba Sindazi, director of Standard Chartered’s solutions structuring team for Africa. “And there can also be delays in the supply of critical inputs such as fertilisers, seed and fuel because of difficulties in getting goods to market. This is a particular problem in landlocked countries where it can sometimes take as long as four months to get the inputs to the required areas.”
Without tackling these constraints, and their knock-on effect on lending, talk of Africa’s green revolution is premature. But solutions are emerging at last, as banks, NGOs, micro-lenders, governments and investment funds make inroads into the continent, bringing much-needed capital to bear.
For large banks, Africa’s rural sector was long seen as a problem. Just 10 percent of Africans with only primary-level education – which is the majority of those in rural agriculture – have a bank account, rising to 55 percent for those with a post-secondary qualification. But rather than writing off this population, forward-thinking banks have sought to find new vocabularies to speak to them. Togo-based Ecobank has proven popular for its simplified language and procedures, which are more accessible to a wider range of customers than global banks.
Standard Bank, which has operations in nearly 70 countries worldwide, has also reviewed processes to suit the kinds of financial information more commonly found in the informal and small-scale sector. It has also broadened its range of services to include technical expertise for lendees. The combination of lending and advisory services is critical, helping the bank protect its portfolio, and helping customers gain credit and repayment track records.
Standard Chartered shows the same trend. Instead of looking to traditional collateral, Standard Chartered uses the value of the commodity being financed as collateral for input financing – as opposed to conventional mechanisms where collateral is secured through physical assets and balance sheets. According to Mr Chomba: “Risks associated with the cultivation of a range of soft commodities are mitigated through a customised multi-peril insurance policy, and operational issues are addressed through physical inspection and regular reporting by a team of independent specialised contract managers and insurance companies.”
The arrival of major banks bodes well for the efficiency of the sector overall. “Banks are interested in investing in businesses and entrepreneurs that are going to make money and are going to pay them back – either interest or return on some form of an equity. As businesses that are profitable come into the agricultural value chains, that is going to bring in the financing that will support those businesses,” says Gary Toenniessen, managing director at The Rockefeller Foundation.
Taking equity
Equity financing provides an interesting – and fast-growing – source of capital. According to the Emerging Markets Private Equity Association, total private equity capital raised for sub-Saharan Africa in 2012 was $1.4bn. Agribusiness is proving one of the primary draws. The Carlyle Group, one of the world’s largest private equity firms, made its first Africa play late last year, as part of a consortium that included Pembani Remgro Infrastructure Fund and Standard Chartered Private Equity.
The fund invested $210m in the Export Trading Group (ETG), a Tanzanian agribusiness with interests in 29 African countries. ETG, which manages both intra-African and global supply chains and has more than 7,000 employees, says the investment will enhance its ability to connect African smallholder farmers with consumers around the world. The capital will expand the company’s geographical reach while adding to the quantity and variety of products – which currently includes commodities ranging from sesame seeds and cashews, to rice and fertiliser.
Private equity can bring broader structural changes too. A part of the Carlyle consortium investment will go towards building infrastructure to allow processing to take place in east Africa. “Typically the margins in processing are much greater than they are in pure acquisition and distribution, so part of the capital will be used to put up processing facilities around the continent,” says Marlon Chigwende, managing director and co-head of the sub-Saharan Africa buyout advisory team at Carlyle Africa.
Other PE funds and investment actors are also showing a strong interest in African agribusiness. Phatisa’s African Agriculture Fund, which focuses on small and medium-sized enterprises, signed its first deal in 2012, backing Cameroon’s West End Farms. The same year, Morgan Stanley Alternative Investment Partners and Capitalworks bought out South Africa’s Rhodes Food Group.

Friday, 25 July 2014

Corporate Farmers Reality TV Show – By Akin Alabi | Olusegun Obasanjo Foundation

Corporate Farmers Reality TV Show – By Akin Alabi | Olusegun Obasanjo Foundation

Corporate Farmers TV Reality show by Olusegun Obasanjo Foundation



Akin Alabi is a young Nigerian,  inspired by food policies  adopted by H.E. Olusegun Obasanjo’s governments during his time as leader of Nigeria and the resurgence of interest in Agri-business. He  has come up with a unique concept to motivate more African Youth to venture into the Agro-Business arena via “Agrotainment -

As economic development in the African context has moved to secondary and service industries in recent years, the Abandonment of rural enterprise in Nigeria and other parts of Africa is growing by the day. Factors which make the young and old migrate from rural to Urban settings include Overpopulation, loss of interest in Agriculture, climate change (including drought and failed rains), poverty and insecurity.


 Corporate Farmers Tv Reality Show is the first to be developed in Africa as an “Agrotainment” platform whose mission is to lure the Youth back to the farm and bring passion for economic empowerment through agribusiness.

The inspiration for this project is in no small part to celebrate the living legend farmer, the only Agbeloba of our generation Chief Olusegun Obasanjo. It is our hope that the participants in the show will emulate Baba’s passion for agriculture. The concept was born to bridge the need to improve the Agriculture sector in the country in which both the Federal Government and State governments appear to be pursuing with dexterity, the growth of Agriculture through the AgricultureTransformation A g e n d a (ATA)·an initiative of the Federal Ministry of Agriculture and Rural Development under the ministerial leadership of Dr Akinwunmi Adesin

How it will work: 40 various youths in groups of 5 to 8 will be selected to live in the “Farm House” 3 months.


What will they do? : The project is scheduled to run for a period of one year broken down into 3 sections

First : registration, selection and Auditioning of contestants to choose the 40 young Farmers that will enter the farm house


Second Quarter: 40 contestants enters the farm house for a  period of 3 months to do Agriculture in another dimension via our Agricultural Technical team from IITA , Agricultural Society of Nigeria.  After which 5 will be selected as winner for the Corporate Farmers TV Reality show season 1.


Third Quarter: This period is the time to celebrate Agriculture in Nigeria and Africa through the first Nigeria Agrotainment Award to celebrate Farmers, youth, and Federal states who have contributed to the resurgence of Agriculture.

 Kindly follow any of our social media links for more info www.corporatefarmers.tv

Blogspot: www.corporatefarmers.blogspot.com

Facebook: https://www.facebook.com/corporatefarmerstvshow?ref=hl



Thank you
 
Corporate Farmers International Ltd
5th Floor OAK Business Schoool

Ogba, Lagos
2348029110482, 2348023295359
Kindly follow any of our social media links for more info
Blogspot: www.corporatefarmers.blogspot.com
Facebook: www.facebook.com/corporatefarmers
Website: www.corporatefarmerstvrealityshow.com
Thank you
Akin Alabi
Corporate Farmers International Ltd
Ogba, Lagos
2348029110482
- See more at: http://olusegunobasanjofoundation.org/oof_blog/corporate-farmers-reality-tv-show-by-akin-alabi/#.U9Jv9bH