Category: Business

Open letter to AU heads of state: Make agriculture a priority

Judging from the daily outpouring of commentary, opinions and reports, you would think that there were two African continents. One of them is the new land of opportunity, with seven of the world’s 10 fastest growing economies, offering limitless possibilities to investors. There is, however, this other image: a starving and hopeless continent, hungry and poor, corrupt and prey to foreign exploiters.

As Africans, we are tired of caricatures. But we are also tired of waiting. Waiting to be led toward the one Africa we all want: the Africa that can and should be. We know the real Africa, filled with possibilities, dignity and opportunities, able to face its challenges and solve them from within. Never has the time been more right for us to finally realise our full potential. It is within our grasp.

As a scientist, I am always interested in facts. Africa is a land rich in resources, which has enjoyed some of the highest economic growth rates on the planet. It is home to 200 million people between the ages of 15 and 24. And it has seen foreign direct investment triple over the past decade.

As the head of an institution whose business is investing in rural people, I know that you also need vision and imagination. At the International Fund for Agricultural Development we have banked on the poorest, most marginalised people in the world, and over and over again these investments have paid off. For people, for communities, for societies. And more than half of the people we invest in are Africans.

More than 10 years have passed since the Maputo Declaration, in which you, as African leaders, committed to allocating at least 10% of national budgets to agriculture and rural development – key sectors in the drive to cut poverty, build inclusive growth and strengthen food security and nutrition.

Today, just seven countries have fulfilled the Maputo commitment consistently, while some others have made steps in the right direction. Ten years is a long time to wait. In less time I have seen projects turn desert into farmland.

In Malabo at the 23^rd African Union Summit, I will join those of you, African leaders, who will gather to discuss this year’s focus of agriculture and food security. This is my call: Don’t just promise development, deliver it, make it happen now. Make real, concrete progress toward investment that reaches all Africans. Investments that prioritise rural people.

Our biggest resource is our people. To squander this is worse than wasteful. If we don’t act now, by 2030 Africa will account for 80% of the world’s poor. Is this the legacy that we want to leave for future generations?

The AU declared 2014 as the year of Agriculture and Food Security. And this is the year we look beyond the deadline of the Millennium Development Goals to a post-2015 world with new goals and targets to reach. I hope that this means that we will be dedicating ourselves fully to making agriculture a priority. GDP growth due to agriculture has been estimated to be five times more effective in reducing poverty than growth in any other sector, and in sub-Saharan Africa, up to 11 times. Ironically, it is countries that lack lucrative extractive industries and that have had to invest in agriculture who have found out what is now an open secret: agriculture not only improves food security but creates wealth. Small family farmers in some parts of our continent contribute as much as 80% of food production. Investing in poor rural people is both good economics and good ethics.

Farmers tend newly planted trees in Kimahuri, Kenya. (AFP)

A full 60% of our people depend wholly or partly on agriculture for their livelihoods, and the vast majority of them live below the poverty line. It’s not pity and handouts that they need. It’s access to markets and finance, land tenure security, knowledge and technology, and policies that favour small farms and make it easier for them to do business. A thriving small farm sector helps rural areas retain the young people who would otherwise be driven to migrate to overcrowded cities where they face an uncertain future. Investing in agriculture reinforces not only food security, but security in general.

In an Africa where 20 states are classified as fragile and 28 countries need food assistance, the need for a real rural transformation backed by investment and not just words is critical – I have often said that declarations don’t feed people.

Investments must be focused on smallholder family farms. Small farms make up 80% of all farms in sub-Saharan Africa. And contrary to conventional wisdom, small farms are often more productive than large farms. For example, China’s 200 million small farms cover only 10% of the world’s agricultural land but produce 20% of the world’s food. The average African farm, however, is performing at only about 40% of its potential. Simple technologies – such as improved seeds, irrigation and fertilizer – could triple productivity, triggering transformational growth in the agricultural sector. It is estimated that irrigation alone could increase output by up to 50% in Africa. Rural areas also need the right investments in infrastructure – roads, energy, storage facilities, social and financial services – and enabling policies backed by appropriate governance structures that ensure inclusiveness.

If we look at the countries that have met the Maputo commitment, we see that investing in agriculture works. Given that agriculture has become lucrative for private investors, and about 60% of the planet’s available uncultivated agricultural land is in Africa, there is no mystery why we hear about so-called ‘land grabs’. Opportunity draws foreign investors. There is nothing wrong with foreign investment. But it has to be managed, to the benefit of all.

What is a mystery is why, with such a vast potential and a young population just waiting for a reason to seize it, our African leaders do not announce that they will redouble their efforts to drive an inclusive rural transformation, with concrete commitments, that will make Maputo a reality. I hope that after the Malabo meeting, that will be a mystery no longer.

African economies have grown impressively. But it is time to stop focusing on GDP figures and instead focus on people. The majority of our people are engaged in agriculture, and the neglect of that sector must stop if we really want to realise the healthy, peaceful and food secure Africa that we know can be. It is not a dream; it is a responsibility.

Kanayo F. Nwanze is the President of the United Nations rural development agency, the International Fund for Agricultural Development.

10 years ago

Ethiopia’s Commodity Exchange: Brewing a win-win solution

Digital screens light up Ethiopia’s small towns, from Assela and Humera to Jima, displaying the real-time prices at the country’s central agriculture market, the Ethiopian Commodity Exchange (ECX). The ECX acts as an organised marketplace where buyers and sellers come together to trade, assured of quality, quantity, payment, and delivery.

Mohamed Abafogi, a farmer from the Jima area of Oromia state, lives more than 300km from the central market in Addis Ababa. Despite the distance, ECX provides Abafogi with the most up-to-date market information and prices, allowing him to sell his coffee beans at the nearby ECX delivery centre at a competitive price with prompt payment. Buyers collect beans directly from farmers like Abafogi at regional centres and transport them by truck to the nearest port, in Djibouti, for export.

“Today I am earning a far better income than before. I am selling my coffee to the people of ECX at a fair price. These days my children do not go to school with empty stomachs,” he said. Last year he was able to replace his straw roof with one of corrugated iron. “I am better off today,” said Abafogi.

ECX assures delivery to buyers and due payment to farmers. Seven years ago, a buyer who paid in counterfeit cheques cheated dozens of Abafogi’s neighbours. Dealers were able to dictate prices to farmers, as there was no competition.

Traders shop for deals at the Ethiopian Commodity Exchange in Addis Ababa. (Pic: AFP)

Samuel Mochona, ECX’s communications manager, said the market had opened up trade since its establishment in 2008 by the Ethiopian government. In addition to coffee, sesame seeds, mung beans, maize, wheat and peas are also traded.

“Before ECX was established, agricultural markets in Ethiopia had been characterised by high costs and high transaction risks. With only one third of output reaching the market, commodity buyers and sellers tended to trade only with those they knew,” he said. “This helped them to avoid cheating sellers and defaulting buyers.

Through ECX, buyers are assured of a quality product, with tests conducted of both raw and roasted coffee samples, while farmers are assured of payment. ECX also gives technical support to farmers, who must meet global quality standards for their coffee to be accepted,” added Mochona.

Thirty-three farmers’ co-operatives, representing 2.6 million coffee farmers, share 15 market seats in the ECX. This gives them permanent and transferable rights to trade on the exchange.

“I can confidently say that trends in this country vividly show that ECX is successful not only in increasing the income of the poor farmers from coffee sell, but contributes to general economic development,” said Abenet Bekele, ECX chief strategy officer. “At present, however, no calculations have been made of the net benefit to farmers.”

Coffee production
Around one fifth of Ethiopia’s population depends directly or indirectly on coffee production and trade. Coffee earned almost 25% of total foreign exchange in the country in 2012/3 and accounts for 2% of GDP, according to the Ethiopian Commodity Exchange Agency, the government body overseeing ECX.

“I don’t have words to explain the stark contrast in lifestyle in my family and my neighbourhood before and after the coming of ECX. Previously, I could only afford to send one of my three boys to school as the remaining two had to work. But now all are in school,” said Abafogi. He now plans to establish a flourmill, which will be run by his wife.

“Improvements in agriculture, like ECX, can make an enormous difference in the lives of smallholder farmers,” said Dr Sipho Moyo, Africa Director of ONE.org. She further explains that providing resources like these can boost farmer incomes and break the cycle of poverty and that investing in agriculture now could help lift tens of millions of people out of poverty by 2024.

In January, ONE.org formally launched the Do Agric, It Pays campaign, based on its report, Ripe for Change: The Promise of Africa’s Agricultural Transformation, which calls on African governments to implement an enhanced CAADP (Comprehensive Africa Agriculture Development Programme) framework.

The enhanced CAADP policies were developed after a lengthy consultation process with African farmers and farmers associations from all over the continent. The package of policy recommendations include eliminating the gender gap in agriculture, developing the value chain to benefit small holder farmers, and making time-bound commitments to spending at least 10% of national budgets on agriculture investments, amongst others.

Taddese Meskela, head of the Oromia Coffee Farmers’ Co-operative, says ECX plays a pivotal role in ensuring fair prices for farmers and supplying quality coffee to global markets.

“Our members’ income is continuously growing as they are getting due prices for their produce,” he said.

Girmaye Kebede for ONE.org.

10 years ago

Malawi’s prized chambo fish faces extinction

In the decade that fisherman Edward Njeleza has been trawling the deep, clear waters of Lake Malawi in Africa’s Great Rift Valley, he has seen his once abundant catch shrink by 90 percent.

Now he spends most days on the shore searching for pods and a special type of grass he uses to make necklaces, key rings and bracelets to supplement his income.

In the past, he and his nine fishing mates would on average catch roughly 300 kilograms (650 pounds) of fish a day, but that haul has dropped to no more than 25 kilograms, he told AFP.

“We go fishing but never come back with much,” said Njeleza, waiting by the lake with a bag full of homemade jewellery slung over his shoulder.

“And we don’t catch big fish.”

Malawian fishermen pulling up fish in their nets on the shores of Lake Malawi. (Pic: AFP)

Lake Malawi, one of the deepest in the world, is estimated to have the largest concentration of freshwater fish species – up to 1 000, according to the UN Scientific and Cultural Organisation (Unesco).

And a local favourite, the Oreochromis lidole or “chambo” as it is known in this landlocked southeast Africa state where it is a vital source of protein for millions of poor, is among the hardest hit.

In its last study on chambo, the International Union for the Conservation of Nature estimated in 2004 that the population had declined 70 percent over the previous 10 years, William Darwall, head of the IUCN’s freshwater biodiversity unit, told AFP.

Overfishing is the main cause, and scientists blame both a lack of government muscle to enforce seasonal fishing bans as well as environmental degradation.

“The primary reasons why the fish stocks, specifically chambo, are going down is overfishing, (and) degradation issues because of factors related to the effects of climate change,” said William Chadza, director of the Centre for Environmental Policy and Advocacy in Blantyre, the country’s finance and commerce hub.

Climate change is said to have affected rainfall patterns and caused a drop in the lake’s water levels, also hit by the effects of deforestation on tributaries feeding the lake.

‘Going towards a disaster’
In Makawa fishing village near Mangochi town in the country’s southeast, Njeleza has no choice but to diversify.

Apart from making jewellery, he hopes to bait the odd tourist visiting the lake into a ride in his blue and white boat, which he has named Wanangachi, meaning “What is the problem with us?”

At night he returns to fishing, but stays much longer than in previous years.

“We used to spend just about two hours out on the lake and come back with a boatload of fish – now we need about 12 hours, and bring back less than before,” Njeleza said.

Some officials fear chambo could face extinction in Lake Malawi.

“It’s a very big issue, and I think if we don’t do something … we could be in a dire state shortly,” Chadza told AFP.

But rangers say the fight to save the fish is a losing battle.

“We are not winning,” said Gervaz Thamala, chief of the Wildlife and Environmental Society of Malawi.

Laws to protect the chambo exist, but “the major problem which we have is governance,” Thamala said.

“It seems we are going towards a disaster, which is quite critical,” he warned. “Extinction is also a possibility because we have not fully developed the aquaculture sector, which could act as a buffer.”

Back at the lake, Dogo Morris leads a team of 10 fishermen pulling in their nets, cast six hours earlier, but their haul is only about 10 kilograms of fingerlings.

“I have nothing to sell today,” he tells more than a dozen would-be customers, who walk away dejectedly clutching their empty bowls.

Fishmonger Raymond Johnson, who supplies hotels and restaurants in Blantyre, Malawi’s largest city, has waited three days to purchase chambo, which he buys in bulk – hundreds of kilograms per trip to the lake.

“My business is not doing well. It has gone down by 40 to 45 percent,” said Johnson.

Back in Blantyre, restaurant owners share his despair, saying diners complain that the fish on their plates are getting smaller all the time.

Susan Njanji for AFP

10 years ago

African Wikipedia aims to preserve traditions and languages

Offline, off road and off the power grid, the forest village of Ndjock-Nkong in Cameroon is not an obvious choice for an online venture seeking to emulate the giant online encyclopedia Wikipedia.

It is, however, a perfect place for an online African “ark” that will collect and preserve the continent’s endangered languages and traditions, says a local man with a mission.

Gaston Donnat Bappa embodies the combination of old and new: he inherited the title of clan chief from his great-grandfather, grandfather and father but has 34 years of experience in computer technology. He hopes to bring the two worlds together in the user-generated African Traditions Online Encyclopedia (Atoe).

Gaston Bappa is keen to preserve Africa’s heritage. (Pic: Terry Morris)

“People think traditions don’t belong with information and communications technology (ICT) because traditions are so far behind us and ICT is so far ahead of us,” Bappa said. “But if you don’t know who you are, you don’t know where you are going.”

Bappa (56) is creating a site that he hopes will become the first port of call for African arts and crafts, food, laws, medicine, music, oral storytelling, religion, science, sport – anything that can be defined as tradition, dating back millions of years. A prototype is open for contributions, with early entries including Myths and Legends of the Bantu, and Concepts of Social Justice in Traditional Africa .

The idea grew from Bappa’s passion for beliefs and customs from a young age in his village, Ndjock-Nkong, where he has been chief for 22 years, as well as his travels to more than 20 African countries as a senior IT engineer and consultant and bank executive. Most urgently, he found in the web a chance to rescue a precious legacy on the verge of extinction.

“I saw that even in my tribe traditions are beginning to disappear. When I was going to other countries in Africa I saw it was the same. It’s not because young people don’t want to learn about them but because they don’t have the access in urban areas.”

Languages are a prime example, said Bappa, president of an association of 42 traditional chiefs. “Every week we lose a language in the world. Africa has more languages than any other continent – more than 2 000 – and every one has 30 to 50 tribes. If you lose the language it’s very difficult to know the traditions of your area.”

But the Atoe will guard against forgetting, he hopes. “ICT is the only way to store traditions for the next generations. Between now and 2100 there will be 4 billion people in Africa; if we don’t know our traditions, we won’t be able to manage our economic development. They can also be available to the African diaspora in America, Europe or anywhere in the world.”

The success of Wikipedia, whose English edition has more than 4.5-million articles, is a natural model. Similarly, the Atoe will use wiki applications for volunteers to input, change or remove content in collaboration with others. Noting that there are already more than 1 000 websites on African traditions, Bappa is adamant that content will be referenced and verified for accuracy.

“The Wikipedia format remains the best international standard for online encyclopedias: the entire software is free of charge and provides the best and easiest technology. But we will improve the format of content, by integrating more multimedia. For example, we will illustrate African traditional medicine with pictures.”

But unlike Wikipedia, born in 2001 and hosted by the Wikimedia Foundation in the tech hub of San Francisco, the Atoe’s headquarters will be starting from scratch. Ndjock-Nkong is 93 miles from Cameroon’s capital, Yaoundé, and 19 miles from the main road in thick forest, Bappa says. “To get there you need a very strong car.” There is no access to a phone network, the internet or the electricity grid for the dwindling population of fewer than 300. “Even radio reception is very difficult.”

Yet Bappa has a vision. He hopes to fit solar panels to generate power and install servers that will eventually host the Atoe. “Little by little, the government is starting to repair the road. In less than three years, we’ll have TV and radio. We will bring satellite internet to the village so it is connected to the entire world. When we have our own servers, we’ll transfer all the data.”

Until then, Bappa is operating from Yaoundé and working to raise worldwide awareness of the project, which he will formally unveil at next year’s eLearning Africa conference. He plans to approach Microsoft and other potential sponsors in an attempt to raise €400 000 (£323 000) for the initial phase. He also hopes to incorporate content from Wikipedia.

“It is not only for Africa,” he said. “It will be open to all worldwide, Africans and non-Africans. It is for the whole of humankind because Africa is the cradle of humanity.”

10 years ago

Africa’s women entrepreneurs take the lead

Madinah Nalukenge recalls the day she set out to sell food on the filthy edges of a bus terminal in the Ugandan capital in 2004. She had just $10 left over from a failed attempt to sell bed sheets.

Now she runs a catering business that makes a monthly profit of up to $3 000, a source of pride for the 34-year-old single mother who spends her days offering plates of mashed plantain and greasy meats to transport operators in downtown Kampala.

“There is a lot of money to be made here,” she said recently, her apron bulging with cash. “I need to stay focused.”

Her competition: More than a dozen other women operating food stalls next to hers.

Madinah Nalukenge serves dishes to customers at her food stall, frequented by transport operators, that she owns on the edge of a bus terminal in Kampala. (Pic: AP Exchange)

Nalukenge, who did not study beyond grade school, is part of a growing trend in Africa where more women are running businesses on a scale that was unthinkable a generation ago. Africa now has the highest growth rate of female-run enterprises across the world, according to the World Bank.

About 63% of women in the non-agricultural labor force are self-employed in the informal sector in Africa, more than twice the worldwide rate, according to World Bank data, which also shows that necessity – not opportunity – is the main driving force behind female entrepreneurship in poor countries. Women often start by running informal retail or service businesses, but those who are more ambitious have created thousands of jobs in projects that break stereotypes about what women can do, physically and socially, in societies that are still largely conservative.

“Traditionally women would sit at home and wait for the man to return home with a bag of groceries, but this has been changing over time as women’s dependence gradually reduces,” said Thomas Bwire, an economist with Uganda’s central bank. In a sign of the times, he said, Ugandan women now even work at road construction sites.

There are more women than men working in the informal sector in all of sub-Saharan Africa, according to the International Labor Organization. The UN agency’s most recent survey, released last year, noted that this is unlike other regions, including South and East Asia, where informal employment for women tends to be concentrated in home-based, domestic work.

Some of the food vendors in downtown Kampala have remarkably similar accounts of what sparked their entry into private business: Hungry children, unpaid rent and some violent partners. Most of them have long been single or were recently in failed relationships, an important detail because many insist their businesses are succeeding in part because of their independence on the home front. Many of the vendors have also enrolled their children in boarding school to make more time for work.

“They don’t help and they never want to help,” Nalukenge said of her former partners. “Yet even the little you get they want to take away from you. I was alone when I started this business.”

Force for economic growth
Development economists note that if more women are helped to join the labor force, especially through access to credit, they can be a powerful force for global economic growth.

A report released earlier this year by the investment bank Goldman Sachs urged what it called “giving credit where it is due,” noting that women’s “increased bargaining power has the potential to create a virtuous cycle as female spending supports the development of human capital, which in turn will fuel economic growth in the years ahead.”

An estimated $300-billion credit gap exists for female-owned enterprises, according to the International Finance Corp. of the World Bank, which in March launched a $600-million fund to finance women-owned businesses in the developing world. The venture – dubbed the Women Entrepreneurs Opportunity Facility – aims to work with local banks in sharing risks and extending credit to 100 000 women entrepreneurs.

Across sub-Saharan Africa, where poverty remains extreme in many parts, stories of successful women entrepreneurs are accumulating. A Kenyan woman, Mary Okello, is feted for starting, inside a three-bedroom house, what has since become a prestigious group of private schools. In Rwanda, Janet Nkubana has been recognised abroad for running a handicrafts company that employs more than 3 000 women whose baskets can be purchased at Macy’s. The Nigerian Adenike Ogunlesi is famous for her “Ruff ‘n’ Tumble” clothing line for children, a business that she first operated out of a car trunk.

In Uganda, where most of the food is grown locally, many women have been drawn to catering, and their food stalls are ubiquitous at transport terminals and open markets. Unable to get credit from banks, often the women start “cooperative” groups in which they pool savings. Then they take turns getting loans.

“The few who have ventured out have surprised themselves by succeeding,” said Ugandan economist Fred Muhumuza, who has been advising Uganda’s government on development policy. Rampant poverty, he said, is driving women to find ways of taking over “core family responsibilities” from men.

Nalukenge, the food vendor in downtown Kampala, said she has kept her children in school and now owns two small plots of land.

On a recent evening, as she prepared to clean up and pack her saucepans, she pondered her unlikely journey from failed hawker of bed sheets to successful caterer with a long line of loyal clients.

“We spend a lot of energy here,” she said. “There’s no resting. But at the end of the day we get our reward.” – Sapa-AP