World Bank Invests U.S.$300 Million in Ghana Cocoa Industry

The World Bank is set to invest $300 million in Ghana's cocoa industry to shore up production of the crop over the next five years, a Senior World Bank Agricultural Economist, Amos Gyau has announced.

Under the Cocoa Sector Value Chain Project, the initiative is to increase productivity levels of cocoa farmers as well as promote value addition.

Gyau explained that the government had approached the World Bank to support the country to increase her cocoa production and thus the World Bank and government as well as Cocoa Board was discussing the modalities of the project.

He said the objective of the project was to help farmers increase their production levels from the current 300 kilogrammes per hectare to two tonnes per hectare over the period.

"The World Bank seeks to support the cocoa sector to double productivity in the next five years," he said, through the provision of better seedlings and inputs to farmers, hand pollination and educating farmers on best agronomic practices.

Dr Gyau also intimated that the annual value of the world cocoa trade amounted to about $9 billion and only 7 per cent got to the cocoa producing countries because the cocoa produce was exported in its raw state to the world market, saying it was to reverse that the World Bank intends to finance the Cocoa Value Chain Project.

Full article...

Why Ghanaian Banks Neglect Financing Smallholder Farmer

...they are simply lazy thinkers, expecting foreign guarantors to provide them 100% cover before they commit to agri-lending.

...international donor institutions have previously given incentives for agricultural value chain financing, but only to banks lending to medium to large agribusiness, with smallholder farmers merely tagged on as outgrower suppliers.

Full article...

South Africa: Difficulties Of Financing Farmers During Drought

Commercial banks in South Africa face enormous credit risks due to agricultural producers defaulting on loans and being increasingly unable to provide security for loans.

... 61% of the approximately R160 billion (1US$=14.8ZAR; June 2019) in farming debt in South Africa was owed to commercial banks...many farmers were unable to repay their loans due to failed harvests, ever-increasing input costs, and low livestock prices.
“Agricultural land is typically offered as security by a farmer when applying for credit and a mortgage bond is [then] registered on the property. Decreasing value of agricultural land and the uncertainty about loss of ownership [due to land expropriation without compensation], negatively impacts the value of the collateral held by banks.”


Besides having outstanding debt, defaulting farmers would no longer have access to loan facilities for planting or rebuilding livestock herds.

Many emerging farmers did not own land to use as security for funding, and the limited capital they have would, in all probability, be “swallowed up” during a drought.

Many farmers had left and would continue to leave the sector in search of more lucrative and less risky business opportunities.

Full article

South Africa's Land Bank to reduce lending rates

South Africa's agriculture minister announced in mid October that the country's Land Bank would extend a special loan interest rate of the prime lending rate minus 5% to both small scale and large scale farmers. 


more...Business Day

Indebted Nambian grape farm faces liquidation

Among other debtors it presently can't pay, Komsberg Farming owes the Agricultural Bank of Namibia N$133 milliion (US$15 million).

Komsberg Farming grows grapes and dates for export on a 33,000 hectares estate. The company was placed under provisional liquidation in July after it was found to be “factually and commercially insolvent.”

The company disputes the amount owing to Agribank, and pleads that there are investors who are willing to inject capital into the floundering operation.

Agribank has filed to join the earlier liquidation suit against Komsberg Farming by Louis Group South Africa, another unpaid creditor. The company also owes unpaid taxes.

African Agriculture

Trying to make sense of the African Development Bank’s muddily explained ‘fund of funds’ for agribusiness

Chido Makunike

The African Development Bank issued a statement on May 30 about its new ‘Initiative to Invest in Agribusiness in Africa.’

I saw the message heading of the Press Release in email inbox and reacted with interest and excitement. After all, although there is a tremendous amount of talk about availing more funds to African agriculture, the money that actually gets to the ground is a tiny percentage of the talking.

While now skeptical about announcements of new funding schemes, the email heading nevertheless piqued my interest. The AfDB is not a retail lender, but does get involved in various national-level interventions that means when it has a new scheme to roll out, it could be important to the affected sector in participating countries.

However, on reading the Press Release, not only did I not understand what its ‘Fund of Funds focused on agribusiness investments on the African continent’ is about, I went back to my usual cynicism that this is yet another of a long line of announced plans that will mean little or nothing to the average person or company working in agriculture in Africa.

To try to illustrate the reasons for my skepticism, let’s go through the AfDB Press Release together.

‘ARUSHA, Tanzania, May 30, 2012/ -- The African Development Bank Group (AfDB)  launched today, at the AfDB Annual General Meetings, a Fund of Funds focused on agribusiness investments on the African continent. This transformative initiative will address growing food security concerns and unleash the largely untapped potential of the African agriculture and agribusiness.’

Normally one would expect the first brief paragraph to not only explain what took place and the potential significance, as this one does. One would also expect that there would also be a description of what ‘this transformative initiative,’ the Fund of Funds, actually is!

Maybe their just whetting our appetite; saving the explanation for the second paragraph. Let’s not get prematurely impatient; lets read on, the AfDB is sure to soon make everything about this no doubt exciting new initiative crystal clear.

‘The launch of the initiative comes as African agriculture and food security gain increasing prominence on the global agenda, with the recent G8 Summit in Camp David pledging to promote investments in sustainable agriculture on the continent.’

Nothing yet about what the AfDB’s ‘Fund of Funds for agribusiness’ is yet. However, the G8 summit mention, before the elucidation of what the new scheme is, makes a certain cynic suspect that the AfDB is simply looking forward to getting some of the service charges and commissions from parceling out the monies it is hoped will be flying around from the G8-announced Alliance for Food Security And Nutrition.

The AfDB specifically wants us to know that its chief executive, whose photo is for some unclear reason included in the Press Release, taking up space that could have gone to provide a little more relevant and clarifying information, was actually in attendance at the prestigious meeting.

‘Speaking from Camp David,’ the AfDB statement tells us, ‘AfDB President Donald Kaberuka stated: “There was broad consensus that it is the right thing to do…” blah blah blah, waffle waffle waffle.

Mouhamadou Niang, an AfDB’s official, is quoted in the statement as saying some syrupy sweet things about the G8’s initiative. In the lush praise for the G8 we learn, in an almost incidental way, that the AfDB is the initiative’s ‘sponsor,’ whatever that means.

‘‘The Fund of Funds will be in compliance with a state-of-the-art environmental and social management system, currently being developed by AfDB in cooperation with the WWF (World Wildlife Fund.)’’

The WWF is referred to as the ‘environmental advisor,’ but it is not clear whether it is advisor to the G8 food security initiative, advisor to the AfDB’s Fund of Funds, or to both. And although we have been told how well it will be environmentally and socially managed, we still haven’t been told what the Fund of Funds is or what it will actually do.

However, we are given some tidbits, some small hints, as if it was a crossword puzzle to which you are given clues, but are expected to put the words and themes together yourself.

Here are those clues: ‘‘The initiative is in line with AfDB’s strategy to support private sector development on the continent... will catalyze investment into the agribusiness sector with the ultimate goal of inclusive job creation and promoting innovative, environmentally sustainable approaches throughout the agribusiness value chain.’’

Yes, but how will it accomplish all these politically correct, very noble goals that everybody talks about?

When the statement says it is ‘the first initiative of this nature on the continent,’ apart from simply being told that by the AfDB, how can we decide for ourselves if this is something new under the sun when we are not told what it is; who it is targeted towards, how it will work?

Is the AfDB’s briefly-worded and yet long-winded, unhelpful, uninformative statement simply a way of saying that thy have positioned themselves as middlemen to receive and then pass on (minus the usual service charges of course!) some of whatever money may actually end up in Africa as part of the G8’s newly announced agriculture support initiative? If so, how would that be new and different?

It’s possible that cynicism about the AfDB’s Funds of Funds is uncalled for and unfair. Maybe the person who wrote the Press Release did not try to put himself or herself in the shoes of the recipients, and instead wrote it as if it were a memo to AfDB colleagues who already have all the inside information a distant reader could not be expected to have.

Either that, or the statement was written to be purposefully as confusing and uninformative as possible, because the AfDB Fund of Funds is merely the umpteenth purported finance initiative that will fail to address the real challenges faced by African agriculture, but will certainly still be eagerly looked forward to and benefit certain strategically-positioned ‘stakeholders!’

The more words are spoken about addressing the basic problems of African agriculture, the more things stay largely the same.

I have read the statement they kindly emailed to me several times, but I still don’t have a clue what the African Development Bank’s Fund of Funds is. Perhaps it will turn out to be a wonderful new initiative that actually plugs the many gaps in funding that is relevant to the bulk of Africa’s agriculture, but it is impossible to tell from the statement as written.

However, not all was lost. I am pleased to end on a positive note, by mentioning that AfDB president Donald Kaberuka looked very smart and dashing in the photo that was embedded in the statement.

I assume a good time was had by all at Camp David.

African Agriculture

The Standard Chartered Bank report that tells us absolutely nothing new about agricultural financing in Africa

Chido Makunike

Lack of a viable finance model for African agriculture is a perennial, seemingly unsolvable problem. Lots of talking is done at the problem, but examples of actual initiatives to devise innovative, workable solutions are few and far in between.

Now comes the millionth report telling us what we all already know: Africa 'will miss 'the opportunity to capture a significant share of global trade if financing issues are not resolved quickly!'

That is one of the conclusions of a report by Standard Chartered Bank entitled 'Appropriate Working Capital Solutions for the Agricultural Sector in Africa.'

Just from its key finding, one suspects that the prestigious bank's report has absolutely zero that is new or particularly helpful in it. The issue of the paucity of agricultural finance in Africa has been studied in conferences, workshops, books, PhD. theses and in countless other ways. One would think a bank like Standard Chartered would be bringing new proposals to the table on what to do, or better yet, to actually try some new models of lending to African farmers and other practical, non-armchair agriculturalists-you know; the ones actually 'doing' agriculture rather than the ones who noisily just talk about it.  

Alas, that might be too much to expect from a traditional, old-model bank like Standard Chartered.

The problems are well known and don't need going into in any detail here. Most African farming is made up of small-scale family holdings. Most don't have title to the land they live and work on, nor do many have the kind of collateral banks would be interested in. Being mostly rain-fed, most African farming is particularly vulnerable to the uncertainities of climate and cannot be (commercially) conducted on a year-round basis. And so on and so forth. What are required are governments and financiers who, knowing these difficult problems, are still able and bold enough to proffer finance models that are appropriate to the situation.

That is where the many mindset problems begin. Old-model institutions with deep roots in the Western banking tradition like Standard Chartered will gingerly dip their toes where there are vaguely Western-style farming conditions, but that is small agricultural sections of a just a handful of countries: South Africa, Kenya, Zimbabwe before 'Mugabe's land grab,' etc. Commercial farming that banks feel relatively comfortable with is beginning to be aggressively developed in countries like Ethiopia, Ghana and a few others.  

The problem is that this still excludes the overwhelming majority of African agricultural producers. There are beginning to appear scattered reports of new, mostly local banks that are prepared to think 'outside the box' about the challenge of lending to small scale producers, but they constitute a tiny fraction of the need. A greater number and variety of new 'non-traditional lenders' is also a welcome, fairly recent development, but one that  does not come close to plugging the finance gap.

The author of Standard Chartered Bank's report is quoted as saying 'financial institutions will have to become more innovative and work together with national governments, development organisations and NGOs to help Africa achieve its potential in the agricultural value chain.'

As if this has not been known for ages! What a waste of time of a report.

African Agriculture

If you have an agro-investment in southern Africa, are you automatically equipped to operate in western Africa?

by Chido Makunike

From the Business Day Online (Nigeria) of 6 April 2012, under the heading 'Nigerian agriculture to benefit from equity deal: '

''Zeder Investments Limited, a South African listed agricultural investment company, is committing $46.7-million to acquire and expand an agricultural business, Chayton Africa, which is focused on primary production.''

So far so good. We are then told that Chayton Africa has made investments in Zambia since 2010 and now ''it is thinking on moving on to cocoa-rich west African regions, e.g. Nigeria, Ghana and Cote d’Ivoire.''

In what reads like script taken from the written-about company's public relations release or website, Business Day Online informs its readers that Chayton Africa ''produces 10 percent of Zambia's soya and 5 percent of the country's wheat.''

Such loosely thrown-about statistics can hide as much as they reveal, and would anyway be impossible or very difficult to independently verify. For the purposes of this post, let us assume that its ''acquired six farms totalling just over 4,000 hectares with 1,250 hectares being farmed, and 430 hectares under irrigation'' do indeed account for Chayton Africa's purported significant footprint in Zambia's agricultural economy.

For some who don't know any better, or have to rely on popular, stereotypical (sorry; no offense, but nvariably Western) media, Zambia and Nigeria would obviosuly be part of the same messy but now opportunity-though-danger-filled, armophous and fairly uniformly similar blob called 'Africa.'

So therefore, it would seem to make perfect sense that once having acquired some going farms in Zambia, it would not be a big deal to look for opportunities in West Africa, a mere 4000 kilometers away. If one can acquires some soya and wheat farms in Zambia, what could be the big deal about acquiring or starting cocoa farms in Nigeria, Ghana and Cote d’Ivoire? Big deal-it's the same Africa, innit it?

These are rhetorical questions beyond the scope of a blog post like this to attempt to answer. However,  they are absolutely fundamental, necessary questions to ask for the type of investor who gets more excited by gold-rush, herd mentality-type hype than by common sense and prudence. Recently there seems to be even more of the former than the latter. Investors seem to be in not just a land rush, but also in a rush to outdoor each other in almost casually tossing about figures of the millions or billions they are investing in African agriculture, and the vast returns they will easily, obviously, quickly reap.

Sure, Zambia is on the same geographic land mass as are Nigeria, Ghana and Cote d’Ivoire. And yes, given the vastness of the African continent, the history of migrations and the barriers that increased with colonial fragmentation, there remain some astonishing commonalities amongst African peoples/cultures/nations, even those spatially far apart.

But it is also true to say that there are important ways in which southern Africa and western Africa are two vastly different worlds. They differ in a manner (beyond the scope of this post!) that should be of concern to any investor said to be ''thinking on'' transposing their business experience in one region to that in the other.

Speaking generally and loosely, I would say an investor/business entity from southern Africa to western Africa, or vice versa, should give themselves from three to five years to just get a good grip of the differences, how they might impact on their prospects of success, and what modifications in thinking/attitudes/strategy are required to avoid certain failure.

But surely, seasoned agricultural investors from South Africa would be much better equipped to understand this and do the necessary 'due diligence' and preparation than those from say, the U.S., Europe or elsewhere outside the continent, whose general 'Africa learning curve' would presumably be much, much steeper? Wouldn't they?

Perhaps, but far from at all necessarily so (sorry, beyond the scope of this post).

Chayton's diversification to West African cocoa from Zambian soya and wheat is still at the 'thinking on' stage. One reader wonders why not just do that 'thinking on' privately, quietly rather than expose yourself to possible embarrassment if the plans don't materilalize, or even if they do but then fail because you only find out later just how vastly different doing business in one part of Africa can be from doing it in another part 4000 km and a veritable world/planet away?!

There is a question that often comes to mind on reading splashy investment multi-million dollar 'investment' announcements that on closer inspection are at no more than the 'thinking on' stage, or are at the very beginning of implementation. Given the very many new things that will have to be learned about operating in a new country/region/culture/environment, particularly in a sector with its own peculiar subset of high risk such as farming, why do so many investors jump the gun? Why not instead begin your investment away from the limelight, quietly going through the inevitable initial years of mistakes and/or failures, and only then surprise the world with the announcement (if necessary) of your first successes?

Of course, the need to engage in some high profile hype to entice investment funds is understood. But a severely under-reported but now emerging phenomenon of the recent wave of African agriculture investment fever is the number of high profile investment groups who appear to have more fund-raising ability than basic common sense, inquistiveness and humility.

However, no doubt the people behind Chayton Africa have or are pondering the huge, vast differences between growing soya and wheat in Zambia, and entering the cocoa production sector in West Africa, or vice versa for any other investor for that matter. At least one hopes so for the sake of their funders!!!

African  Agriculture

    

World Bank-funded Africa agricultural projects among those criticized on sustainability grounds

The Bretton Woods Project describes itself as ‘Critical voices on the World Bank and IMF.’

In an early February article, it highlights some of the evaluations of World Bank and IMF-funded agricultural projects in various parts of the world.

A think tank based at Tufts University in the US is quoted as concluding, "On the positive side, the Bank reasserts the importance of agriculture for development" and "also recognizes the prevalence of market failures in the sector." However, overall, the report argues that the Bank's initiatives "are too heavily focused on improving access to liberalized markets and promote the expansion of high-input agriculture rather than
a transition to more sustainable methods."

The Compliance Advisor/Ombudsman (CAO) is the World bank’s internal projects evaluation body. It criticized lack of attention to issues like community water rights, gender issues; as well as environmental and social sustainability in a number of projects it funded across the world.

In Uganda, two NGOs submitted complaints to the CAO that a World Bank-funded forestry investment through a private equity fund had "forced evictions and displacement" and raised "broader concerns about the due diligence surrounding the project."

Media reports in January said the controversial Ugandan timber investment by London-based New Forests Company had been suspended as the company’s financiers pulled out over the negative publicity surrounding the project. Among the sources of funds that was said to have dried up was a facility from the International Finance Corporation, the World Bank’s private sector investment arm.

The Oakland Institute (OI) has been shrilly vocal in criticizing ‘land grabs.’ One of its reports, on the World Banks role in large scale agribusiness land deals by foreign investors, is quoted from by the Bretton Woods Project.

Says the December 2011 OI report, "By promoting investor access to land, [the Bank] actually tends to threaten rather than improve food security and local livelihoods in developing countries." The briefing also details how the Bank has become an increasingly active proponent of investment by private equity funds in this area.

The Bretton Woods Project then summarizes the criticism by a gender rights organization of what it felt was the World Bank’s failure to integrate gender in the conception and implementation of projects in Ethiopia, Haiti and Kenya, thereby serving to “perpetuate women's marginalization in an industry [agriculture] for which they provide the majority of labor."

African Agriculture

Liberia receives $25 million loan for cocoa, coffee sectors

The International Fund for Agricultural Development (IFAD) will provide a US$24.9 million loan to the  Liberia to improve food security and reduce post conflict poverty in rural communities.

The loan agreement for the Smallholder Tree Crop Revitalisation Support Project will aim to increase the incomes of cocoa and coffee producers by raising the quantity of produce sold.

The project will revitalize 50 per cent of existing plantations and restore 315 kilometres of rural road networks to improve access to market centres for more than 280,000 people. In addition, the project will strengthen both the private sector and extension services to smallholder farmer cooperatives by the Ministry of Agriculture.

The project will reach out to the most vulnerable rural farming households in Lofa County, where the highest number of smallholder cocoa and coffee producers live; most of Liberia's poor people live in this area. More than 15,000 smallholder cocoa and coffee farmers, of which half are women, will benefit directly from the project.

With this new project, IFAD will have financed 5 programmes and projects in Liberia for a total investment of $38.3 million benefitting 30,000 households.

International Fund for Agricultural Development

Lesotho: new financing aims to help rural farmers

The United Nations agency that works to improve the lives of the world's rural poor is providing $10 million to help small farmers in Lesotho boost agricultural production.

The agreement signed in Rome between the International Fund for Agricultural Development (IFAD) and the Government of Lesotho comprises a $5 million loan and a $5 million grant to increase market opportunities for smallholder farmers and improve production in four of the tiny nation's 10 districts.

Over 70 per cent of Lesotho's population lives in rural areas, according to a news release issued by IFAD, which adds that more than three quarters of them are involved in agriculture.

Lesotho's rural population has been hit hard in recent years by a steady decline in remittances from migrant mine workers in South Africa, a major source of cash for purchasing agricultural inputs or making other necessary investments.

About 15,000 rural households are expected to benefit from the project, the latest in a total of eight programmes and projects IFAD has financed in Lesotho for about $60.3 million.

For over three decades, IFAD has invested about $13.7 billion in grants and low-interest loans to developing countries, empowering about 405 million people to break out of poverty and to create vibrant rural communities.

UN News

Nigerian government, banks to fund fertilizer, seeds supply

by Sunday William & Olayemi R. Ibrahim

The Nigerian federal ministries of finance and agriculture on 29 Nvember signed a 30 billion Naira (1 US$ = 161.71 NGN; December 8 2011) worth Memorandum of Understanding (MoU) with commercial banks in the country for the supply of fertilizers and seeds to farmers in the coming 2012 farming season.

Speaking at the signing of the tripartite MoU between the ministries and the banks, Minister of Finance, Ngozi Okonjo Nweala said the objective was to grow agriculture so that Nigerians could have cheap food on their tables, provide jobs for millions of young people and also achieve food security which is becoming increasingly important in today’s world.

Okonjo-Iweala gave a breakdown of the loan indicating that N22.6 billion is earmarked for financing fertilizer, N2.7 billion for seeds procurement and the balance for agro-dealers in which each of them would be entitled to N3 million.

She added that the loan shall be made available to registered agriculture input dealers across the six geo political zones at a subsidized interest rate of 7 percent per annum with the Ministry of Finance guaranteeing 70 percent of the loan principal payment.

It is envisaged that the partnership will ensure that at least 500, 000 farmers would have access to the agriculture input and the initiative to create about 3,500 jobs and also generate 20 million metric tons of food.

The minister said the Growth Enhancement Support (GES) programme, which is private sector driven and being supported under the financing arrangement with the government guarantee covering 70 percent of the total loan (about N17 billion of the loan amount) replacing the old inefficient fertilizer system that was led by the government.

The Minister of agriculture  Akinwumi Adesina said the role of the government was to provide enabling environment for farmers and not to procure and distribute fertilizers adding that the federal government believes that agriculture is not a government development project but a business.

“Fertilizer is like other commodities in the market, if you can get coca-cola in the market you can also get fertilizer without any problem,” he said.

The chairman of bankers association of Nigeria, Aigbojie Aig-Imoukhuede said the loan will be available over the next 30 days.

Daily Trust

Bank is committed to financing West African commerical agriculture, but not biofuels

Standard Chartered Bank says it will focus more resources to financing agriculture within countries in the West Africa sub-region with Ghana and Nigeria being prime targets but rule out any support for biofuel production.

“We are looking at and will devote some resources and shift to agriculture in West Africa but the banks policies are clear on biofuel and its effects on food security,” Mr Dan Mobley, Regional Head of Corporate Affairs, Stanchart said at a meeting with a cross-section of journalists to mark the end of his visit to Accra.

The bank, which has already devoted three billion dollars to financing agriculture, currently focuses its activities in countries in the Southern Africa region.

Mr Mobley said although the focus of operations would be on commercial farmers, the bank was exploring the possibility to partner governments to develop innovative schemes for small holder farmers to enhance food security.

He said it was an exciting time to explore opportunities in Africa as investors were more focused on the continent as forecast had shown that seven countries on the continent would be among the 10 fastest growing economies over the next years.

“This growth is not only driven by commodities but is broad based and sustainable,” he said.

Mr Mobley said key growth poles would be agriculture financing since a large percentage of the arable land is yet to be put under cultivation, infrastructure project and increasing demand of consumers for sophisticated financial services.

It is estimated that about 75 per cent of the continent’s growth will come from the agricultural sector.

However, Mr Mobley said, governments on the continent must do more to attract investment into agriculture through building the necessary linkages in infrastructure and undertaking reforms to help boost production.

He said the bank is also in a unique position to explore the explosive growth in trade between Africa and Asia, adding that the Asia-African trade corridor was important for growth.

Ghana is Stanchart’s second largest market in Africa.

Accra Mail

Mauritania receives US$17.9 million agriculture loan and grant

A US$17.9 million loan and grant from the International Fund for Agricultural Development (IFAD) to Islamic Republic of Mauritania will help to improve the incomes and the living conditions of poor rural households depending on agriculture, the United Nations rural poverty agency has announced.

The loan and grant agreements are for the second phase of the Poverty Reduction project in Aftout South and Karakoro regions.

While the country’s agriculture is fragile due to recurrent drought and the desertification, the sector employs more than 56 per cent of the country’s population.

During this second phase of the project, the Government of Mauritania and IFAD will work together to boost the potential of the agriculture sector by enabling vulnerable rural households to significantly increase their production, part of which will be used to improve their food security; to create jobs for young people in agriculture, and other related occupations. The project will also focus on capacity-building activities to help women to acquire access to new economic opportunities and responsibilities within the rural organizations.

The project will build on the accomplishments of the first phase, which began in 2002 in an area known in Mauritania as the “poverty triangle”. During this time, the percentage of households suffering from periodic food shortage decreased and improvements increased such as the status of children’s nutrition, overall living conditions and basic infrastructure.

The second phase of the project will help build an economic and social fabric based on sustainable natural resource management that will be inclusive to poor rural households, particularly women and young people. More than 21,000 vulnerable rural households, women and young people will benefit from the project.

To date, IFAD will have financed 13 programmes and projects in Mauritania for a total investment of US$115.1 million benefiting 181,950 households.

IFAD

Gambia receives $12 million grant to enhance agricultural productivity

by Lamin Jahateh

The Gambian National Assembly recently ratified a grant financing agreement amounting to SDR4, 600, 000 [equivalent to US$12million] that was given to the Gambia government by the International Development Association for the financing of the West Africa Agricultural Productivity Program (WAAPP).

Tabling the grant financing agreement before the National Assembly for ratification, Mamburay Njie, the Minister of Finance and Economic Affairs, said the project constitutes part of the first phase of the programme and consists of enabling conditions of the sub-regional cooperation in generation, dissemination and adaption of agricultural technologies; strengthening of the research system in the region as well as funding of the demand and driving technological generation through provision of research plan and project coordination and management, monitoring and evaluation.

The Gambian Banker

Kenyan company trains and lends to farmers under UN-backed initiative

An investment company in Kenya has announced that it will provide some 100,000 smallholder rural farmers – the majority of them women – with access to small loans and basic financial training over the next five years as part of the company’s commitment to a United Nations-backed initiative to alleviate poverty.

Juhudi Kilimo, which operates in rural Kenya where farmers lack access to bank loans, will provide credit and training as part of its commitment to the Business Call to Action (BCtA), a global initiative supported by the UN Development Programme (UNDP), the corporate responsibility scheme known as the UN Global Compact and several other organizations and governments.

It provides Kenyan farmers’ groups with two-month workshops on agribusiness and financial practices before offering them the opportunity to apply for loans. Farmers can then use the credit to buy assets such as dairy cows, seeds and equipment to help them boost their livelihoods, enabling them to pay the loans at below market rates.An estimated 75 per cent of the Kenyan workforce is involved in agriculture and related activities.

“Access to financial services enables rural smallholder farmers to take the leap from subsistence farming to market-based farming, thereby increasing their productivity and income for the long term,” said Amanda Gardiner, the acting programme manager for the BCtA.


An estimated 75 per cent of the Kenyan workforce is involved in agriculture and related activities. Many of them lack basic agricultural training, equipment, and market connections they need in order to grow their business.

Since the launch of the pilot phase of the project in 2009, Juhudi Kilimo has provided asset financing to over 7,000 smallholder farmers in Kenya, half of them women. The average repayment rate for these loans is 96 per cent.

UN

Uganda gets $14 million agriculture loan, cynics doubt farmer-level benefits

by John Kasozi
Uganda has secured a sh35b ($14m) loan from the International Fund for Agricultural Development (IFAD) to finance the Agricultural Technology and Agri-business Advisory Services project.

The loan has a maturity of 40 years, including a grace period of 10 years, a statement from the Uganda embassy in Rome said.

Deo Rwabita, Uganda’s ambassador to Italy and Kanayo Nwanze, the IFAD president, signed the loan deal at IFAD headquarters in Rome, Italy on November 9. Rwabita is also the permanent representative to FAO and WFP.

Ambassador Mumtaz Kassam, the deputy head of mission and Robert Sabiiti, the alternate permanent representative to FAO and WFP witnessed the function.

The loan administration and project supervision will be overseen by the IDA as a co-operating institution, the statement added.

It indicated that the project would focus on raising rural poor households’ income through improved agricultural research and advisory services, while enhancing environmental sustainability and resilience to climate risks and land degradation.

It will promote the role for private sector operators in agricultural development. It will also introduce new technologies for sustainable land management to help farmers cope with risks associated with climate change.

Speaking at the signing ceremony of the loan agreement, ambassador Rwabita hailed the excellent relationship between IFAD and Uganda. He noted that the Vegetable Oil Development project in Kalangala, which he visited recently, was a success as it has improved the livelihood of participating the farmers and their families.


Being national in scope, the project will build on the IFAD co-financed National Agricultural Advisory Services Programme, which was successfully completed in December 2010.

During the implementation of the project, the agriculture ministry will be the lead agency. The additional project parties are the National Agricultural Advisory Services and the National Agricultural Research Organisation.

Agriculture is one of the mainstays of the Ugandan economy. Raising agricultural productivity and promoting agriculture businesses are high priorities for the government.

With the introduction of more profitable crops, smallholder farmers are expected to improve their yields and be able to set higher farm prices for their produce. More than 1.7 million rural households consisting of women and young people will benefit from the project.

With this new project, IFAD will have financed 14 programmes and projects in Uganda for a total investment of sh740billion (US$296.5 million) benefiting more than 4 million households.

Reader Comments 

Aaron | Bweyogerere
I''m a farmer but all the years I have done farming, I have never set my eyes or even benefited from the likes of naads, naro... These guys just use that money to buy fuel guzzling cars. The last time I tried getting a naads coordinator to my farm, he asked me for facilitation!!! So this is another waste of precious dollars.

Kilama Maxwell | Bweyale -Kiryandongo
This is good to hear, But? who are the actual beneficiaries? It is very difficult to access agriculture loans from the current banking institutions.I would suggest an agriculture bank be in place so that farmers would easily get the loans other than the so called traditional banks. otherwise the actual beneficiaries will not even have a smell of it.

kuhabwa fred | sembabule
This is a good initiative to support agriculture productivity and agribusiness projects in uganda which would be engine for massive food supply to the entire african continent and beyond however with my experience working with rural house holds to come out of cronic poverty and ensure positive results such funds should be channeled through farmer''s cooperatives, otherwise we might stop celebrating on loans agreement signing.

emma | mbarara
what is the importance of getting loans when we cant even use the money for its rightful targets!

KOMAKECH ALEX ONEK | Kitgum
rural framers in Uganda would have been the most empowered and rich farmers in East African region.Alot of financial concerns and support from both the government,local and International communities hace been shown unfortunately the money does not sinks to its rightful target.its my prayer to God and to the officials in public offices to have mercy on the Poor Ugandans who eat by chance than by choice.

ACAYE | Bergen - Norway
Alfonso,Good question,!!!! i also wonder where all the loans and grants go in Uganda!!! i hope they dont end up in private or personal accounts like the AIDS FUND!! NARO has already done enough research !!! all we need is to fund the farmers directly, in order to improve their out put and house hold incomes. i can see half of this loan ending up on financing seminars, workshops, and unnessary trips for the so called researchers!!! WE ALWAYS HAVE OUR EYES OFF the ball, and seeems nerver to get it right!!!! , very dissappointing!!!!

Peter | kampala
Let the money be used for the intended purpose, to avoid previous mistakes and setting up probing committees which consume more money! The agricultural sector needs much more investment given the prevailing environment situations.

Alfonso | Ntinda
How many loans does Uganda get in a week ? It has just borrowed from Nigeria NSSF to refurbish Mulago ! where does all the money URA collects go ? Now we cant even invest in local projects.


New Vision

South Africa: Former Land Bank boss in court on graft charges

Former Land Bank chief executive Philemon Mohlahlane and two others appeared in the Pretoria Commercial Crimes Court on November 7 on charges of embezzling R19-million from the AgriBEE scheme.

The matter was postponed because one of Mohlahlane's co-accused -- former Gauteng's provincial housing minister Mpu Daniel Mofokeng -- requested time for his new attorney to study the case.The court set a provisional date for January 30, when a trial date would be decided.

Mofokeng told the court he faced financial problems and could not afford to pay his attorney, Molifi Mabalane. Magistrate Nika Setshogoe urged Mofokeng to apply for legal representation from the Legal Aid Board if he could no longer afford to pay for his own lawyer.

Mohlahlane, Mofokeng, Matuba Maponya and Khutso Mosoma were arrested on March 1 and released the next day on R40 000 bail each. Charges against Mosoma were later withdrawn. The remaining three were expected to plead to five counts of fraud and five counts of money laundering at their next court appearance.

At the time of their arrest, Hawks (government fraud investigation squad) spokesperson McIntosh Polela said the charges related to money transferred from the AgriBEE fund to a firm of attorneys. This money was then allegedly used to buy houses and cars instead of funding small, medium and micro enterprises. The offences were committed between October 2007 and January 2008.

Mohlahlane (56) was arrested and charged separately in March for allegedly falsifying his qualifications in applying for several high ranking government jobs.

Mail and Guardian

East Africa could benefit from IFAD 's $600 million agric fund

by David Muwanga

It is time for the five partner states of the East African Community (EAC) including the other 16 countries that are member states of the International Fund for Agriculture Development (IFAD) to apply for funds to fill finding gaps in the agriculture ministries, an official has announced.

"We have already developed a budget of $600m for the next three years 2010-2012 through which member states of the IFAD can now apply to fill up funding gaps in the ministries of agriculture mainly for projects intended to support livelihoods of people in rural areas," said the fund's director for East, West and Southern Africa Ides v.d. Does de Willebois.

"All member states of the fund can apply and we allocate funds according to the population and the country's performance in the utilization of funds previously as some of the poorly performing countries are having their allocations reduced," he said on November 14, in Arusha, Tanzania.

This was after the opening of a five day regional implementation workshop for IFAD supported projects and programmes in East and Southern Africa at the Arusha International Conference centre (AICC) in Arusha, Tanzania.

The workshop that is joined by the South Sudan as a new member is aimed at sharing experiences on hindrances and progress by the heads of the funds projects and programmes from each country and drawing a way forward.

Tanzania's permanent secretary in the food security and cooperatives ministry Mohammed Saidi Muya said that his government has already drawn up an agriculture investment plan which is aimed at implementing seven priority programmes.

These include irrigation development whereby Tanzania has got 44m hectares of irrigable land but less than one million hectares are under irrigation.

"The other priority is production and commercialisation of agriculture targeting to involve the private sector in agricultural; production which has hitherto been a public but not a private sector concern," he said adding that this however calls for a minimum of six percent budget support which is still at between 6-7%.

He said the third priority is rural infrastructure that includes development of markets and trade and the forth being food and nutritional levels and fifth is disaster management and climate change mitigation.

"We have already budgeted for the investment plan to cost $5.304bn but we have got a funding gap of $2.876bn to which we expect IFAD to provide us with support," he said.

East African Business Week

Danish pension body invests in African agriculture-targeted fund

PensionDanmark has invested 43-million Euros in the Silverland Fund, which will invest in Africa's agriculture sector.

The fund will focus on agricultural production in Tanzania, Zambia, Malawi, Uganda and Mozambique. The total investment commitment to Silverland is expected to reach 215-million Euros.

The Danish pension fund says that a combination of a high yield per acre, two harvest seasons a year and land prices, which are significantly lower than in the U.S. and Europe, would offer attractive returns on the investment.

'We have an increasing focus on investments in Central Africa, which is on track to become one of the next major growth regions of the world,' says senior portfolio manager, Anders Bang.

Pension Denmark has also invested 27-million Euros in listed companies in 10 central African countries through the fund DUET, and 7-million Euros in DI Frontier Market Energy & Carbon Fund, which invests in renewable energy projects in East Africa.


allafrica.com