How can you leverage this vast market- Mobile Money

McKinsey Quarterly: More than a billion people in emerging and developing markets have cell phones but no bank accounts. Many low-income people store and transfer money using informal networks, but these have high transaction costs and are prone to theft. Mobile money is beginning to fill this gap by offering financial services over mobile phones, from simple person-to-person transfers to more complex banking services......
-------Think Africa business-------

Bakirie Group to invest $1 billion in Nigeria

One of Indonesia’s biggest conglomerates, Bakrie Group, last year partnered with British-Nigerian entrepreneur Ladi Delano to form Bakrie Delano Africa (BDA) with the intention of investing $1 billion in Nigeria over the next five years. How we made it in Africa’s Dinfin Mulupi interviewed Delano, BDA chief executive, about this joint venture and the opportunities in Nigeria.






Ladi Delano


My first question would be: Why Nigeria?
Nigeria is attractive to the Bakrie Group as an investment destination for several reasons. Firstly, it is experiencing excellent rates of economic growth, approximately 8% per year, which is forecast by a wide cross-section of respected economic commentators to continue over the medium to long term. Indeed, Nigeria is widely predicted to overtake South Africa as the African continent’s largest economy within three to four years. Within the context of this strong overall economic growth, there are individual sub-sectors where rates of growth exceed 8%.

These individual sub-sectors are also areas where the Bakrie Group in Indonesia has a lot of operational experience. This experience is not only in the sectors per se, but also at a similar stage in the respective sectors’ growth curves.

Finally, as an indigenous company, Bakrie Delano has deep rooted relationships in Nigeria too, which is a very important point. Business relationships on the ground are vital when operating in any market, especially emerging markets.

The combination of these three factors: rapid economic growth, an operational track record in particular sectors and local knowledge makes Nigeria very attractive.

I am sure our readers are wondering: who is Ladi Delano?
I have been an entrepreneur in emerging markets, generally south-east Asia and China. During this time, I have been involved in a variety of sectors and also natural resources M&A and structured finance.

One of your goals is to encourage the wider Nigerian diaspora to repatriate skills and capital for the benefit of the country and its economy. Explain how you hope to achieve this?

Bakrie Delano Africa is seeking to not only derive an attractive return on its investments, but also to create jobs, permanently, in Nigeria. Nigeria requires foreign direct investment to grow, but this is less attractive if companies investing there do this via a foreign workforce. We want to invest in Nigeria to generate a meaningful profit, but we also want to put something back into the country enabling the workforce to develop its own skills. In turn, this will make Nigeria even more efficient benefiting workers and investors alike.

The more Bakrie Delano Africa can be seen as succeeding in this respect, the more other companies (including members of the Nigerian diaspora) will feel comfortable, and be attracted to, making similar investments to ours.

What criteria will you use when choosing projects to invest in?
Our investment appraisal process initially reduced the shortlist of sectors to invest in from fifteen to three, so we are already very focused on sectors we believe are attractive. From then on, our criteria will include three considerations:

    Will we generate a decent return on investment and cash flow as quickly as possible?
    Does the Bakrie Group have relevant expertise and experience it can leverage?
    Will our investment also create jobs and have a positive impact on Nigeria’s economy and its workforce?

If the answer to these three questions is yes, then individual projects start becoming very interesting to us.

Which other markets in Africa seem lucrative to you other than Nigeria?
Bakrie Delano Africa is interested in all of sub-Saharan Africa, particularly Nigeria and west Africa. Each country has its own different appeal, but the next 20 or 30 years could be transformational for the continent.

What should other African countries do to attract such investments from global firms like Indonesia’s Bakrie Group?

We have benefited greatly from Nigeria’s creation of its new Ministry of Trade & Investment headed by Olusegun Olutoyin Aganga. In this we have found a one stop shop for investment in Nigeria.

The Minister has campaigned tirelessly to welcome and create the right conditions for new investment in Nigeria and I’d advise every African country to follow suit with the creation of similar ministries.

Apart from that, I don’t know whether there is a one-size-fits-all solution to attract the Group’s attention. However, any country which is experiencing economic growth, and has opportunities in the mining, oil and agriculture sectors and respects the rule of law and ownership of assets could be attractive to us.

Any advice to African entrepreneurs?
My advice to African entrepreneurs would be the same to any entrepreneur. Success doesn’t come easy so work hard, believe in yourself and learn from your mistakes; all entrepreneurs make them … the big mistake is not learning from them.

Credit: How we made in Africa

Grow rice with less water

Around 700 million of the world's poor live in rice-growing areas in Asia. Rice is the staple food in Asia and 95 percent of the world's rice is produced there. Mostly grown in soils submerged under water, irrigated lowland (or ‘paddy’) rice accounts for nearly 80 percent of the world’s rice production and receives close to half of the fresh water diverted to agriculture in Asia.


Increasing scarcity and rising cost of water threatens the sustainability of irrigated lowland rice. It is expected that by 2025, 13 million hectares of Asia's wet season rice and two million hectares of its irrigated dry season rice will experience physical water scarcity due to overuse of water, exacerbated by unpredictable rainfall caused by a changing climate. Most of the approximately 22 million hectares of irrigated dry season rice in South and Southeast Asia will experience water scarcity and farmers will not be able to afford to irrigate their rice fields. Since 2000, the International Rice research Institute (IRRI) and its partners in China and in the Philippines have pioneered a new production system aimed at drastically reducing water use in rice production, called “aerobic rice”.


Unlike in conventional lowland rice, aerobic rice does not grow in submerged soils but, like other crops such as wheat or maize, in well-drained, nonflooded and nonsatured soils. Initial results demonstrated that aerobic rice uses only half the water required by lowland rice, with only 20 to 30 percent less yield. Hence, the amount of rice per unit water input is higher under aerobic than under lowland rice production.


WHEN WATER IS TOO SCARCE OR EXPENSIVE Aerobic rice holds promise for farmers in areas where water available at the farm level is too scarce or too expensive to grow flooded lowland rice. A CGIAR Challenge Program for Water and Food (CPWF) project led by IRRI further builds upon this promising research to develop and disseminate aerobic rice systems for environments where there is not enough water to grow conventional lowland rice. Called the System of Temperate and Tropical Aerobic Rice in Asia (STAR) project, it has expanded the network of partners collaborating on the breeding and selection of aerobic rice varieties and developed appropriate crop management practices that address environmental and sustainability issues. In China the project has attained a maximum yield of 6 tons per hectare using only half of the water normally used to grow lowland rice. Yield potentials of 6 tons per hectare were also demonstrated in the Philippines, although actual yields in farmers’ fields there ranged from 2.9 to 3.8 tons per hectare in the dry season, and up to 4.5 tons per hectare in the wet season. In Central India, selected varieties produced similar yields.


Cultivating aerobic rice in China is already economically viable at yields of only 3.5 tons per hectare. Farmers in China appreciate the fact that aerobic rice is both resistant to drought and water-logging. Aerobic rice is a profitable alternative to maize and soybean crops, which are badly affected by water-logging in the summer season. In addition, the reduced labor involved in aerobic rice cultivation is another feature beneficial to farmers. Specially adapted varieties have been identified and released in China, India, and the Philippines. The potential positive impacts are substantial as the aerobic rice provides a viable response to temperature and water stress from increased climate variability, and economic water scarcity.

Credit Bas Bouman.
 Bas Bouman is the lead scientist at the International Rice Research Institute (IRRI), which is part of the Consultative Group on International Agricultural Research (CGIAR). CGIAR is co-organising Agriculture and Rural Development Day on June 18, 2012, ahead of the Rio+20 summit.

International Fertilizer Industry Association appoints new Director General

Doha, Qatar: 24 May 2012 – The Council of the International Fertilizer Industry Association (IFA) approved today the appointment of Ms. Charlotte Hebebrand as its new Director General. Ms. Hebebrand will replace Mr. Luc Maene, IFA’s current Director General, upon his retirement on 31 December 2012. She will be the first woman to hold this position.

William J. Doyle, President of IFA and CEO of Potash Corporation of Saskatchewan Inc., presented Ms. Hebebrand to IFA’s members participating in the Association’s 80^th Annual Conference held in Doha, Qatar this week. “Charlotte is eminently qualified to be the next leader of our industry. She has dedicated her career to food production and understands fully the value of fertilizers”, said Bill Doyle. Ms. Hebebrand was selected after a thorough international search process during which over 410 profiles were considered.

Charlotte Hebebrand is the current Chief Executive of the International Food and Agricultural Trade Policy Council (IPC), a think tank based in Washington, DC working on promoting a more open and equitable global food system and composed of a diverse mix of distinguished international agricultural trade experts. She demonstrated her leadership and international understanding of agri-food chains during her time at IPC. Prior to this role, Ms. Hebebrand held positions at the European Commission and the Brookings Institution.  She holds an M.A in International Relations and Economics from Johns Hopkins University and is a dual German and US citizen. “It is a real pleasure to work for an industry that is doing so much for food security. I am looking forward to meeting all of IFA’s members and working closely with them on the key issue of feeding a growing population and improving the safety, health and environmental impact of the industry’s operations”, commented Ms. Hebebrand upon her appointment. Ms Hebebrand’s background is truly international but she has a particular interest in contributing to Africa’s agricultural development.

Ms Hebebrand will start working at IFA’s office in Paris on September 1, 2012. She will work together with Mr. Maene for four months before assuming the position of Director General on January 1, 2013. Mr. Maene has been Director General of the International Fertilizer Industry Association since 1987, following an FAO assignment of seven years in Asia and the Pacific. During his tenure, IFA’s membership expanded dramatically adapting to changes in global market dynamics and involving new players, in particular in Asia. Commenting on Mr. Maene's tenure with IFA, Mr. Doyle said, "Luc Maene has done an outstanding job leading our global association for the last 25 years. He pushed our growth to the four corners of the world by greatly expanding our membership. His human touch was greatly appreciated by everyone and we are all very grateful to him for his many years of dedicated service to the fertilizer industry."

Mr Maene’s legacy will be celebrated during IFA’s Council meeting that will take place on 28 and 29 November in Rome, Italy. “Charlotte is the best candidate IFA’s leadership could select. Her reputation in the international agricultural and food policy world is outstanding”, he said.

END

The International Fertilizer Industry Association (IFA) is a trade association representing the global fertilizer industry. IFA member companies represent all activities related to the production and distribution of every type of fertilizer, their raw materials and intermediates. IFA’s membership also includes organizations involved in agronomic research and training. IFA has some 540 members in about 86 countries. The global fertilizer industry produces some 170 million tons of fertilizer nutrients annually. These are used in every corner of the globe to support sustainable agricultural production and food security. www.fertilizer.org

Media contacts:
Ms. Morgane Danielou
Director - Information and Communications
International Fertilizer Industry Association (IFA)
Switchboard: +33 1 53 93 05 00
mdanielou@fertilizer.org
www.fertilizer.org

Karma Foods Ltd invest $20 million in Sub- Saharan Africa country of Nigeria

Nigeria-based Karma Foods Limited is establishing a $20 million factory that will take delivery of locally produced soybeans at the end of this year's harvest, and open up new marketing opportunities for Nigerian soybean farmers.


The 75,000 metric tons processing capacity factory, which is located near Abuja International Airport close to Gwagwalada—about 30 minutes drive from Nigeria’s capital city of Abuja—will create additional stable and sustainable demand for soybean in one of Africa’s major producers.

Karma Foods plans to source 100% of its soybean demand locally, says Dipak Mirchandani, Chairman of the firm, ahead of a stakeholder conference on soybean in Makurdi on 12 July.

“We hope that this investment will help reposition soybean production in Nigeria, and more importantly, it will profit the Nigerian soybean farmer because he now not only has options to sell his products, but also can plant with a sense of security and the assurance that his produce has a committed buyer,” he adds.

To meet the company’s soybean demand, Karma Foods and researchers from the International Institute of Tropical Agriculture under the Tropical Legume ΙΙ project and the University of Agriculture Makurdi will be backstopping farmers in Benue state with best practices in soybean production.

“We see Benue farmers as key stakeholders in this project because the state plays a leading role in soybean production,” says Mirchandani.

The company, the biggest soybean factory in Sub Saharan Africa outside of South Africa, will be creating tens of thousands of jobs along the soybean value chain, which will help reduce the level of unemployment in Nigeria in line with President Goodluck Jonathan’s transformational agenda.

Dr. Alpha Kamara, IITA Systems Agronomist, says the emergence of Karma Foods will go a long way in increasing soybean production in northern Nigeria with a resultant increase in farmers’ income.

He explains that IITA and partners are already promoting soybean production through the provision of high yielding improved varieties, creating awareness, promoting sustainable seed production systems (community seed schemes) and strengthening the capacities of seed companies to package and sell improved seeds.

Described as a ‘miracle bean’ or ‘golden bean’ because of its cheap protein-rich grain, soybean production in Nigeria has been stymied by unfavorable market which often times results to cyclical gluts.

Dr. Lucky Omoigui, Molecular Geneticist/Plant Breeder at the University of Agriculture Makurdi, says the new partnership between research and industry will create sustainable demand and supply for the commodity, and make the farmers proud hence they now have a very large and committed buyer who is reaching out to them.

Over the years, IITA has made substantial efforts to improve the productivity of the crop by developing high yielding, early maturing varieties capable of nodulating in association with local rhizobia, and possessing other good agronomic traits. The institute has also developed and released rust resistant soybean.

Credit Africa business news

Four African leaders to join food security talks at G8 summit

The United State of America government has invited four African leaders to join food security talks at the annual G8 summit this month.

Presidents Yayi Boni of Benin, John Mills of Ghana and Jakaya Kikwete of Tanzania, and Prime Minister Meles Zenawi of Ethiopia will attend the summit at the presidential retreat in Camp David.

They will join President Barack Obama and other leaders of G8 member nations for a session on food security in Africa, the White House said in a statement.

G8 -- or Group of Eight -- comprises Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States.

The summit planned for May 18-19 comes amid fears of famine and drought in some parts of Africa.

Somalia, Ethiopia and Kenya battled drought last year, and aid groups have warned that several other nations are at risk of a hunger crisis.

"A combination of drought, poverty, high grain prices, environmental degradation and chronic under-development is affecting Burkina Faso, Mali, Mauritania, Niger, Senegal, Chad, northern Cameroon and Nigeria," the United Nations said this year. "More than 10 million people are struggling to get enough to eat, including 5.4 million in Niger."

The food and nutrition insecurity threatens the fragile development the region has made, according to Valerie Amos, the U.N. aid chief.

....CNN