Tuesday, 27 August 2013


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.
But growing the base of PE capital available to the region will take time, according to Mr Chigwende. “FDI remains a very important component of the LP structure base in a lot of the funds, they are the majority of the capital. And so I think as an industry what we need to do is attract more non-DFI international capital to the region,” he says. “I think that is a process of education. There are a lot of LPs that are increasingly looking at the region.”

Monday, 26 August 2013


Tourism has evolved over the past decades into one of the fastest-growing sectors in the world and a transformative force in global development.

More than one billion people travelled the world in 2012. Tourism represents today up to 9 percent of global GDP in direct, indirect and induced impacts), 30 percent of service exports and employs 1 in 11 people around the world.

Tourism’s growth is truly extraordinary considering that merely 60 years ago, international tourists numbered 25 million. This positive trajectory is expected to continue  the U.N. World Tourism Organization’s long-term forecasts indicate that by 2030 international tourist numbers will reach 1.8 billion, with emerging countries foreseen to welcome more than half of the world´s international tourists.

But this global impact also calls for great social responsibility. Tourism is capable of addressing some of the world’s biggest challenges, and what’s more, it can be a true agent for development.

Tourism’s important role in the global development agenda is steadily becoming recognized among the world’s leaders. The United Nations has identified tourism as one of the ten sectors to drive the transformation towards a green economy, and in 2012 at Rio+20 tourism was included for the first time in the outcome document of a U.N. sustainable development conference as a sector that can make “a significant contribution to the three dimensions of sustainable development, has close linkages to other sectors, and can create decent jobs and trade opportunities.”

For many developing countries, international tourism is a major source of foreign exchange and investment, creating much-needed employment and business opportunities. Tourism is one of the top three exports in a majority of these countries, and the lead export for at least 11 Least Developed Countries. International tourism receipts represent as much as 6 percent of all exports and 56 percent of service exports of the 49 LDCs. In fact, tourism was a main factor that helped Botswana, the Maldives and Cape Verde graduate from their LDC status.

In spite of tourism’s evident role in socioeconomic development, many challenges remain, none the least ensuring that the world’s poorest countries — over half of which have tourism as a priority instrument for poverty reduction — continue to benefit from the income and social opportunities provided by the tourism sector  while tackling the environmental challenge.

A recent joint study by the OECD, WTO and UNWTO shows that there is still a significant disparity between the sector’s high potential for development and the low priority it has been given so far in terms of development aid. The contrast is striking  tourism is only allocated 0.13 percent of total ODA and 0.5 percent of total Aid for Trade.

It is thus critical for tourism to be placed higher in the development agenda and for the level of development assistance to match the immense potential that the sector has to contribute to development objectives.

Saturday, 24 August 2013


By Joan Thatiah
The other woman. Three words that spell anxiety, even dread, to most women in relationships. If you listen to women talk on the streets or on social media, then you know that the other woman is constant on the minds of many Kenyan women.

Usually, the discussion will revolve around how to deal with her. Do you contact her and try to appeal to her or, better yet, tell her off? Do you walk out on him? Or do you go home and continue being a perfect, loving, and selfless wife and pray that your man will see what he has with you and end the affair?
What is moral?
Her aim, when Grace decided to confront the woman that her husband was seeing, was to scare her away, but Grace’s visit instead seemed to empower her rival.
The fact that Grace went out of her way to find out where she lived seemed to make the other woman feel as if she was the deciding factor whether or not Grace and her husband would stay together. It was as if she knew that Grace was falling apart.
“She told me that if I was so sure that he loved me, I wouldn’t have gone to see her. She seemed so sure of her hold on my husband that I lost it and attacked her. She was able to call him before I could and judging from the fact that he didn’t speak to me for days and even spent a couple of nights after this at her place, I know she used the claws, blows, and kicks she got to get closer to him,” Grace, 30, remembers.
“Confronting her was a lose-lose situation. I lost my dignity and also pushed him further towards her,” she adds.
Against the law
Calling or texting the other woman is unlikely to escalate into a physical fight and may, thus, seem to be a safer option, but not if you do not want to serve time in jail the way 31-year-old Salome found out.
She used to go through her man’s texts and call logs regularly and if she found anything fishy from a woman, she would tell her off. Not very long ago, she sent an abusive text to a woman he was clearly sexually involved with and instead of her writing back like she expected, the other woman went to the police.
“She was the one that was creeping on my marriage but I was the one who begged her to settle out of court. I ended up paying her Sh20,000 while he looked on with a smirk.”
When you discover your man’s betrayal, it is normal to want to speak to her, hear her say why she disrespected your marriage, and probably even make her suffer as much as you have. All these may seem like options of taking away your pain but Nairobi lawyer Kennedy Osoro advises restraint.
Section 29 of the Kenya Information and Communication Act states that sending a message that is grossly offensive, indecent, obscene, or menacing, or a message that one knows is false, to cause annoyance, inconvenience, or needless anxiety to another person is an offence and upon prosecution, you may be subject to a fine of Sh50,000 or a maximum jail sentence of three months or both. The penal code, on the other hand, outlaws assault and that traditional catfight could land you in jail.
“If, however, she attacks you and throws the first punch, you can protect yourself. The law will be on your side,” he says.
Even women like 26-year-old Meridith Wambui, who confesses to having spied on and trailed a woman she believed was seeing her husband, risks getting caught by the long arm of the law for infringing on another person’s right to privacy and confidentiality.
Don’t need to know
Other than seeking revenge, getting closure is the other main reason that drives a woman to pick up the phone to call the other woman. From her experience, Naomi Wambui, a teacher, says that if you do it the right way, you are likely to get some answers.
However, before you pick up the phone, she cautions that the answers you get may not be the ones that you were looking for. When she tracked down and finally met the other woman in her husband’s life last year, the woman was approachable and remorseful.
“She answered most of my questions. Some of the things that my husband had told her about us hurt me even more than the physical cheating. He broke up with her and we have been trying to work on our relationship and I thought I could get through with it and forget, but her face and the things she said are forever branded in my memory.”
Celestine Silantoi, 25, agrees with Naomi that what you hear might not be what you were hoping for. She confronted the woman she had evidence was the other woman in February this year, eyes blazing, only to find out that she was, indeed, the other woman and this woman had been dating the man for much longer than she.
Deal with him
In any event, and especially if you want to hold on to your man, it is easier to blame the other woman. You should not, however, forget that while she may just be as guilty as he is, he is the one who betrayed you and not her, and regardless of whoever initiated it, he had the choice to desist.
Hellen Ndulu has made sure not to forget this and one thing she claims to have learnt about a cheating man is that unless you catch him in bed red-handed, he will deny that he is cheating and if you attack him, he becomes defensive.
She says that she once confronted her man with text messages she thought were inappropriate but perhaps because he felt caged, he shifted the conversation to the fact that she had been snooping.
“We have had one more incident and I simply talked to him. I didn’t accuse or ask him to explain anything. I just told him what I knew, how bad it made me feel, and that I wanted to work on our relationship. I assume he ended whatever he had going on the side because his attitude changed and now I see him making an effort not to hurt me. I am not saying that this always works, but at least it will have better results than attacking him. It all goes back to the fact that men like to be coddled,” she says.
Others, like 30-year-old Beryl, have resigned themselves to the fact that men are polygamous. When her man strays, which is often, she ignores what she terms as “his little in discrepancies” as long as he is fulfilling his duties. Aware of the risks that he may be exposing the whole family to, she has vowed not to be intimate with him without protection and he goes along with it.
In her words, “No man is perfect here. A marriage or a relationship should never break because of cheating, otherwise there would be few marriages left. Let him do whatever he is doing; he will tire of it at some point, trust me. Never confront the other woman either. It will be like adding insult to injury.”
Apparently, confronting her may not be the right card to play but what if the woman he is running around with behind your back is someone you know or a friend? Does she not owe you an explanation?
When 28-year-old Sophie found out that a casual friend was the other woman two months ago, she girdled her anger and judgment and played the friend card.
“I told her that I knew how my boyfriend was and that we should gang up against him and she foolishly agreed. The man is also my son’s father and I intend to fight for our relationship. I am just gathering all the dirt I can on her so that when she least expects it, I will show him who she truly is.”
“It takes the commitment of two people for a relationship to recover after an affair. If he clearly isn’t trying to fix it, it’s a bad sign,” says Nelly, a mother-of-two.
She draws from experience. Nelly and her husband are on the verge of separation and she says that from the word go, their five-year marriage has been plagued by a string of mistresses. She believes that she has no business confronting the other woman and each time he has betrayed her, she has taken it up with him.
Each time, even when she had evidence, he denied it but because of the young family that she wanted to keep together or perhaps because she hoped ignoring the signs would make everything go away, she believed him.
“I found out about this last one a couple of weeks ago. She must have wanted to marry him because when he attempted to break up with her, she went berserk. She has been to our home, threatened our children, and stalked me on Facebook. What bothers me more is that he is just watching from the sidelines as she torments me and doing nothing about it. He brought her into our lives and I feel he should be the one to get her out. If he was making an effort to get rid of her and work on our marriage, I would have stayed.”

Friday, 23 August 2013


Malawian President Joyce Banda has set poverty alleviation as the top priority of her tenure as incoming chair of SADC, promising to champion policies and programmes to improve the agricultural and rural sectors.
Noting the linkage between poverty and political stability, Banda said the Southern African Development Community (SADC) should redouble efforts to reduce hunger in the region.
Promising to bring SADC “closer to the people”, Banda said she would target ending “the contemporary, deliberate and savage violence of poverty and underdevelopment” during the coming year.
“To win this war …we must promote inclusive politics. In this, we cannot afford to leave the youth behind. We cannot afford to leave women behind. We cannot afford to leave the poor to look after the poor,” Banda said in her acceptance speech during the 33rd SADC Ordinary Summit held in Lilongwe, Malawi on 17-18 August.
She said agriculture is the backbone of most economies in the region, yet little is being done to support the sector.
“Stimulating this sector would transform the livelihoods of our people and provide the foundation for the future development of our nations,” she said.
“We therefore, need to work harder to help our smallholder and commercial farmers to build, grow and sustain their businesses, to feed ourselves and access new markets beyond our region,” she said, noting that the theme for her tenure is “Agricultural Development and Agro-Industries: Key to Economic Growth and Poverty Eradication.”
Among other things, the incoming SADC chair promised to push for innovative agricultural policies and programmes in the region such as effective extension services and affordable inputs which have the capacity to promote rural development and boost food security.
She said any policies on agriculture and rural development should be aligned to other regional plans on infrastructure and industrial development as well as gender development.
“We sincerely hope that economic policy coordination in the SADC system will be harnessed in order not only to accelerate growth but also to reduce poverty, widen economic opportunities and enhance human development.”