Opportunities for Agro-industries and Agri-enterprises in the EAC

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Presentation transcript:

Opportunities for Agro-industries and Agri-enterprises in the EAC EALA-FES Dialogue on FDI in Agriculture Opportunities for Agro-industries and Agri-enterprises in the EAC Lake Tanganyika with its 7 “Victoria Lakes of water”; 670 km of “God-given” transportation corridor – is – truly an overflowing resource Map from Jorgensen, Ntakimazi & Kayombo Presentation at the 1st EAC Lake Tanganyika Basin Development Conference by Nuhu Hatibu - CEO – Kilimo Trust Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems

EALA-FES Dialogue on FDI in Agriculture With respect to agriculture… 8 Of the top 12 Commodities in the EAC are also the leading in the L. Tanganyika Basin Commodity Rank in the EAC Importance in LTB Maize 1 √√√ Cassava Dairy Cattle 3 Plantains/ Bananas 4 Beef cattle 5 Sweet potatoes 6 Dry Beans 7 Irish potatoes 8 Sorghum 9 Groundnut 10 Rice 11 Fish culture 12 Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems

EALA-FES Dialogue on FDI in Agriculture Therefore … Great opportunities in linking the production in LTB to agro-processing and agribusiness value chains in the EAC Common Market … and beyond Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems

BUT, Agro-processing within LTB is… EALA-FES Dialogue on FDI in Agriculture BUT, Agro-processing within LTB is… Very critical because most of the key Commodities have Short Shelf Life if not processed ---------------------------------------- Recall the Chinese proverb: “Give a man a fish and you feed him for a day” “Teach a man to fish and you feed him for a lifetime” ... and add Support the man to preserve and process his fish and you feed the world while creating wealth for generations. Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems

EALA-FES Dialogue on FDI in Agriculture For Example Beef … Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems

EALA-FES Dialogue on FDI in Agriculture For Example Cassava … Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems

EALA-FES Dialogue on FDI in Agriculture Therefore, …. Great opportunity for investment in primary agro-processing as part of regional value chains; through: Contract farming; Out-grower schemes Major Estates, or Mini Estates Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems

Turning the state of being “Land Locked” to an opportunity… EALA-FES Dialogue on FDI in Agriculture Turning the state of being “Land Locked” to an opportunity… Through agro-processing for import substitution in the local LTB and nearby markets – where imported products are a common phenomenon – such as in: Palm oil and its secondary products Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems

BUT Note … agro-industries in the EAC follows Transport Corridors EALA-FES Dialogue on FDI in Agriculture BUT Note … agro-industries in the EAC follows Transport Corridors Figure : Location of agro-industries in the EAC Region BUT, L. Tanganyika which is 670 km long with a 1,900 km shoreline, is a natural transportation corridor Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems

EALA-FES Dialogue on FDI in Agriculture Therefore … To Unlock the Overflowing Trade and Investment Opportunities in the LTB, highest priority should be given to: The full development of the transportation potential of the lake; and Critical level of power supply Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems

EALA-FES Dialogue on FDI in Agriculture E3ADP East African Agri-industries and Agro-enterprises Development Programme Programme of the EAC; Supported by: Kilimo Trust; and FAO (AGS & SFE) VISION: an agriculture sector in the EAC partner states, which supply high-valued and differentiated food, fibre, feed and other agricultural products for local, regional and international markets. PURPOSE: to expand agro-industries and agri-enterprises in the EAC for value addition processing, preservation and marketing of agricultural commodities and products. Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems

E3ADP Thrust 1: Accelerate the Development of Agro-industries EALA-FES Dialogue on FDI in Agriculture E3ADP Thrust 1: Accelerate the Development of Agro-industries By “value addition processing smartness” in: Public agriculture 4 development programmes; and Private sector agricultural investments Requiring investment to build: A critical mass of highly skilled experts and technicians; Strong regional agricultural value chains; Regional clusters of agro-industries and supporting services; Centres of excellence for regionally coordinated R&D and BDS Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems

E3ADP Thrust 2: Getting Markets and Trade Right EALA-FES Dialogue on FDI in Agriculture E3ADP Thrust 2: Getting Markets and Trade Right Requiring investment to: Finish the work on harmonized and/or regional standards for agro-processed products; Operate a robust Market Information System; Eliminate NTBs - with agro-processing itself making a contribution; Support development of vibrant advocacy for agro-industries and regional value chains; Support the development of regional commodity exchange. Most of these are already tackled by other programmes Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems

… on thrust 2 - one key element is to EALA-FES Dialogue on FDI in Agriculture … on thrust 2 - one key element is to Support SME Producers to Organize – so as: To guarantee high and consistent volumes to processors and markets; To consolidate, bulk, and exploit economies of scale to reduce transaction costs; To build strong negotiation positions to extract best deals from value chain partners; and To share the capital cost for appropriate technology for value addition processing. Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems

E3ADP Thrust 3: Enhance Infrastructure Support 4 Agro-industries EALA-FES Dialogue on FDI in Agriculture E3ADP Thrust 3: Enhance Infrastructure Support 4 Agro-industries but …it is the “Last Mile” that matters Requiring: Improved coordination and synergy of investment in infrastructure and agro-industries; and Expansion of last-mile infrastructure for stable flow of raw materials; and In LTB – making the lake a vibrant transportation corridor Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems

E3ADP Thrust 4: “+ve Business Climate” in Policy and Institutions EALA-FES Dialogue on FDI in Agriculture E3ADP Thrust 4: “+ve Business Climate” in Policy and Institutions Focused on three things: Implementation; Implementation; and Implementation. Requiring accelerated efforts towards: Strong PPPs; Regionally supported manufacturing of agro-processing equipment; Mechanism for strong coordination among government ministries and EAC departments. Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems

E3ADP Thrust 5: Attracting Financing and Investment EALA-FES Dialogue on FDI in Agriculture E3ADP Thrust 5: Attracting Financing and Investment Strategic Public Sector Investment; Public Sector Procurement; Dedicated Investment Vehicles to absorb FDIs; Challenge Funds; and Risk Insurance Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems

regional solutions to local problems in the EAC EALA-FES Dialogue on FDI in Agriculture regional solutions to local problems in the EAC Support to developing an EAC Regional Common Strategy 4 Food Security; Comprehensive diagnosis and analysis of EAC-wide strategic food commodities; Graduating smallholders to “investable” agri-SMEs; Building Private–Private–Partnerships -between- organized smallholder farmers and agri-SMEs –and- large scale firms (agribusiness and processors) and commercial banks Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems

Development of Inclusive Markets in Agriculture and Trade EALA-FES Dialogue on FDI in Agriculture Development of Inclusive Markets in Agriculture and Trade Designed to: Build Private–Private–Partnerships: Functional business linkages ESTABLISHED; and Fully operational pro-poor business innovations by corporate multinationals IN PLACE Graduate smallholders to “investable” agri-SMEs: Capacity of SMEs of producers and supporting BDS providers STRENGTHENED; and Access by SMEs of producers to the assets necessary and sufficient to participate in inclusive markets ENHANCED Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems

EALA-FES Dialogue on FDI in Agriculture Take home message… EALA-FES Dialogue on FDI in Agriculture Value-addition processing is key to food security and wealth creation; Lake Tanganyika is a God-given transportation corridor; and Strategic Public investment and Public Procurement locally are vitally important. Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems

THANK YOU! For more information & follow-up … Please visit: WWW.thekilimotrust.org Or Email: admin@kilimo.co.ug Map from Jorgensen, Ntakimazi & Kayombo 21