1. Opportunities for Agro-industries and Agri-enterprises in the EAC Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems 1 Presentation at the 1 st EAC Lake Tanganyika Basin Development Conference by Nuhu Hatibu - CEO – Kilimo Trust 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

2. With respect to agriculture… 8 Of the top 12 Commodities in the EAC are also the leading in the L. Tanganyika Basin Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems 2 Commodity Rank in the EACImportance in LTB Maize1 √√√ Cassava1 √√√ Dairy Cattle3 Plantains/ Bananas4 Beef cattle5 √√√ Sweet potatoes6 √√√ Dry Beans7 √√√ Irish potatoes8 Sorghum9 Groundnut10 √√√ Rice11 √√√ Fish culture12 √√√

3. 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 3

4. 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 4

5. For Example Beef … Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems 5

6. For Example Cassava … Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems 6

7. 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 7

8. 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 8

9. BUT Note … agro-industries in the EAC follows Transport Corridors Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems 9 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

10. Therefore … To Unlock the Overflowing Trade and Investment Opportunities in the LTB, highest priority should be given to: 1.The full development of the transportation potential of the lake; and 2.Critical level of power supply Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems 10

11. Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems 11 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.

12. 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 12

13. 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 13

14. … 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 14

15. 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 15

16. 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 16

17. 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 17

18. Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems 18 regional solutions to local problems in the EAC 1.Support to developing an EAC Regional Common Strategy 4 Food Security; 2.Comprehensive diagnosis and analysis of EAC-wide strategic food commodities; 3.Graduating smallholders to “investable” agri-SMEs; 4.Building Private–Private– Partnerships -between- organized smallholder farmers and agri-SMEs –and- large scale firms (agribusiness and processors) and commercial banks

19. Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems 19 Development of Inclusive Markets in Agriculture and Trade Designed to: a.Build Private–Private–Partnerships: Functional business linkages ESTABLISHED; and Fully operational pro-poor business innovations by corporate multinationals IN PLACE b.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

20. Take home message… Bujumbura, 28.11.2011 The Kilimo Trust: regional solutions to local problems 20 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.

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