Africa News blog

African business, politics and lifestyle

African agricultural finance under the spotlight

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ZIMBABWEKeith Mullin, Editor-at-Large of Thomson Reuters IFR, writes on prospects for the flourishing investment in African agriculture.

Africa is turning into a fashionable post-crisis investment destination as investors regain their confidence and start to focus on the continent’s lack of direct involvement with the global market’s volatility drivers and trouble hotspots. Africa is benefiting not only from a resumption of international debt and equity flows; it is also a beneficiary of international efforts to maintain the flow of trade finance via multilateral guarantee programmes – 45 issuing banks from 27 countries in sub-Saharan Africa have joined the IFC’s trade finance programme, for example.

At the same time, bilateral and multilateral development agencies are actively investing via an assortment of public and private-sector channels; the international capital markets pipeline is building – sovereign debt offerings on the docket for Nigeria, Senegal, Tanzania, and Zambia with Libya believed to be looking – while the slew of private equity and hedge funds being raised this year for Africa are seeing healthy interest from public-sector and private LPs.

Investors are focusing broadly on Africa’s relative political stability, improving governance, more conducive policy and regulatory environment, as well as more transparent foreign investment regimes. At the macroeconomic level, above-average growth and low levels of government and corporate indebtedness add to the appeal. What’s key to much of the capital flowing into Africa is that it is supplemented by a support network of capacity building, advisory services, training, technology transfer, and infrastructure benefits.

From a sector diversification perspective, the emergence of new technologies such as mobile telephony and Internet broadband are creating interest beyond the traditional natural resource plays; the telecoms and services sector was the dominant Africa FDI recipient in 2009.

Is Kenya’s economy on the mend?

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hipposThis past holiday season in Kenya was quite a contrast to the preceding year.

While in 2008 December was dry and dusty, last month was marked by heavy rains across the country, making for soggy barbecues and muddy cars for the many urban Kenyans who usually like to spend Christmas with their families in the rural areas.

The rains have killed 20 people and displaced many more through flooding. But they are vital, given the country’s reliance on agriculture, which accounts for nearly a quarter of the country’s GDP and employs about two thirds of the entire population.

Zimbabwe farmers turn to Nigeria

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When white Zimbabwean farmer Irvin Reid arrived in Nigeria almost five years ago, he was given a set of grid references in the remote bush and told to find water and build a new farm.

His dairy farm now has 300 Jersey cows, some of among 800 imported from South Africa to start cattle farms in the region.

Selling Africa by the pound

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The announcement by a U.S. investor that he has a deal to lease a swathe of South Sudan for farmland has again focused attention on foreigners trying to snap up African agricultural land.

A few months ago, South Korea’s Daweoo Logistics said it had secured rights to plant corn and palm oil in an even bigger patch of Madagascar – although local authorities said the deal was not done yet. Investors from Asia and the Gulf are looking elsewhere in Africa too.

Saving Kenyan forest. Is it a turning point?

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mau-forest3.jpgAfter a decade of rampant destruction of the Mau forest water catchment in western Kenya, the country’s coalition government seems firmly united in trying to save the complex before more serious damage is inflicted on the economy.

U.N. officials say this is no longer simply an environmental issue but something that has huge importance for the whole country. Already two of the top three foreign exchange earners — tourism and tea — are feeling the impact of falling water levels which have also forced the postponement of a major hydro-electric project. 

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