Category Archives: Donor AID

AGRF 2016 $30 billion for African Agriculture

The ongoing  6th African Green Revolution Forum (AGRF) summit at Gigiri in Nairobi has seen a raft of commitments made by global and African organizations and leaders to increase production, income and employment for African farmers. The Gates Foundation and the Rockefeller Foundation announced an extension of their support to AGRA (organizers of the  event), who also celebrated their 10th anniversary this week.

Kanayo Nwanze, Agnes Kalibata, Akinwumi Adesina - three winners / laureates of the Africa Food Prize

Kanayo Nwanze, Agnes Kalibata, Akinwumi Adesina – three winners / laureates of the Africa Food Prize

Some of the announcements include:

  • African Development Bank $24 billion  to accelerate commercial financing and commercial lending to small farmers and agri-business, some of which will go towards partial risk and  partial credit scheme to improve the quality of agri-business investments to Africa
  • Gates Foundation $5 billion. 
  • $3 billion from the International Fund for Agricultural Development over 6 years (IFAD has a policy to spend at least half its $1.1 billion annual budget in Africa) .
  • Kenya Commercial Bank pledged $350 million (including $200M towards market infrastructure and $150M to livestock farmers) 
  • Kenya Government $200 million towards young farmers and entrepreneurs market access,  finance and insurance.  
  • Others were by $180M from the Rockefeller Foundation (including $130M to the Yieldwise initiative under AGRA to improve field storage), Yara fertilizer (to link small farmers to value chains), OCP Africa ($150M for local fertilizer distribution), World Food Program (will buy $120M from small farmers through a  Patient Procurement Platform), MasterCard Foundation ($30M to give small farmers market & credit info on phones in conjunction with KCB) and finally, USAID reported it had invested $6.6 billion through its ongoing Feed the Future initiative. 
$1 = 100

Britain Exits the EU: What Does this mean for Kenya?

Britain’s decision to exit the European Union (EU), as announced from the results of Thursday’s landmark “Brexit” referendum has been a hot topic around the world. 33.6 Million Britons flocked to the polling booths on Thursday with the ‘leave’ campaign marginally taking the victory with a 52%-48% vote. There is however a general consensus of uncertainty with what the UK’s (United Kingdom) decision holds for the future, with particular relevance to what it means for Kenya. Britain bus

Britain is a key ally, as well as Kenya’s third largest export market with the value of exports at Sh40 Billion in 2015. The Central Bank of Kenya has already stated that it is ready to intervene and minimize disruption in money markets. Kunal Ajmera, COO of Grant Thornton Kenya provides an insight into how Britain’s decision to leave affects trade decisions and tourism in Kenya:

  1. Britain was not just any member of the EU but also one of the largest contributors and it’s most prosperous. Depending on how things unfold in the coming years other members may also demand for a referendum and this would ultimately weaken the EU substantially.
  2. The EU spends about 100 million euros per year on development co-operation in Kenya. With uncertainties over Europe due to Brexit we may see a reduced funding in coming years. We could see funding in key projects start to be cut.
  3. Investors anywhere in the world hate uncertainty and anxiety. Brexit leaves many questions unanswered and it will can take more than a year to get some clarity. Until that happens global economy, money markets and stock exchange may go through volatility and general negativity as we are currently seeing happen.Britain sign
  4. It is highly likely that US Dollar($) will gain strength against major currencies in the world and GBP(£) will lose its value, the initial figures show that on the day of the results alone, the GBP slumped to a thirty year low, falling as much as 11% in the hours after the result. This therefore means that the Kenyan Shilling will be under increased pressure. It would be wise for businesses in Kenya to hedge against a future raise in dollar value.
  5. The UK is Kenya’s largest tourist source market. At its peak Kenya received 198,000 tourists from UK in 2013. The tourist arrival numbers from the UK have only just started to increase in last few months after years of travel advisory and terror threats. However with GBP weakening due to Brexit, it will cost the British tourists more to travel to Kenya and we may see reduced number of arrivals from UK in near future.
  6. Kenya exports a substantial number of products to the UK every year. The UK is the second largest export market for Kenya after Uganda. So far these exports were governed by EU trade laws. With UK exiting the EU, Kenya may need to re-negotiate the terms for export and this may take even a year resulting in to disruption and uncertainty.
  7. In the immediate short term, the UK is bound to have slower economic growth or even recession due to the Brexit referendum. This will also affect how it trades with other countries in the world. Since the UK is one of Kenya’s biggest trading partner, businesses in Kenya that export to the UK are bound to be nervous and must prepare for slump in business.

Britain look rightHowever, Kunal offers consolation by highlighting the potential in this decision. He states, “It’s not all doom and gloom. Brexit also presents new set of opportunities. EU laws on import and export are some of the most stringent in the world especially with agriculture, dairy, and meat items. The UK can now decide its own rules for import and export, new products may become eligible. It is worth noting that Kenya’s largest export to UK is agriculture/horticulture products.”

For further insight into the Brexit developments and its implications keep following Grant Thornton Kenya on twitter and Facebook.

YALI 2014

The Young African Leaders Initiative 2014 – #YALI2014 kicked off this week in Washington DC. Speaking at a meeting with 500 of the first class of YALI fellows, President Obama said that it will be renamed the Mandela Washington Fellowship (& doubled to have 1,000 fellows by 2016) and that four regional leadership centers would set up in Africa.

The regional leadership centers will be established in Senegal, Ghana, South Africa and Kenya and will offer courses on leadership, support for entrepreneurs through mentoring and access to capital and a networking forum. 

The Center in Kenya will have a robust training curriculum with direction from a partnership that brings together Deloitte’s global management and strategy skills, the established curriculum and capacity of Kenyatta University, the public administration training of the Kenya School of Government, and Africa Nazarene University’s youth engagement and outreach.

USAID is investing $38 million in the new YALI centers with support from the MasterCard Foundation ($10 million), Microsoft ($12.5 million), Intel ($5million) and Dow Chemical ($4 million). Others are McKinsey, IBM, General Electric, Procter​&​​G​amble and the Mara Foundation. (More at the YALI site). 

In a Q&A session, Obama also spoke about AGOA and the on-going  for renewal of the the trade partnership between the US & Africa; He said, they have learnt lessons from the previous phase of the partnership and will work to lower other export barriers (such as transport & trade finance), and, starting with Uganda, Kenya and Tanzania, take steps to see how AGOA can work with effective trading bloc for intra-Africa trade.
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The YALI Summit events will lead up to the the first US-Africa Leaders Summit, which, with over 50 presidents & prime ministers expected, is the largest gathering of African Leaders ever hosted by a US president.

Kenya’s President Kenyatta is to participate in two events next week – a doing business in East Africa session and a presidential dinner, both organized by the Corporate Council on Africa (CCA) who have events for several other African leaders and nations like Ethiopia, South Africa, Ghana Liberia Congo  Mozambique and Tanzania among others.

Possible Economic Bubble In Ethiopia?

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A guest post by @Kahenya
Ethiopia has a very positive economic outlook and yes, it has a lot of development going on, but is this sustainable, now that the linchpin (Meles Zenawi) is gone? The one thing that is universal about the entire continent is that the poverty line seems to grow every year, sometimes it shrinks, but only for a moment. The cliché remains, that the rich are getting richer and the poor are getting poorer and there is no true middle class –  and if there is, its only based on people who don’t want to imagine that they are less than middle class.
Africa is the kingdom of billion {insert any local currency here} projects. Ethiopia also finds itself in the same quagmire, except for one thing. They are actually making it work for their benefit. In Ethiopia, construction and infrastructure development are at an all time high. It was necessary for this to happen until Meles Zenawi and his beloved Ethiopian People’s Revolutionary Democratic Front (EPRDF) went their separate ways, much to the disadvantage of EPRDF. Zenawi’s rule transited between dictatorship and benevolence and it was working for him and Ethiopia. Love him or hate him, from being out in the rebel trenches to donning a suit, Meles was every bit a tactical genius. He grew Ethiopia from a war torn country to one of Africa’s fastest growing economies. Only Meles could conjure up infinite possibilities. – sometimes by sheer cunning and sometimes by sheer fear.
Hotel cautions on using skype
EPRDF needed Meles to live long enough to get to his end game which would have allowed EPRDF to focus on less ambitious but more people driven development. That did not happen. With him gone, and an open democracy in the horizon (since every linchpin’s death or retirement is followed by internal crisis and eventual dissolution, with less political tolerance by the citizens), with a lot of projects still incomplete, and with Ethiopia still facing many financial challenges, the positive economic outlook has quickly shifted from “going to happen” to “may happen”.
EPRDF has moved from the strong offensive, to a sullen offensive-defensive. Push-Pull. Addis, like Luanda, Angola, defies Economic Science. If you buy a vehicle in Ethiopia, when you sell it, even years later, the value generally appreciates. Rents and property rates are astronomically high, coming close to rivaling Luanda – a huge developmental Achilles heel.
Lunch at the  Sheraton in Addis
The key driver of such high rates is the presence of Diplomats and NGOs who have an unending well of money – and this is where the very living ghost of Isaias Afewerki (President of neighbouring Eritrea) comes to haunt Ethiopia. Eritrea, despite being poor, is not dependent on Foreign Aid or NGOs. They have that to pride. For Eritrea, there are no illusions. Poor is poor so the only way is to go upwards – on their own. Ethiopia lacks that. Instead, they have to endure a very faint cushion, one that is rarely successful except in dire times. Unless Ethiopia starts equal distribution of development in the small business sector and begins to really crack the whip on poverty alleviation and shakes off its dependency on NGOs, EPRDF could find itself in a lot of trouble – just like the ANC is, despite them trying to conjure all sorts of ghosts, from Jacob Zuma’s incarnation of Umshini Wami to the very living ghost of Nelson Mandela. Nonetheless, Ethiopia’s economy is about to get a very shocking reality check.

Rockefeller helps Farmers cope with Climate Change

The Rockefeller Foundation involvement in Africa goes as far back as 1914 and one of their goals is to strengthen food security in sub-Saharan Africa.

Climate change is affecting food security and the current floods in Pakistan attest and African farmers are seeing wild swings in weather, coping with higher temperatures, less dependable rainfall, and experiencing longer droughts. In Kenya, the Rockefeller Foundation estimates that maize production could decline by 30% in the next 20 years.

Africa countries need to recognize their vulnerability to climate change as ½ billion people depend on agriculture for their livelihoods, yet some governments are instead selling off buying tracts of productive land to other countries who are themselves investing to enhance their own food security through geographic diversification

The Foundation has thus made agricultural investments improve their productivity of farmers by reducing the risks they face through key innovations including

– Developing new affordable insurance products for small farmers & pastoralists that are indexed to weather; this encourages farmers to increase land & agricultural investment with the knowledge that they may be compensated if weather conditions adverse affect their harvest

pastoralists & their cattle camp in Nairobi’s kileleshwa suburb during 2009 drought

– Funded the World Food Program to develop a software platform to predict most destructive elements; Known as RiskView, it can be customized or every district in every country in Africa and allows governments and aid agencies to when and where a drought will occur.
– Funded Kencall to implement a national helpline for farmers, staffed by a team of experts to answer farmer question on climate change, seeds, fertilizer, agro-dealer location etc – this will help overcome a challenge many famers don’t try new techniques or seeds because they don’t have enough information to take a risk. The information collected will become a research resource even outside Kenya.
– Partnered with Kenya-based Alliance for Green Revolution in Africa (AGRA), in a $50 million loan program through Equity Bank’s ‘kilimo biashara’ program in which the Foundation undertook some risk guarantee enabling the Bank lend to small farmers at below market risks who take up other products like fertilizer weather insurance, and use the help line.

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