16 Aug

Africa: ‘Recovery Lending’ Helps Disaster-Stricken Farmers Get Back On Track

microfinance

Accessing credit has long been a major hurdle for small-scale farmers in Africa, who produce some 70 percent of the continent’s food. Not only does this mean yields fall far below their full potential, but the ability of farmers to manage the increasingly frequent and severe weather shocks brought about by climate change is also greatly reduced.

However, help could be at hand. A new method of aid microfinancing, known as recovery lending, aims to give such farmers a much-needed short-term boost, especially in times of crisis.

Vision Fund International (VFI) is a project of the international NGO World Vision. It sourced a two-million-euro returnable grant from the UK’s Department for International Development to be loaned to 14,000 families in Kenya, Malawi, and Zambia after disasters so they can rebuild their lives and start generating income again.

Farmers need loans at the beginning of agricultural seasons to buy seeds, fertilisers, and other vital inputs. But as smallholders often lack title deeds or other forms of collateral, traditional banks don’t view them as viable debtors, while the rules imposed by other kinds of lenders – the return of the principal sum in full, for example – don’t always suit the seasonal economics of farming.

Charity Mati, VFI Kenya’s business development and integration manager, explained that the lender tries to tailor its repayment terms to borrowers’ needs, unlike other microfinance institutions that charge interest every month, leaving the entirety of the loaned sum due on maturity.

“Most of our clients are farmers,” Mati told IRIN. “While recovering from the El Niño rains, they were met with a second shock: the drought. We sat down with them and developed workable repayment plans, listened to their voices, and arrived at a solution,” she told IRIN.

A case study

In 2015, Alice Muthee, a smallholder farmer in Motonyi, a village nestled in Kenya’s Narok County, took out a $200 loan from a microfinance organisation and leased an acre of land with the aim of turning a good profit from growing tomatoes.

“With five mouths to feed, in addition to the pressure of educating my children, life had seemed overwhelming,” recalled Muthee. “I had had to sell livestock to meet the rising demand for finances in my family.”

Muthee believed her tomatoes would bear fruit and she would be able to repay the loan within three months.

But tomatoes are a notoriously fickle crop and certainly no match for the El Niño rains that wreaked havoc in late 2015, not only in parts of Kenya, but also in Somalia, Uganda, and Ethiopia.

“From the cost of leasing the land, labour, purchase of seedlings, and fertiliser, I ran a deficit,” Muthee told IRIN. “My several attempts to have extra money for buying pesticides failed. When the 2015 rains persisted, I watched helplessly as my tomatoes disappeared.”

Facing the daunting prospect of having to sell more livestock in order to repay her loan – the terms of which required full settlement of the principal sum in a single payment at the end of the agreed period – Muthee heard about a new kind of finance geared specifically for small-holder farmers, small businesses, and communities recovering from disaster shocks.

‘Hand up’, not ‘hand out’

Recovery lending, described as a “hand up” rather than “hand out” approach, was pioneered by VFI in the aftermath of 2013’s Typhoon Haiyan in the Philippines, with the disbursement of almost 5,000 loans with an average value of $430 designed to help people restart their lost small businesses.

According to Philip Ochola, CEO of Vision Fund Kenya, in the wake of major disasters, many microfinance institutions grow reluctant to continue extending loans because potential customers lack collateral and are seen has having little ability to make repayments.

“Credit is required most during post-disaster to help rebuild communities,” said Ochola. “Governments’ help to affected communities during disasters usually come in form of relief, which is not sustainable.

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“Preparing the communities for loans, helping them establish business and embrace agri-business is the sustainable assistance you can give to a vulnerable community.”

VFI distributes loans on the basis not of lenders’ available collateral but on an assessment of their likely ability to repay. It then provides business training to its customers.

Muthee took out a $300 recovery loan from VFI, which she invested in growing vegetables and starting a business selling second-hand clothes. She has since been able to settle her previous loan and pay her children’s school fees.

Aid, with conditions

In all, VFI has loaned out some $1.2 million in Kenya.

“DFID gave us the money not as a grant to dish out in the field, but a returnable one to be used wisely, lend it wisely, recover it, and pay back. Aid with conditions is good,” said Ochola.

“Aid is aid and human beings are human beings. If I know that appearing as poor as possible will make me continue receiving charity from you, I will always want to appear that way. But if it comes with conditions, it will help me get on my feet, stabilise, and work.”

Among the other beneficiaries is 38-year-old Chiwai Ole Taka, a father of six who lost seven cows and 10 sheep during a severe drought. He used his $300 loan to buy weak sheep and goats, which, thanks to the training that came with the loan, he fattened up and sold for a profit.

“It is not the first time that I have lost livestock to drought. It has happened before. This drought threatened to drive our community to extreme poverty,” said Chiwai, adding that he was now much better placed to meet his family’s basic needs.

Recovery lending was the result of joint research by Stewart McCulloch, global insurance director of VFI, and Professor Jerry Skees of GlobalAgRisk. The thinking behind the initiative was published in a report titled: A New Model for Disaster Preparation and Response for Microfinance Institutions.

“Recovery loans are not suitable for the highly indebted or those without viable cash-generating livelihood options; but rather for the economically active poor, including (but not limited to) those not normally targeted for humanitarian aid,” the report says. “The support to this group should have a disproportionate effect on the community’s economic recovery.”

While Alice Muthee could be a poster child for the success of recovery lending, others like Ole Peres have found themselves unable to keep up with VFI’s terms amid multuple climate shocks.

Peres, whose maize was destroyed by rains, had trouble making the $55 monthly repayments on a $300 loan.

“I obtained a second loan of $450 where I bought 10 sheep for fattening, but the drought killed five of them. With a monthly loan repayment of $40 for a 12-month period, I sold the remaining animals I had bought and ventured into maize buying and selling at a profit, but have been faced with shortage,” he said.

Peres is now in even greater debt and seeking a reduced interest rate on his loans.

The UN’s World Food Programme has flagged estimates that hunger and malnutrition could increase by up to 20 percent by 2050 if bold efforts to improve people’s ability to prepare for, respond to, and recover from climate shocks aren’t undertaken.

Recovery lending is not a panacea for all the problems African farmers face, but it is helping.

Author Note

Part of a special project that explores the impact of climate change on the food security and livelihoods of small-scale farmers in Kenya, Nigeria, Senegal and Zimbabwe

 

Source from IRIN

14 Aug

Nigeria: Prepare for Life After Oil, Govt Advises Amnesty Beneficiaries

oil

Port Harcourt — As the world marked the United Nations 2017 International Youth Day saturday, the federal government has warned youth in the country, especially beneficiaries of the amnesty programme in the Niger Delta region to prepare for life after oil.

Speaking at a forum to mark the event in Port Harcourt, the Presidential Adviser on the Amnesty Programme, Gen Paul Boro, called on the Niger Delta youths to prepare for life after oil by making use of the skills, knowledge and experience they gained while undergoing training.

The forum was put in place by a non-governmental organisation (NGO), Nevido Media in collaboration with the NOA with the support of the Nigerian Youth Council and other bodies.

Boro called for paradigm shift in thinking and focus among the youths and beneficiaries of the amnesty, saying, “since it has become clear that oil will not last forever, there is need to prepare the youths for the future.”

He noted that the federal amnesty programme had the mandate to train 30,000 youths, out of which it had already trained 16,000.

Represented by the Head, monitoring and evaluation in the federal amnesty, Mr. Bestman Probel, Boro explained that this was why “the youths have been drawn into training in agriculture and skills while an exit programme whereby the youths after training are mobilised to start practicing the trade they learnt”.

In his remarks the Rivers state Director of NOA, Mr. Oliver Wolugbom, expressed concern that Nigerian youths have abandoned the old cherished value system and taken to kidnapping, cultism, armed robbery, thuggery and other odious practices that debase humanity.

“It is equally a source of concern that all the centrifugal forces such as separatist movements by ethnic bodies and their accompanying hate speeches are being bandied by the youths”, he said, adding that for peace to be built in the society, the youths must be properly positioned while the leadership re-strategise to plan

From allAfrica

14 Aug

Nigeria: How New Farming Initiative Is Transforming Lives in Nasarawa Community

farmers

Gaate is about an hour drive away from the Abuja municipality. But this rural settlement along the Keffi-Akwanga road in Kokona Local Government Area of Nasarawa State could as well have been in another country. Blessed with vast arable land, majority of the residents are subsistent farmers and neither dream or feel the glitz of the Nigerian federal capital.

The community has no basic amenities, so the people depend on another community far away for even health care services as there is no facility for such in the village. Their only primary school is in ruins and the impact of this is evident as only very few of the residents attempt to communicate in English.

But change appears to be creeping into Gaate village. A cooperative farming society, Nigerian Farmers Group, NFG-CS, is raising the living standard in the community following an agreement that gave the group part of the community’s land to kick start a cooperative farming model.

“We had an agreement with the cooperative to farm on our land for five years and things have improved for us ever since,” Ibrahim Adamu, the village head of Gaate told PREMIUM TIME’S reporter through an interpreter on Saturday.

“Our major challenge is hunger due to poverty. We are local farmers and we do it on a very small scale. Before, there was no road to this place but when this cooperative came, the first thing they did was to create a road.

“About 200 people from this community have been employed to work in the cooperative’s farm. We plant the farm and also work as security and get paid on a daily basis. People who don’t have what they do now have work and are helping their families,” Mr. Adamu said.

“Apart from employing our people, this cooperative also promised to build a new primary school for us as we don’t have any school that is functional or even a health care centre. We really appreciate this farming initiative in our community and we support them.”

Aisha Gako, a local farmer employed by the cooperative, said she is paid N1,500 daily.

“Because of this farm, we can now eat and take care of our family. We plant maize and work on the farm every day after which we receive N1,500,” she said.

For Ibrahim Karshi, the upturn in fortune is massive since his first taste of paid employment in the village. Doubling as a security guard and farm worker, he said he gets paid twice daily.

“I’m employed as a security in this farm. I used to work as a security man in Abuja; so, when this cooperative came in, I saw it as an opportunity to do the job I was doing in Abuja here in my home for a better pay. I also work at the farm.

“We work from 8 a.m. to 1 p.m. then go on a break and continue from 2 p.m. to 5 p.m. Then we guard the farm at night. I receive N1,000 as security and N1,500 for working in the farm every day.

“The only challenge we are having sometimes are the Fulani herdsmen. Their cows enter the farm but we are trying to build a blockade so cows can no longer enter. There was a land dispute between us and the herdsmen which resulted to a man’s hand being chopped off.

“But we have resolved the issue,” Mr. Karshi said.

In spite of the transformation their community is experiencing, the people say government has no reason to continue to ignore Gaate.

Adamu Baba, the youth leader of the community, who also spoke, decried government’s lack of concern for the basic needs of the community.

“We don’t have a secondary school, we only have a primary school but it’s not good at all. As you can see, it’s not functional. There is no health care centre. We have to carry our people to far away Sabon Gida if there is any health emergency.

“We have so many emergencies, which can be addressed if we have help near us. It is a problem. We have had a case where a pregnant woman lost a baby because there is no health assistant around. The government should help us and also assist this farming cooperative.”

Source from allAfrica

08 Aug

Kenya: Polls Open in Centers Countrywide Amid Tight Security

Nairobi — Polls have opened in Kenya's high stakes election

Nairobi — Polls have opened in Kenya’s high stakes election, with voters having started streaming to polling stations as early as 1am.

Voting has already started in most parts of the country.

Anxious voters camped throughout the night at various polling stations ready to cast the vote on Tuesday morning, signaling a likely high voter turnout in the Kenya vote.

At the Moi Avenue Primary School Polling Station in Nairobi’s Starehe Constituency, hundreds of voters started lining up at 11pm and more were streaming in at 1am, five hours ahead of 6am when polls were set to open.

“I thought I am the only one coming early… I am surprised at the number of people here and the more that are coming,” Peter Mureithi said, having joined the queue shortly before midnight Monday.

The polling station is the largest in the city centre, and the queue was already past the Globe Cinema Interchange a few meters from Moi Avenue.

Most of the voters who chose to spend the night at the poll station were hawkers from around the city who wanted to vote early and carry on with their work.

“It was easier for us to stay here than go home then come back here early in the morning. We have our jobs to do and our families to feed but we also want to exercise our constitutional right to vote for the leaders we want,” one of the voters who identified herself as Muthoni said.

Another voter added: “There is no sleeping today. If we have to, we will do so while sitting here. We want to be among the first ones to vote and by 9am all of us should be back to work. Above all, we want to vote peacefully.”

The call for peace resonated with everyone we spoke to with all calling for restraint and people to accept the results.

“Everyone has a right to vote and we should all be ready to accept the results. There is no need to fight because of elections. We are all Kenyans irrespective of tribe. If we fight, will any of the candidates come to bring us food in our houses?” Calvin Otieno, another voter said after joining the queue at midnight.

Another one added: “These politicians always say we are the stupid ones because for them at the end of the day they will be friends, call each other brother and son while we are fighting with each other for them. We must be friends too.”

There was heavy security at the polling station, with more than 10 police officers patrolling the area.

Starehe is one of the constituencies in the city which will witness a bare knuckle fight for the new Member of Parliament with the battle pitting youngsters; businessman Steve Mbogo, musician Charles ‘Jaguar’ Njagua and activist Boniface Mwangi.

via allAfrica

07 Aug

South Africa’s unemployment stays at 14-year high in second quarter

South Africa’s unemployment stays at 14-year high in second quarter

South Africa’s unemployment rate stayed at a 14-year high in the second quarter, with the statistics agency saying on Monday the country was in a “precarious position” of not creating enough jobs to make a dent in poverty.

The unemployment rate remained unchanged at 27.7 percent of the labour force in the second three months of this year, with the absolute number of unemployed down slightly to 6.177 million from 6.214 million, data from the statistics office showed.

Africa’s most industrialised economy has sunk into recession and had its credit rating downgraded to junk by two of the three main credit rating agencies. In July Stats SA said nearly a fourth of all households are in poverty.

Statistician General Pali Lehohla said the real economy, which includes mining and manufacturing, was not creating enough employment.

“We are in a very precarious position as South Africa in as far as exiting poverty. The type of strategy that can make us exit poverty is when people are working,” Lehohla said.

“This kind of poverty cannot be resolved by social grants and the like. That type pf poverty is solved if people are doing work and being productive,” Lehohla said.

Although South Africa’s economy contracted for a second successive quarter in March, economists expect positive growth in 2017, but warn that political turmoil and regulatory uncertainty will continue to hamper investor sentiment.

Chief economist for Africa at Standard Charted, Razia Khan, said agriculture and mining were the only sectors that grew meaningfully in the first quarter of this year but actually experienced job losses in the second quarter.

“With a significant uplift to growth performance unlikely to be on the horizon just yet, there is little to suggest a meaningful pick-up in job creation for some time,” she said.

The rand shrugged off the unemployment print, with market focus on the no-confidence motion against President Jacob Zuma on Tuesday. As of 0825 GMT, the rand was trading at 13.4025 per dollar, 0.13 percent firmer than its close on Friday.

Zuma faces a no-confidence vote in parliament on Tuesday brought by opposition parties. The ruling African National Congress says its members would rally behind Zuma and vote against the motion.

Additional reporting by Olivia Kumwenda-Mtambo, Editing by James Macharia and Angus MacSwan

Article from CNBCAfrica

07 Aug

SA facing a skilled-worker ‘brain drain’ as 7% of whites have emigrated since 2002

South Africa is facing a skilled-worker ‘brain drain’

South Africa is facing a skilled-worker ‘brain drain’ as 7% of whites have emigrated since 2002.

Figures published in BizNews have highlighted South Africa’s overall population growth since 2002, and life expectancy has risen to 64 (up from 53) in that time.

The rollout of free antiretroviral treatments for HIV and AIDS patients has made a huge difference to SA’s health landscape, and the country is now home to more than 56m citizens; it’s highest ever total.

However, as the population rises, there is a hole right in the middle of that data – the white population is somewhat shrinking, as the calls to find ‘a home from home’ have grown ever stronger and convinced more to leave.

How many whites live in South Africa?

The net emigration of Whites is estimated at 327,000, or about 7% of the population. This has left the number of Whites in 2017, of 4.49m, down by -62,000 in the last 15 years.

In contrast, there has been a 10.18m increase in the Black African population, to 45.11m at present and a 1.05m increase in the Coloured population, up to 4.96m, in mid-2017.

 

South Africa is facing a skilled-worker ‘brain drain’

South Africa is facing a skilled-worker ‘brain drain’

The research was carried out by Econometrix’s chief economist Azar Jammine: He feels that the whites leaving the country are able to do so because their skill sets are attractive to lucrative foreign businesses:

“There is an argument for being very concerned about the decline in the population of Whites due to emigration. Many of those who emigrate are drawn presumably from the most highly skilled sections of society and their departure from the workspace is likely to impact negatively on the capacity of the economy to grow at a faster rate.”

“It is debatable whether the inflow of skilled persons from the rest of the African continent is sufficient to counteract the outflow of skills from large-scale emigration of Whites.”

South Africans working abroad

The growth rate in the population of persons between the ages of 15 and 34 has fallen from 2.48% to just 0.18% over this period. With education standards languishing, current figures suggest we will have less people available to adequately carry out the services SA needs to function

07 Aug

Invest in Nigerian agriculture from anywhere in the world

invest in the Nigerian agricultural sector, anywhere in the world.

Farmcrowdy is a Nigerian online platform which allows users (sponsors) to invest in the Nigerian agricultural sector, anywhere in the world.

Sponsors can choose what kind of farms (and crops) they want to invest in. Farmcrowdy then uses the investment to: secure land; engage and train the farmer in best agricultural practices; plant the seeds; insure the farmers and crops; complete the full farming cycle; sell the harvest; and then pay the farm sponsor a return on their investment. Sponsors are able to keep track of the full cycle through updates in text, pictures and videos.

Farmcrowdy founder, Onyeka Akumah, tells us about the risks facing the business and his most exciting entrepreneurial moment.

1. How did you finance your start-up?

We received seed funding from a Lagos-based investment house when we first launched in 2016. This was to get the idea to the market effectively. Following up on that we have also been selected as the only African start-up to participate in Techstars Atlanta this year. The funding from this programme has come in handy to get us to the next level.

2. If you were given US$1m to invest in your company now, where would it go?

3. What risks does your business face?

  • Biological risks which could cause pest and disease contamination. If our farms were exposed to biological risks, it would lead to lower yields and loss of income.
  • Currency fluctuation which can increase the cost of production, and in turn, affect the spending power of our farm sponsors.
  • Government policies which can influence (positively or negatively) our cost of operations and market access.
  • Civil unrest which could affect our farms and farmers
  • Supply-chain risk, including logistics and infrastructure, which could lead to food waste and create post-harvest losses.

4. So far, what has proven to be the most successful form of marketing?

Referrals from one sponsor to another, encouraging them to participate in the agricultural revolution sweeping Nigeria. This has been majorly championed by word-of-mouth testimonials about the success we have had with our farmers and the relationship with our farm sponsors.

5. Describe your most exciting entrepreneurial moment.

My most exciting entrepreneurial moment has been being able to build a company out of an idea that was just on some paper. Seeing this idea grow, employing people to work on it and make something meaningful, and creating value for people we call customers, has been thrilling. This has been the most exciting part of my journey – moving from idea to business, to employer of labour, to value for customers.

6. Tell us about your biggest mistake, and what you’ve learnt from it.

The biggest mistake has been hiring the wrong people in the early stage of the business and working with the wrong technology partners. This can have a devastating effect on the success or failure of your business, and over time I have had to make hard decisions and let people go.

Going forward, we are proud of our current team. We are proud of the passion they bring to change lives and the selfless will to change the world one farmer at a time. I consider myself one of the luckiest people in the world having smart people around me, looking to solve an ambitious but real problem.

[Source from HowWeMadeItInAfrica]

26 May

South Africa’s Zwane Seeks 30% Minimum Black Mine Ownership

South African Mines Minister Mosebenzi Zwane has proposed raising the mandatory black ownership of mining assets to 30 percent from 26 percent, drawing opposition from some ruling-party officials who fear it will deter investment, two people familiar with the situation said.

The proposal is part of a long-delayed draft mining charter outlined by Zwane, an ally of President Jacob Zuma, to the African National Congress’ economic policy committee on May 13. Senior party policy officials warned of the potential negative consequences of his plans, said the people, who asked not to be identified because Zwane hasn’t formally proposed the changes for public comment before they become binding.

Zuma’s cabinet on Wednesday approved the draft mining charter, which will be released for public comment once it has been gazetted. ANC spokesman Zizi Kodwa didn’t answer calls seeking comment. It’s unclear whether the cabinet demanded changes.

South Africa’s Chamber of Mines said this week that the government needs to finalize its mining regulations if falling investment in the industry is to be reversed. Zuma, who’s due to step down as leader of the ANC in December and as the nation’s president in 2019, has called for “radical economic transformation” to more fairly distribute the benefits of South Africa’s economy among the black majority.

Read more: South Africa’s Zwane Seeks 30% Minimum Black Mine Ownership

16 May

Britain’s Equinox to invest $250 million in Kenya bio-gas power project

Britain’s Equinox Energy Capital is close to concluding a $250 million (£194 million) fundraising round to invest in a project in western Kenya to produce electricity from invasive lake weed water hyacinth, the Kenyan presidency said on Friday.

Water hyacinth has choked off large parts of Lake Victoria, a fresh water lake that straddles Kenya, Uganda and Tanzania, and has alarmed environmentalists with its spread over the past two decades.

The government has had little success in eradicating the weed, which now covers the lake’s surface like a carpet of grass, cutting off local communities from vital fishing grounds and choking regional ports.

The project will be developed in phases and it is envisaged having annual capacity to produce 35 megawatts when completed. Construction is due to start this year and is expected to last 12-18 months, an official at the company said.

The first phase will have 8 MW of capacity and the plant will be located in the western county of Homa Bay.

The power plant will use the bio-gas method, harvesting the hyacinth, using bacteria to break the sugars in the weed into methane gas that can then be burnt to produce electricity, Chris Evans, an associate at Equinox, told Reuters.

He said the company is negotiating with Kenya Power, the country’s main electricity distributor, to allow it to inject the electricity into the national grid.

Distributed by: REUTERS

12 May

Nigeria Parliament Approves 21% Budget Hike to Boost Economy

Nigeria’s lawmakers approved to boost spending by 21 percent this year’s budget to help the West African economy recover from its worst slump in 25 years.

The Senate, led by its President Bukola Saraki, agreed on Thursday in the capital, Abuja, to increase spending this year to 7.4 trillion naira ($23 billion). That compares to a budget of 7.3 trillion naira that President Muhammadu Buhari proposed on Dec. 14. The House of Representatives, the National Assembly’s lower chamber, approved it earlier Thursday.

Nigeria’s economy, which vies with South Africa’s to be the largest on the continent, shrunk by 1.5 percent last year, the first contraction since 1991, after revenue from oil, its biggest export, fell by almost half. About 30 percent of the budget will be spent on roads, rail, ports and power to help stimulate business activity.

The government should implement the budget quickly “to boost the economy and take it out of recession,” Michael Famoroti, an economist at Lagos-based Vetiva Capital Management, said by phone. Spending on capital projects to promote exports and in the oil-producing Niger delta region, is expected in the second half of the year, he said.

The spending plans assume daily production of 2.2 million barrels of crude oil sold at $42.5 per barrel, and an exchange rate of 305 naira per dollar, according to budget documents. This was unchanged from Buhari’s proposal, the chairman of the Senate’s Committee on Appropriations, Danjuma Goje, told lawmakers.

The government’s oil-production target may be reached in the second half of the year as “oil revenue is expected to be strong,” according to Famoroti. If non-oil revenue doesn’t increase, Nigeria might face “another under-performance of the budget.”

Foreign-currency shortages in the country forced the central bank to introduce multiple exchange rates, with the main rate at 315 naira per dollar, more than 20 percent cheaper than the street price.

The two chambers of Parliament debate and approve spending plans separately before harmonizing their proposals into a single document sent to the president to sign into law.

 

Read more: Nigeria Parliament Approves 21% Budget Hike to Boost Economy