Certainly, there are a host of
Indian businesses with tropical
agriculture expertise to sell, from
post-harvest treatments for fruit
and vegetables to specialised
seeds and fertilisers. The Indian
Dairy Machinery Company
(IDMC), for example, which is
partofIndia’sDairyDevelopment
Board, has built milk treatment
equipment from “the cattle to the
customer”, as its marketing blurb
suggests. It already supplies one
of the companies recently bought
by Kenya’s Brookside Dairy. For
IDMC’s acting managing director
Rajesh Subramanian: “We are
equal to the Europeans in quality
and just 60% of the price.”
CHOCSAWAY
But beyond the push to get
African countries focused on
commercial agriculture, the
AfDB is also trying to get them
to climb out of the bottom rung
of primary product creation.
“Africa, which produces 75% of
the world’s cocoa, receives only
2% of the $100bn annual choc-
olate market. African farmers
sweat, while others eat sweets,”
says Adesina. “While the price
of cocoa has hit an all-time low,
profits of global manufacturers
of chocolates have hit an all-time
high. It’s time to process Africa’s
cocoa in Africa, for we must end
Africa being at the bottom of
global value chains.”
That will take some fresh think-
ing about industrial policy. The
AfDB’s new chief economist,
Celestin Monga, has released a
book detailing success stories in
building special economic zones.
The AfDB plans to launch a new
financing programme to support
the creation of agricultural zones
across the continent, as well as
new financing mechanisms for a
new generation of ‘agripreneurs’,
several of whom were present
during the meetings. That will
take cash, so Adesina’s next fight
istoconvincetheAfDB governors
that the harvest is worth it and
that they should support a capital
increase in the bank. “There is
gold in that dirt,” he promises.
Nicholas Norbrook
in Ahmedabad
The sun also rises...
The commodity supercycle is a thing
of the past, and after a decade of largesse
China’s major infrastructure spending
has slowed. Mining companies in Africa
have paid their dues, spending the
past two years restructuring their balance sheets and
recalibrating their appetites. The result, you might think,
is a newly tuned up set of miners, looking at fresh
opportunities across the continent. After all, prices for
metals are creeping up. Hallelujah! A fresh dawn for the
mining sector! Fire up the elevators, clip on the head lamps!...but the light falls unequally
But you would be thinking wrong, certainly when South
Africa – the leading minerals producer on the continent –
is suffering from some serious self-inflicted wounds.
The recent junior mining Indaba held in Johannesburg
saw dejected mining execs bemoan an ever-decreasing
ability to attract cash into the country. Standard & Poor’s
research shows South Africa got just 4% of global
exploration budgets in 2016, compared to 13% in Australia.
Partly that is due to South Africa having older mines.
But much is down to the regulatory environment,
with ever-decreasing experience and know-how among
the administrators in South Africa’s ministry of mines.A charter for chaos
And the release of South Africa’s new mining charter has
not got the miners clapping in the aisles. More than R50bn
was wiped off the valuations of mining stocks on the
Johannesburg Stock Exchange when mineral resources
minister Mosebenzi Zwane announced a new code
that demands companies increase their Black Economic
Empowerment (BEE) levels from 24% to 30% within
12 months. It also says that any new prospecting needs
to have black ownership at 50% plus one share. Foreign
investors are now warning of an exodus from South Africa.Calculations political and financial
Cynical observers suspect that there are other dynamics
at play in the release of this new set of regulations.
Zwane referred to the charter as “an instrument for radical
economic transformation”. That is the language of the
Economic Freedom Front, whose repeated calls for poor,
black South Africans to get a bigger slice of the rich,
white-owned mining sector has won them many votes,
pushing the governing African National Congress
out in several localities in recent municipal elections.
And in a scathing editorial local paperBusiness Day
argues it is not just political gains that are being sought:
“It’s not clear who inspired some of the new provisions,
and hard not to wonder if some are not a licence for
plunder by Gupta-linked Zwane and his team, via the
new Mining Transformation and Development Agency,
which will report to the minister.”73