The Hon. Senzeni Zokwana, Minister of Agriculture, Forestry and Fisheries of South Africa will deliver the keynote address and lead the way at Africa’s largest agri investment event from 28-30 November in Cape Town, South Africa (www.agri-indaba.com).
The African Agri Investment Indaba is the largest investment platform for agri business and covers the entire value chain of agriculture with an international high level conference, an exhibition area and the “Investment Discovery Sessions”. These sessions will present pre-selected African agri projects from over 12 countries and a combined value of US$ 2.6 million to African and international investors.
Deal-making and the long term growth of African agriculture are the priorities of the event, an international gathering where business and government talk the same language and come together at one table.
Speakers discuss real market opportunities across the various African regions, African agriculture as a growing private equity investment vehicle and how to create globally competitive industries in emerging markets across Africa.
“We are honoured to have the Hon. Minister Zokwana deliver the keynote address to this international audience” states Ben Leyka, Executive Director of the African Agri Council, a network of agri executives and organiser of the event.
“It demonstrates that agriculture and agri-business are on top of the agenda for African governments – we expect 5+ministers, 50+senior government representatives, 150+investors and 350+ international agribusiness leaders”.
According to the latest “Lions on the move II” report by Mc Kinsey, Africa could nearly double its manufacturing output (including agri processing) to $930 billion in 2025 from $500 billion today, provided countries take decisive action to create an improved environment for manufacturers. Three-quarters of that potential could come from Africa-based companies meeting domestic demand; today, Africa imports one-third of the food, beverages, and other similar processed goods it consumes. The other one-quarter could come from more exports. The rewards of accelerated industrialization would include a step change in productivity and the creation of up to 14 million stable jobs over the next decade.
While the potential that Africa offers is undoubted, the question remains: will it be achieved? Businesses and governments will need to work harder to capture the opportunity and come together in open forums such as the African Agriculture Indaba.
The African Agri Investment Indaba (AAII) 2016, taking place from the 28 – 30 November 2016 at the CTICC in Cape Town, is the meeting place for senior government officials, executives and entrepreneurs across the agri value chain. With over $1bn worth of projects already in our database and a growing investor participation competing for the best projects to grow their agri portfolio, AAII 2016 is the ideal deal-making forum.
The stage is perfectly set for India to take the baton of African growth, in the wake of deepening economic crisis in China, says Sujeet Sarkar, an international advisor in governance.
When the Chinese construction conglomerate, Shanghai Zendai, bought 4000 acres of land in the outskirts of Johannesburg in 2013, it promised to build the New York of Africa. The company pledged a whopping USD 7.8 billion to transform the sleepy district of Modderfontein into a metropolis, with a forest of skyscrapers along with an oasis of green space, hosting prime residences, business and entertainment centres, like never before in Africa. The planned city exemplifies and is a symbol of Chinas seemingly unbridled ambition across the African continent.
The iconic African (AU) headquarters at Addis Ababa, Ethiopia, its tallest building, further represents Chinas growing engagement in Africa, and with most of the other 54 AU member states. This USD 200m towering complex funded by China, was a gift to the AU, but it enabled Beijing to strengthen its influence and grip over Africa.
In the last one decade, China gobbled up bulk of the commodities that Africa produced, surpassing the US to emerge as the continents single largest trading partnerwitnessing an exponential growth of over tenfold, in the last one decade. According to projections made by Standard Chartereds global research, Sino-African bilateral trade is poised to hit USD 385 billion by 2015.
In its quest to secure resources in Africa, China engages in commercial diplomacy that most other countries cannot match. Beijing pitches vast trade, aid, and investment deals to resource-rich countries, and retains an almost unparalleled ability to provide low-cost financing and cheap technicians for infrastructure projects. The African model of China has largely been to provide low-interest gigantic loans with low credit ratings, and in turn, receive favourable rights to develop its nascent oil, energy and mining sectors. Through the Chinese support, the African nations augment their revenues, create jobs and further address the crying energy and infrastructure needs of their respective countries. Unlike other rich nations that impose conditions before aid is given, Chinas relationship with African countries is strictly sans a business onebut in the capacity of a democracy and human rights advisory. This makes the African-China party a win-win situation for both.
As China is interested in Africas natural resources, it is in return investing heavily in African infrastructure development. Chinese companies are involved in hydropower projects in Zambia, Gabon and the Democratic Republic of Congo. China built a mega shopping mall in Zimbabwes capital Harare, laid a ring road and an airport in the capital of Mozambique, and invested billions in Nigerias newly refurbished Lagos-Kano rail line. China has also funded coal-power stations, roads and schools in Botswana, mines in Namibia, and in Malawi it provided funds for a new parliament, a university, hotels and conference centre. The red dragon supports housing projects in bulk of the African countries. The list is endless and even includes construction of sprawling bungalows for the president and also plush ministerial buildings in some countries to ease visa hurdles. This further helps them earn lucrative favour for advancing business interests. It is difficult to come across even one African city devoid of significant Chinese presence. Such has been the spread and influence of China in Africa, over the last one decade.
But with the Chinese economy melting, the pace and magnitude of China-Africa collaboration may lose its steam. As China grapples with a weak consumer and a bleeding stock market, the ongoing Sino-Afro big-ticket infra projects could be under considerable threat. A large number of ongoing infrastructures, mining and hydrocarbon projects in Africa are expected to slow down or get aborted as a result. Chinas ambitious future road map for Africa is likely to get significantly curtailed.
Most of the African countries have been drunk on Chinas growth. As the party is over, the hangover is likely to spill across Africa too. Like China they too heavily relied on the commodity market. Commodity prices have already fallen to a 16-year low, according to the Bloomberg Commodity Index, tracking 22 raw materials. Hence the China slowdown would exacerbate problems in African countries that depended on high commodity prices to balance their books. This would further paralyze the African nations ability to continue with the existing mining and hydrocarbon projects, let alone investing in any new exploration. Having burnt their fingers, African economies will learn to wean their extreme reliance on commodities as China is presently doing the same. As China re-balances, other commodity driven economies in Africa too needs to re-balance. This would not only see a significant spurt in the number of the Stressed Assets but also availability of future hydrocarbon and mining asset at a splendid premium, in Africa.
Despite the perceptible worries, it will be overblown to say that China will no longer be a major player in Africa. However the stage is perfectly set for India to take the baton of African growth, in the wake of deepening economic crisis in China.
India is lagging far behind China in Africa, with bilateral trade limping to clock a staggering USD 100 billion in 2015. Prime minster Modi needs to give a facelift to the relationship between India and Africa, and central to accomplishing that will be enhancing the economic ties with the African nations. It is imperative for India to ride the China slow-down and aggressively expand its economic footprints in Africa.
Finance Minister Arun Jaitley should explore the possibility of shoring up the financial capacities of the PSU oil and energy majors, so that they can go for an extended shopping of stressed hydrocarbon assets and mining leases available at a premium now. The PSU giant can further bid for the newer ones with the Chinese resistance on the wane. India should spare part of its swelling foreign exchange reserve for the said purpose, if required. This would secure the long-term energy supplies needed to sustain Indias rapid industrialization and further support its aim to emerge as the global manufacturing hub for the World. Key players of the private sector should be encouraged to lock down favourable heavy infra projects like mass transit systems and power projects by creating an enabling environment, with desired political back up.
India has always suffered from myopic view when it comes to engaging with Africa. Indias inherent weakness in foreign policy lies in pursuing the entire Africa with one bloc-one strategy, despite the countries being so diverse in terms of their political and economic outlook and needs. This has shackled India to register an impressive growth in trade and bilateral ties. Like China, it is imperative for India to build a privileged relationship with African countries by comprehensively engaging with each of them independently, while respecting their larger identity in the AU. India should develop country specific road map and aid packages for the smaller African nations. This would provide the leeway to advance its political and business interest.
A few may argue the prudency of the strategy of doling out resources to others, when it has a never-ending list of problems, of its own. India will always have its share of problem, but that should not deter India from playing a broader international role, if it aims to be a global superpower. India is further blessed with a rather prosperous diaspora in bulk of the African nations. Unlike Middle East, the Indian diaspora in Africa enjoys tremendous political clout and influence due to its contribution in building local economy with successful commercial ventures. Like the US, the diaspora in Africa too can weave the same magic, if the South Block can carefully harness the untapped potential.
India must think beyond hosting the monotonous and magnanimous African summits, as it holds no value other than rubbing shoulders with the second rung African leaders of not much relevance. The event does not have the rigour and bite to dig deep in Africa and expand Indias political and commercial footprints in Africa. A comprehensive and progressive policy of pro-actively engaging with AU should be developed instead of a peripatetic posting at AU. The next driver of global growth is going to flow from Africa and India should not be lagging behind in the race. It is time to catch up in Africa, if Indian aspires to retain its global ambition.
(Sujeet Sarkar is an author and works as an international advisor on governance. He writes columns on international affairs)
Coal and renewable energy executives at climate conference in Paris clash over future energy mix as value of storage brought to the fore.
Leading executives from the solar and wind industries went on the offensive this week at a climate conference in Paris, telling coal executives that renewable energy is the future, and that they had better get used to it.
Responding to comments from Tony Hayward – chairman of mining company Glencore – that “solar is not the answer to broad scale industrialization”, SkyPower chief executive Kerry Adler retorted: “Solar is the new world. You’ve got to get used to it.”
The power executives were attending a Paris business summit on climate change, six months prior to November’s highly anticipated UN
conference on global climate change, which is set to be represented by 200 countries.
Glencore’s Hayward told the audience that it is simply not possible to remove coal from the energy mix, particularly in growing countries such as India, which will require a steady, reliable power supply if the economy is to reach its potential. To that, SkyPower’s Adler pointed to the falling costs of storage, arguing that solar and wind could “easily supply” large amounts of cheap and reliable power to countries like India.
Adler’s stance was backed by the chief executive of Acciona group, Jose Manuel Entrencanales Domecq, who remarked that it was “absolutely possible for renewable to provide baseload electricity in emerging markets” provided electricity grids were properly integrated.
The coal industry is evidently feeling the pinch as the world continues its slow but noticeable pivot away from fossil fuels. Hayward said that coal is the best choice for meeting the power needs of countries such as China and India right now, adding that wealthier countries must help developing nations transition from polluting to clean technology.
“Unless what we deploy allows China and India to complete their industrialization in a different way to the way we industrialized then we are simply shifting the deck chairs on the Titanic,” he said.
Rachel Kyte, a climate envoy for the World Bank, revealed that China is hoping to have in place a national emissions trading system by next year – a development that could potentially prompt many other countries to follow suit.
A report by the International Renewable Energy Association (IRENA) published earlier this week revealed that solar PV is the largest employer within the renewables sector, with more than 2.5 million people working in the industry, and that renewables now employ 7.7 million people worldwide – an 18% increase in the space of one year.
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