In an exciting development, the Fertilidea team, spearheaded by the CEO of African Business Exchange Italy Mr. Silas odiero, arrived in Zambia on the 28th of January 2024 hot on the heels of a fruitful encounter with H.E The President Hakainde Hichilema of the Repubic of Zambia during his official visit to Rome. The anticipation surrounding their arrival is palpable, marking the beginning of a promising chapter in cross-continental collaboration.

Upon touchdown, the team was graciously welcomed by Mr. Albert Halwampa, the esteemed Director General of ZDA (Zambia Development Authority), along with his dedicated team. This pivotal moment captured in the photograph signifies not only the commencement of a new partnership but also the convergence of expertise and ambition.

Silas Odiero

In a landmark moment of diplomatic synergy and agricultural advancement, His Excellency Hakainde Hichilema, President of Zambia, embarked on a state visit to Italy on November 21, 2023. Among the numerous agendas fostering bilateral relations and exploring avenues for cooperation, one particular highlight stood out – the introduction of Fertilidea, an Italian organic fertilizer manufacturing company, to the Zambian market.

Captured in this photograph is a pivotal moment where President Hichilema, renowned for his visionary leadership and commitment to sustainable development, engages in discussions with representatives from Fertilidea. Against the backdrop of Rome’s timeless architecture, the scene epitomizes the convergence of diplomacy and innovation.

With Zambia’s agricultural sector poised for growth and Italy’s expertise in organic farming practices, the partnership between Fertilidea and Zambia holds immense promise. As President Hichilema and the Fertilidea team exchange ideas and explore opportunities, they pave the way for a future marked by mutual prosperity and environmental stewardship.

This photograph encapsulates not only a single moment in time but also the seeds of collaboration sown between nations, transcending boundaries and fostering a shared vision for a more sustainable future.

What was meant to be an ordinary seminar turned into a mission to enhance Kenya-Italian business relations with the vice chairman promising to take steps to cement the relationship by making a return trip to explore possibilities of establishing partnerships with various Italian businesses to take advantage of Italy’s unique SME model that has earned it a place as one of the world’s most industrialised nation. Italy is known to be the 2^nd most industrialised nation in Europe and 5^th in the world.

“ICPAK is keen to partner with Italy in areas of technological transfer and joint ventures that will enhance capacity building in Kenya” said Vice Chairman George Mokua in his opening statement as he welcomed  the speakers and other delegates at the beginning of the seminar.

The Kenyan Ambassador to Italy H.E. Jackline Yonga congratulated ICPAK members for the bold step and asked them to continue in the trend as Kenya was regarded highly as a business partner and that they needed to take advantage and enhance the value by forging relationships with Italian companies. She said that her office was open to receive and give all the necessary support to ICPAK  in its endeavour to heighten it’s accountability standards.

The speakers included CPA Antony Njiru, CFO, Royal Business School and CPA Michael ingutia, CFO, KCA University both from Kenya and Ms. Giusy Cannone, CEO, Fashion Technology Accelerator, Mr. Benjamin Radomski, CEO Business e Via Italy, Mr. Antonio Raimondi CEO, Genius Loci,  Mr Francesco Mangiameli, a corporate tax consultant with a private firm in Milan and Advocate  David Ottolengi  all from Italy.   CPA Michael Ingutia in highlighting the ‘take home’, said that it was clear that Italy and Kenya had every reason to partner for the betterment of the two economies and that Kenya had a strong SME base that could be a huge resource if it was structured using the Italian model and that this would be a great reason for seeking partnerships with Italy. He said the Italian technology remained to be archetypal and its commitment to R&D exemplary.

The ICPAK chairlady Rose Mwaura  was unable to join the delegates but sent a great speech that was read by Council Member  Risper Olique Gangla.  In  her speech she reiterated the need for ICPAK to stay focused in its role as an overseer . She thanked all the participants for their commitment to the institute and urged them to continue their support for the institution.

Also present at the event was the CEO of Small Enterprise Development Agency (SEDA), Ms. Mandisa Tshikwatamba who gave a detailed pres- entation on the intermediary role played by the Agency in supporting the small enterprises in or- der to assist in their development.

The Torino Fashion week which is currently in its third year after inception by its founder Mr. Clau- dio Azzolini, attracted fashion designers from all around the world with participants coming from as far as China , Middle East, East Asia and Africa and Europe. The event is expected to attract even more participants next year making it the single most diverse Fashion event in Italy so far.

The formation of this free trade area in Africa If ratified by all the 44 countries will become one of the world’s largest trading blocs and will create a single market of 1.2 billion people with a combined gross domestic product of more than $2 trillion. One of the key players who offered support to ensure the conceptualization of this continental agreement, United Nations Conference on Trade and Development (UNCTAD) states that cutting intra-African tariffs could bring $3.6 billion in welfare gains to the continent through a boost in production and cheaper goods. This lacked before when the continent had three separate trading bloc; Common Market for Eastern & Southern Africa (COMESA), Southern African Development Community (SADC) and, the East African Community (EAC).

However, key players and the continents largest economies, South Africa and Nigeria were missing raising concerns about the pact; the two represent $700 billion — or one-third — of the $2.1 trillion in gross domestic product across all the 55 African countries. They argued they were still conducting internal negotiations on some protocols in the pact.

This agreement is also part of the AU’s Agenda 2063, a long-term plan for continent-wide political, social and economic integration and development and critics argue the single trading bloc will not work where individual sub-regional ones have failed but will rather build on previous trade gains and will result in the whole being larger than the sum of its parts.

Key Benefits

The pact will benefit Africa in at least six mutually reinforcing ways. First, it will generate the momentum for the creation of similar arrangements for the 11 countries (including two leading economies, Nigeria and South Africa).  It is also a much larger market whose free flow of goods and services will help to maintain economic growth at over 7 percent per year. At this rate, the combined Gross Domestic Product (GDP) of Africa is projected to reach $29 trillion by 2050, which would be equal to the current combined GDP of the EU and the US. With additional policies, such growth will contribute significantly to spreading prosperity and reducing poverty.

Additionally, the treaty will serve as an impetus for investment in Africa’s cross-border infrastructure. It is estimated that Africa needs to invest nearly $100 billion annually in infrastructure over the next decade. Less than half of this target is met currently. Also, the prospects for the larger markets and supporting infrastructure will spur industrial development.

This will not only create jobs but it will also have the added advantage of diversifying Africa’s economies that are largely dependent on raw materials. The associated technological development will lead to the creation of new industries.

Also, the signal of larger markets will help to stimulate trade in services. The first beneficiary is likely to be the financial sector, which will be able to lend to larger industrialists seeking to benefit from economies of scale. Such financial services will reinforce the increase in cross-border investments by emerging African firms that are serving as regional champions of industrial development.

By being part of larger markets, small African countries will no longer be restricted to producing their traditional products. With better policies and human resources, they can become the locus of new manufacturing operations that serve wider markets and finally by providing a single economic space with harmonized trade policies and a regulatory framework, the AfCFTA solves the problem of multiple memberships, rationalizes trade negotiations, reduces the cost of doing business, supports industrialization, and stimulates cross-border infrastructure projects.

According to the country’s newly established ministry of Mining, Kenya’s mining industry is dominated mainly by production of non-metallic minerals such as soda-ash, fluorspar and some gemstones. Gold is produced in small scale in the western parts of the country. Nevertheless, there have been marked changes following the discovery of Titanium in the Northern parts of Kenya (Turkana). According to Monica Gichuhi of the Kenya Chamber of Mines, Kenya is emerging as a new and active player in the industry. “We have deposits of titanium and oil in Turkana making Kenya a place to invest in.” she said in a press interview.

In May 2016, the Kenyan Government introduced a new Mining Act to replace an outdated one and according to the mining cabinet secretary Mr. Dan Kazungu, the Act is aimed at making the sector more vibrant and attractive to investors as well as providing for more transparency and credibility. “Following the efforts of galvanising and reforming our legislative agenda to make Kenya a business-friendly country, we have been certified by the World Bank as the top country in Africa recognised for the ease of doing business” said Kazungu. Additionally, the country is also upgrading its infrastructure.

There are also other concerted efforts by stakeholder in the sector ensure growth and success, for instance, the Kenya Mining Forum brings together interested parties to showcase the country as an emerging destination for mining and according to the Forum, Kenya has been working on a 20-year mining plan that already highlighted a potential of USD 62.4 billion in mining revenues.

Other efforts include collaboration between the Kenya Chamber of Mines and the Association of Women in Extractives to work with the Ministry. “We are working at addressing some of the challenges within the Act and the Regulations that the industry is facing to ensure that Kenya offers a viable trading atmosphere and market” explains Alice Muthama, the Managing Director at Rockland Jewelers, one of the key stakeholders in the sector.

According to Alice, through the Association of Women in Extractives, the Kenya Gem and Jewelry Fair premiered this year is among the many efforts aimed at making Kenya a gem trading hub and matching up to its neighbors like Tanzania.

By Linda Ogwell-Teunissen

In the film, Mazrui shows how European colonialism destroyed Africa’s ability to make its own things- a trick he termed as Predatory capitalism.

He gives the example of the Balunda, the Baluba and the Basanga people of what is today the DR Congo, who used clay produced by termites to smelt copper from which they made all manner of farming implements, weaponry and even decorations.

However, the coming of Western imperialism through predatory capitalism and appropriation of resources killed local industries.

“…and then the Europeans came. Did they want to learn from the technology they found here? Oh no! At least the Baluba and the Balunda had consulted the technology of the termites and benefited from it. But European technology was more arrogant more self-confident and less compromising. It abolished the old technological order and in its wake it left new forms of desolation in Africa.”  Mazrui said.

As Africa is now too good to ignore, global economic giants such as China, United States, France and the United Kingdom scramble for its share.

Among the four, China is coming out strong just like the European technology.

A case in point is two months ago when Investors at the Nairobi Securities Exchange incurred a loss of Sh118.7 billion as a result of tension in global trade, sparked by looming trade war between the U.S. and China.

According to Kenyas Central Bank Weekly statistical bulletin,  all indices and market capitalization declined, slowing post dividend growth momentum when the bourse recorded an equity turnover growth of 46.82 percent. 

So how and why, are they doing it?

A story is told in the Financial Times of how China set its foot in Africa way back in the 15^th century when shipwrecked sailors from the fleet of Zheng landed in an island off the northern coast of Kenya Pate Island.

The Chinese explorers reached the east coast 500 years ago swapping Chinese treasures with African exotica such as Ivory Ostriches and Zebra’s.

The contact was later consolidated under Mao Zedong with anti-colonial solidarity and the construction of engineering works, notably the 1,860km Tanzam railway linking Zambia with the Tanzanian coast.

Fast forward to today, the Asian economic powerhouse is undertaking the China Belt and Road Initiative to connect Asia, Africa and Europe.

It is a state-backed project for global dominance aimed at connecting China to 65 other countries that account collectively for over 30 percent of global GDP, and  62 percent of the world population.

Monetary-wise, Chinas debt held by Africa stands stands at $143 billion up from $50 billion in 2006 atleast according to Kenyas Standard Media.

This is exclusive of the $60 billion China’s President Xi Jinping pledged to African governments during the recently held Forum on China-Africa Cooperation (FOCAC) summit in Beijing.

The pledge is to be given as $20 billion in new credit lines, $15 billion in foreign aid: grants, interest-free loans and concessional loans, $10 billion for a special fund for development financing and $5 billion for a special fund for financing imports from Africa.

Jinping also urged Chinese private companies to invest not less than $10 billion in Africa in the next three years.

According to data from the China Africa Research Initiative, China has disbursed loans to atleast 48 African countries. Angola is the top recipient of the Chinese loans, with $42.8 billion disbursed over 17 years.

Ethiopia follows in second position with $13.7 billion, Kenya is third at $9.8 billion.

The East African nation currently owes the Asian country $5.5 billion slightly below debt to World Bank that stands at  $5.8 billion.

The two lenders alone now account for about one fifth of Kenya’s total public debt load, which has already crossed the $50 billion mark.

In fourth and fifth position is the Republic of Congo and South Sudan owing the Chinese $7.42 and $6.49 billion respectively.

A majority of the lending is used for infrastructure development.

Sri Lanka Example

It is said that when a deal is too good, we should think twice.

This is exactly where Africa, once labelled a dark continent by the West is. Its sweet-sour position has seen some of its countries surrender its precious assets to repay the debts.

For instance, In December 2017, Sri Lanka formally handed over Hambantota Port to China on a 99-year lease after struggling to pay loans from the Chinese nation.

Reports by the New York Times, noted that Sri Lanka politicians said the Hambantota deal valued at $1.1 billion, was necessary to chip away the debt estimated to be more than $8 billion.

Word on the streets early last month was that China, famous for its iconic great wall would lake over Zambia’s National electricity supplier- ZESCO as a guarantee to its debt.

However the Edgar Lungu led Nation has since denied the rumors.

Even as China continues to play santa clause to desperate African Nations, the United states considered Africa’s largest donor is not becoming uncomfortable.

In August, US Senate raised concern about high infrastructure debt issued to developing countries by China under the Belt and Road Initiative. It termed Chinese funding as ‘predatory’.

A letter dated August 3, posted on Georgia senator David Perdue’s website, the senate raises concern about China’s debt trap diplomacy and negative effects of BRI to developing countries which latter turn to IMF for bailouts.

“We write to express our concern over bailout requests to the International Monetary Fund by countries who have accepted predatory Chinese infrastructure financing. The financial crisis illustrates dangers of China’s debt trap diplomacy to countries and security threats to US,’’ the letter said in part.

According to the letter, 23 out of 68 countries currently hosting BRI funded projects are at risk of debt distress while future BRI related financing in eight of those countries raises concerns about sovereign debt sustainability.

CARI reveals that the US disbursed $12 billion just to Sub-Saharan Africa in 2017, and $250 million to North Africa.

However Deborah Brautigam, CARI director says that “This could change under the Trump administration’s budget cuts.”

On the other hand, in her visit to Africa in August, UK Prime minister Theresa May pledged pledged $5.2 billion in support for African economies, to create jobs for young people.

In addition she pledged a shift  in aid spending to focus on long-term economic and security challenges rather than short-term poverty reduction.

Data from the United Nations Conference on Trade and Development shows that UK direct investment in Africa was $55.51 billion compared with $57.59 billion from the US.

As the scramble continues, the rest of the world can only watch if African Nations and its leaders will resist the easy to get Chinese loans or (just like T’challa in the fiction movie Black panther) it will rally its muscles and release full power of Black Panther to defeat its foes and secure the safety of its people.

The system uses technology to send money to another mobile subscriber via a text message otherwise known as short message service (SMS). It is run by Kenya’s leading telecommunications company SAFARICOM.

Though Kenya is the second country in the world to come up with such a system two years after Philippines’ Globe Telecom and Smart Communications were launched in 2005, it has risen, just under 10 years, to become a world leader on mobile money.

The system has sparked a mini-revolution in more than 20 countries in Africa and Europe with Romania being one of the places where the technology stands the best chance of gaining adoption.

According to a World Bank study, Kenya today, has more mobile phone subscriptions than adult citizens and more than 80 per cent of those with the mobile phone are subscribed to the M-PESA service.

A recently published study by US News on the long-run effects of mobile money on economic outcomes in Kenya provides some valuable insights that will benefit economic development and financial inclusion policies across Africa and world over. The study found that increased access to mobile money has reduced poverty in Kenya, particularly among female-headed households. Rapid expansion of mobile money has lifted an estimated 2 percent of Kenyan households (some 194,000 as at January 2017) out of extreme poverty. It has also enabled 185,000 women to move out of subsistence farming and into business or sales occupations.

Reaching off-grid

For Kenyans with no bank accounts, and in many other countries where mobile money has expanded, M-PESA has become far more than just a way of sending money. Routine purchases like airtime or utility bills are paid via mobile money. Retailers of all sizes accept M-Pesa merchant payments for groceries, cab fares, airline tickets or even school fees. Microfinance organizations are also able to offer lower interest rates due to saving on cash collection costs by receiving payments through mobile money.

Impact of M-PESA

M-PESA has significantly reduced transaction costs in Kenya. When it was launched the average distance to the nearest bank was 9.2 kilometres. Eight years later in 2015 the average distance to the nearest M-PESA agent was a mere 1.4 kilometres.

When M-PESA started it created a network of agents that were geographically dispersed which meant that more people in rural and sparsely populated areas were within reach of one. This resulted in significant and widespread adoption.

Now that mobile money users are able to form more diverse risk-sharing networks, it’s not surprising that users, compared with non-users, tend to receive more remittances from more people. This is particularly marked when users are responding to negative shocks.

Mobile money users are therefore more financially resilient and can protect themselves better against economic and other shocks. It also allows them to increase their consumption in bad times. This is key to enabling households to lift themselves out of extreme poverty.

The recent findings also show that in areas that have experienced large increases in access to mobile money people were more likely to be working in business or sales rather than in subsistence farming. Additionally, fewer people in these areas reported having secondary occupations.

Both these findings were seen to be particularly true for women. This was found to be true in female-headed households as well as male-headed households. An estimated 185,000 women have been induced to switch from subsistence farming to business or sales as their primary occupation as a result of mobile money access.

That mobile money has a positive impact on economic outcomes for women is particularly notable when seen against some historical studies on related subjects. For example, studies on the impact of micro-finance on female clients, and on the economic returns to capital grants for female-operated small businesses, have tended to show limited results.

This may reveal something crucial. For women, the route out of poverty may be financial inclusion that allows them to better manage their existing financial resources, rather than increasing their financial resources from credit or grants.

This finding has significant implications for policy and poverty-reduction efforts.

As other products built on mobile money platforms are developed, financial inclusion is deepened and users are empowered to improve the management of their financial resources. Other products allow users to, for example, earn interest on savings, access micro-loans and affordable insurance, and invest in government securities.

Mobile money has been transformational in Kenya, and has the potential to similarly benefit not only the sub-Saharan Africa but also the rest of the world.

Impact on the World

It’s becoming clear that mobile payment technology has staying power, however technologies like near-field communication, have been around for many years without gaining huge traction, so what has broken down the barrier to entry? What has changed making mobile payment a viable solution for everybody?

The smartphone, of course, is at the heart of this evolution. In this regard, personalized and real-time marketing and virtual wallets are not just the future of big business. They are already a viable proposition, and one that looks set to blossom in the near future.

But while mobile banking and payments may be getting more and more ingrained in consumers’ lives, as well as the business models of banks and vendors, monetizing mobile money is still proving to be a difficult task. In this segment, we consider three pillars of mobile money on smart phones: personalized, localized and timely mobile marketing; the rise of the digital wallet; and the various business models that are emerging that will influence where the mobile money market is heading.

Mobile marketing

For some, it may be an uncomfortable thought that every movement, purchase and communication they make on their mobile phone leaves behind a data trail that is being analysed by various industry participants, such as banks or specialist providers, to unlock new business potential.

Your searching and spending habits are viewable for all to see and this level of data transparency comes at a time when the card industry’s margins are under pressure, especially in the U.S., where market forces and incoming regulation have impacted interchange fees. This led banks to cut back on their loyalty schemes, as most card issuers used to fund these schemes from the card fees they charged. This does not mean that competition has scaled back, however.

What may be bad news for card issuers has created market opportunities for others. Vendors that can act as a gateway between the merchant and issuer, or who can aggregate and analyze transaction data to enable the merchant and bank to offer personalized, relevant and timely offers to card users, have been growing their business of late. Whichever model is used – the consumer will have to opt in to the service, meaning pushy marketing campaigns become irrelevant. This issue is also linked to regulation about information access and data management.

The development of mobile payments is primarily driven not by demand from potential clients, but by the search for reduced costs or increased revenue that it can offer the payment system operator. In this regard, it is not yet clear what the leading solutions or business models will be, but investments into the sector continue, and some business models are starting to emerge, such as special merchant deals.

In some cases, the mobile phone is turned into a payments terminal, the point of sale (POS). Examples include Square in the U.S. and iZettle in Europe. Typically, there are two models for this business proposition: the mobile phone as a POS where a merchant is typically swiping a card though a mobile device such as Square; and the mobile phone at a POS where the consumer uses their mobile device to pay.

It is hard to quantify a market that has potential but has not yet reached mass adoption. To take just one example, NFC technology has for some time been almost synonymous with mobile payments. It has also been around in Japan and South Korea for years. While these countries are ahead of the curve when it comes to NFC adoption, even in innovation and technology-driven Asia, NFC has not gained traction.

NFC adoption may seem to be making slow progress compared with the speed of other technology-related devices or systems, but when banks, network operators, today’s start-ups and others have worked out the business models that work for them, the future of mobile money will be clearer.

Tell us a bit about Ethiopian Airlines by giving us a short background

Ethiopian Airlines (EAL) is a flag carrier of Ethiopia. Ever since its establishment in 1945, EAL has become one of the continent’s leading carriers, unrivalled in Africa for efficiency and operational success, turning profits for almost all the years of its existence. Operating at the forefront of technology, it has also become one of Ethiopia’s major industry player and a veritable institution in Africa. It commands a lion’s share of the pan African network including the only daily East-West flight across the continent. Currently, EAL serves 95 international destinations and is fully owned by the government.

How much of Africa do you cover?

Ethiopian covers 55 points in Africa starting with its debut flight to Cairo with C-5 aircraft in 1946. Ever since, Ethiopian successfully introduced new aircraft technology and system to the African sky providing the first jet service with B767 to the continent. Ethiopian continues its unrivalled pace by introducing the technologically advanced B787 Dreamliner in 2012 being only second to Japan. The inclusion of the Airbus A350 and the latest B787-900 to its growing fleet demonstrates Ethiopian thirst for new generation aircrafts and its culture to remain at the forefront of African aviation.  It is the first to acquire the aircrafts in Africa maintaining its old age tradition of introducing new aircrafts to the continent. Currently Ethiopian operates 97 aircrafts with an average age of 5years which is remarkably below the industry average.

What is your experience with doing Business in Africa and what advice would you share with those looking to invest in the continent?

The African Aviation is not growing as much as its body mass. There are structural and policy problems in Africa like for instance the Yamassakouru Declaration that calls for the African Air to be open to all African carriers which is not yet implemented. This lack of enforcement has produced limited intra-African air connections. There are other infrastructure problems and fuel cost is also very expensive in Africa compared to the rest of the world.  In much of the sub-Saharan Africa the required infrastructures to support and lift the African economy are missing. The human resource lacks the required skills and competent professionals leading to bad governance and poor administration that hinder business in the continent.  However, the future looks bright as we have already started training our young professionals, building the roads, airports, power grids and IT backbone needed to boost the African economies. It is my hope that once this is completed we will see growth in imports, exports, and regional business which will make Africa strong economically and socially.

Any advice to Africans out in the Diaspora looking to go back home to invest and build the continents economy?

No doubt Africa is rising. Studies show that the African diaspora is increasingly viewed as a key to realizing the development potential for Africa. Though there are visible challenges, it is a high time that the diaspora plays its role in developing Africa. It is believed that there are a number of professionals in the aviation industry who can play a major role for the betterment of  their beloved continent’s aviation Industry. Therefore, the initiative has to be from both the diasporas and their Governments in participating to build a strong economy.

What are some of the things in your opinion that make Africa special?

In my opinion the factors that drive connectivity and make Africa special include the fact that Africa is versatile and continuously growing, its location positions it to have a good working relationship with other continents, the continent has plenty of unexploited natural resources as well as its immense youthful population.

There has been a lot of talk about Africa rising, what is your opinion, do you have specific examples?

Yes, it is rising. Africa has been a continent known for famine, war and dictatorship. There have been outbreaks of civil wars in the continent with far reaching consequences. There was displacement and famine which affected the majority of people. This has immensely reduced an many Africans are now leading a better life. Governments have started practicing democracy and good governance. This has brought much of investment both foreign and local. There is a great deal of focus on education, health care and other infrastructures which help build the economy. As a result, we have seen a decline in some of the deadly diseases like malaria and AIDS, an increase in the life expectancy of the population and a child mortality rates decline across Africa. We have also witnessed social justice inequalities being wiped out with just a mobile phone with which anyone in any part of rural Africa can transact in e-finance E-learning, E-commerce, Telle Medicine and Video Conferencing or other basic activities.

What is the future of doing business in Africa?

There is more hope than concern. Africa’s future is booming as it lays foundations to attract more investment. Africa has the youngest population size and a large body mass with unexploited resources. There is a huge investment opportunity for those who dare to invest in Africa. On top of this there is a good start in practicing democracy and good governance which leads to security and stability and create an environment for business investment and tourism.

What has been your highlight as a company in doing business in Africa?

It is all about the ease to do business in Africa. Though the opportunity is growing, the fact that non-African carriers manage more than half of the African sky is something that has got to do with lack of commitment from the African side to the Yamassakourou declaration. Despite these problems, Ethiopian Airline has managed to turn the problems into opportunities and recorded a continuous success story in the African Aviation industry.

What can be improved in terms of doing business in Africa?

As I said before more needs to be done on policy framework that is compatible with the global standard. The business regulations need to be the least cumbersome. In addition, African countries have to practice good Governance and build democratic culture.

What can Africa do to be better and as strong as other international blocks like the EU and the ASEAN?

In simple terms commitment to the one united Africa concept and pursuing policies as such is vital to become as strong as the other international blocks. In fact, in his famous speech at a meeting in Addis Ababa in May, 1963, Dr Kwame Nkrumah of Ghana emphasised the need to establish a strong Union of Africa States in order to secure stability in the continent to produce social justice and economic well-being. Though they couldn’t agree at the time on the formation of AU from OAU decades later it has become a reality and a very good start which I believe  may also lead in the future for a common currency like EU.

Any interesting upcoming products for the African Market?

In line with our growth strategy, we will inaugurate various new points in Africa, Europe and America in the year 2018. Nosy Be in Madagascar, Barcelona & Geneva in Europe, Orlando in the United States and Buenos Aires in Latin America are some of the new routes we are planning to add in to our extensive global network.

Particularly Ethiopian will launch Buenos Aires on the International Women’s day to commemorate and be part of the social justice movement that is celebrated every year globally on March 8. The inaugural flight will be an All Women Operated Flight in order to mark this important occasion and as part of our commitment of mainstreaming gender into our core business. We believe there is no better way to celebrate women’s economic, political and social achievement than this.

Compiled by Linda Ogwell-Teunissen

But where does this cherished product originate? West Africa collectively supplies two thirds of the world’s cocoa crop, with Ivory Coast leading production at 1.8 million tonnes as of 2017, and nearby Ghana, Nigeria, Cameroon and Togo producing additional 1.55 million tonnes.

Ivory Coast

The cocoa market is experience volatility at the moment that could pose a serious problem for the cocoa value chain. In October 2016 , the Ivory Coast government set a mandatory minimum farm gate price and with the global market offering less than the government asking price, buyers backed out and processing facilities shut down waiting for higher market prices. Exporters who secured rights to purchase cocoa in bulk also backed out. In addition, before the 2016/17 season, poor weather had reduced global cocoa supply. As expected, lower production in Ivory Coast and Ghana led to a spike in prices for the first half of 2016.

Cocoa farmers in Ivory Coast bet big on a continued slump following another weak harvest. Cocoa exporters bid on contracts before any real trends could be established in the October-March harvest season. These orders were used to set a minimum farm gate price by the Conseil Cafe Cacao (CCC), the regulatory body for cocoa and coffee in Ivory Coast. The price was set at 1,100 CFA francs per kilogram for the 2016-17 marketing year in October 2016, just as the harvest was set to begin.

Speculation on a market as opaque as cocoa includes inherent risks which may lead to big losses. The traders thought another poor harvest was just around the corner and bet prices would rise. Therefore, a combination of good weather and slumping cocoa demand could spell trouble for Ivory Coast. Increased rainfall began with the October-March harvest in West Africa, which was good news for farmers hoping for a better season.

Within the same period, there was also a lack of demand in Europe. The common measure for cocoa demand, grindings, stagnated. Possible causes for the downturn include worries over Brexit, a hot summer, and recent wellness trends. By the time farmers were ready to sell, the prices that wholesalers were willing to pay were already lower than Ivory Coast’s set farm gate price.

Exporters and producers could not purchase cocoa at the price set by the CCC if they wanted to make a profit. Trucks laden with cocoa sat at ports for months due to a lack of buyers. Of the purchases that were completed, several were rejected because of rotten beans. Ivory Coast’s miscalculation is a costly one for the country. Cocoa beans, paste, and butter account for 40.2 per cent of Ivory Coast’s exports by value. Ivory Coast had to review its 2017 budget because of the drop in sales. The West African country also asked for additional funds from the International Monetary Fund to cushion it going forward.

However, prices have inched back up in recent weeks, indicating that the worst of the crisis may be over. The fact that so much chaos could come from an ostensibly positive event suggests that there are structural problems in the Ivory Coast cocoa sector that need to be addressed. A regulatory system that better protects cocoa farmers during times of crisis would also reduce the risk of meltdown in market mechanisms.

GHANA

Ghana is the world’s second largest cocoa producer with an annual production of 750, 000 to a million tones putting its total share in the global market at 20%.  In the past decade, the chocolate industry’s demand for the product has gone up 12 per cent but production has stagnated.

While the demand, especially from developed economies like India and China is a positive sign for the Industry, the more than 6 million cocoa producers, most of whom are small-scale farmers, face a myriad of challenges ranging from poverty, poor connection to infrastructure from producers to consumers.

But the Ghana Cocoa Board (COCOBOD) established in 1947 has had a history of overseeing the sector, ensuring that it remains on track despite the challenges. The board serves as the only exclusive marketing intermediary between producers and processors of the crop.

The marketing year for cocoa begins in October, when harvest of the main crop begins, followed by the harvest of a smaller “light crop” in July. Light-crop beans are smaller than the main-crop variety, but are identical in quality and grown on the same trees. The main crop accounts for 90 per cent of total annual cocoa bean production in the country, and the light crop accounts for the remaining 10 per cent.

During the 2015/2016 harvesting season the country produced approximately 800,000 metric tones , which was 20 per cent of the total world harvest.

Until a couple of years ago, cocoa generated around a third of Ghana’s export earnings. This share decreased due to the start of oil production. In 2014, cocoa was the third largest export product with a share of 20 per cent. It is estimated that during the 2016/17 a total output of 850,000 will be produced.

Collective cocoa bean purchases by the Ghana Cocoa Board in the 2015/2016 season reached 778,000 tones, representing an increase of around 38,000 tones compared to the previous season. Although production fell short of the Government’s estimated target, it exceeded the low level of the previous season.

For the 2016/2017 season, the Government announced an increase of the guaranteed price paid to cocoa farmers to GH¢7,600 per ton (US$1,914). As at 22^nd October 2016, cocoa purchases in Ghana, as reported by News Agencies, reached approximately 200,000 tones.

Cocoa production in Ghana remains a major contributor to the tax income of the government. There are approximately 800,000 cocoa farmers in Ghana. Cocoa is grown on an estimated 1.9 million hectares. The cocoa industry employs about 60 per cent of the total labor force of the agriculture sector; most cocoa farmers are smallholders who harvest cocoa on 2 to 3 hectares with a yield of on average 400 kg/ha. Including families of farmers, employees of trading companies and input services, the cocoa sector provides income for more than 1 million Ghanaians.

The cocoa sector is one of Ghana’s economic backbones. Ghana is not only the second largest producer of cocoa in the world, but it produces the world’s highest quality cocoa. The cash crop accounts for about 9% of Ghana’s GDP and makes up about one-third of the country’s export revenues, totaling over US$ 1.5 billion.

Additionally, cocoa is an important tool to guarantee the liquidity of the Ghanaian government. Every year, the government issues a bond, which is secured by the predicted income from selling the cocoa of the next harvest. Potential investors know that due to the forward cocoa selling system the bond is a low risk investment. The Ghanaian government pays for the bond at much lower interest rates than it would have to pay for a bank loan.

Which trends offer opportunities on the European cocoa market?

The popularity of chocolate is growing. This results in a stronger demand for high-quality, fine flavor cocoa in Europe. While Ivory Coast and Ghana remain the largest suppliers of cocoa to Europe, their share is decreasing.

Latin American suppliers are increasing their market share, as sustainability is increasingly important on the European chocolate market. Consumers want to know more about the context of cocoa production, and the impact of their purchases.

In Europe, growing demand for chocolate is in traditional consuming countries such as Belgium, France, Germany, Italy, Switzerland and the United Kingdom. Consumption in this segment is associated with higher incomes but also with consumer awareness and market exposure.

This trend is especially driven by a small group of educated, loyal and casual consumers (for example, seasonal shoppers during festivities such as Easter and Christmas)