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NEWSLETTER
Volume 2 / Issue May 2014

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DATE: FRIDAY 23 May 2014

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Focus on Zambia


Emerging markets are defined as all countries except for the US, Canada, Japan, Australia, New-Zealand and Europe. Africa is by far the most sought after in all emerging markets. Kenya, Malawi, Nigeria, Rwanda, Tanzania, Ghana, Mozambique and Zambia are among the countries benefiting economically by making the biggest economic advances overall. The International Monetary Fund (IMF) expects the economies of sub Saharan Africa to grow by at least 5.4 percent every year for the foreseeable future. The World Bank reports that of the ten fastest growing global economies, seven are in sub Saharan Africa. Consultancy firm Ernest & Young estimates growth in African markets at $3 billion in the next two decades, with almost all the growth coming from sub Saharan Markets. Zambia will continue to be a rising star in sub-Saharan Africa on the back of a growing middle class with an increased appetite for spending and an increase in demand for goods and services.


Given the strong economic growth projections by the IMF and the World Bank, Zambia is one of the strongest and highest performing emerging economies and is increasingly becoming home to many international companies who are playing an active role in a wide variety of sectors including, Agriculture, Oil & Gas, Mining, Infrastructure, ICT and Manufacturing to name a few. Examples of these companies operating in Zambia are Standard Bank, Illovo, SABMiller, Shoprite, Group Five, MTN Group, Sun International, PwC, KPMG, Delliotte, Nampak, Massmart, Pick n Pay Stores, Tsogo Sun Holdings, Pioneer Foods and African Rainbow Chicken.

SECTOR FOCUS: THE AGRI-BUSINESS INDUSTRY

Agriculture production is one of the most important economic sectors in Zambia. Zambia’s agriculture sector accounts for 35% of the nation’s GDP, which equates to around $4.5 billion. About 75 percent of Zambians rely on agriculture for their livelihood. Recently, the Government of the Republic of Zambia recorded a bumper Maize harvest of 3,350,671 tons in the 2013/2014, a 20% improvement from the prior season and biggest volume of grain on record. Zambia’s Agriculture & Livestock Minister attributed the good output to an increase in yields and land under harvest. The increase in harvest has positive spin offs such as export opportunities into other countries in the region such as the Democratic Republic of Congo, Kenya, Malawi and Zimbabwe.

The agriculture sector is one of the key essential growth frontiers and if Zambia can continue to directly invest in developing its agricultural value chains, this can have a positive stimulus into the economy. Increasing investment in small scale and commercial farming can create a profitable and competitive agribusiness sector. Ways to stimulate continued growth in the sector include scaling up productivity, tapping water resources for irrigation, providing stable prices, sowing seeds with better yields, improving basic transport infrastructure and providing incentives for financial institutions to invest in agriculture.

Public private investment models and partnerships are key catalysts to facilitate capacity building in the finance of agribusiness. Both the private and public sectors direct and indirect investment in supporting small scale farmers together with a continued development of emerging and commercial farms is the key contributor to the growth of the agricultural sector. Some of the top 10 South African companies investing into Africa’s food and agricultural industry in the sector are Nestle, Coca-Cola, Shoprite, SABMiller, PicknPay, Savola, Olam International, CFAO Group, Lonrho Agriculture and Uchumi Supermarkets.

Another strategy is to encourage and boost capacity building through technical and entrepreneurial skills training. For example, Zambia’s producers of fresh fruit and vegetables can move into high value added exports as a result of effective collaboration between the public and private sector and the strengthening of links between businesses, educational institutions and government. The real potential of Zambia, its people and its business, lies mainly in investing in entrepreneurs, Small and Medium Sized Enterprises (SME’s) and the innovative use of local knowledge and expertise and a global vision.

The role of women in the agriculture sector cannot be overlooked. Women are an important contributor to the growth story in the Agricultural sector. According to the United Nations Food and Agriculture Agency Organization, women in Africa are responsible for 70% of crop production. The focus should be to create more access to more formal economic participation in the sector.

Agribusiness models and value chains hold an essential key to meeting urban consumers demand for food, particularly processed food. There is a vast potential for establishing production and trade links and creating synergies between different role players across the entire agribusiness value chain (producers, processors and exporters). The investor’s appetite for Zambia’s rich agricultural resources is evident from the increase in visitors to the country. This appetite provides the platform and opportunity for sustainable solutions to sustain economic achievements and advances.

AUTHOR
Mishinga Seyuba Kombo is an Emerging Markets Advisor and Executive Director of SK Associates™, a legal consulting firm based in Cape Town. Mishinga provides corporate consultancy services to a wide range of clients operating in various sectors. Mishinga is also an entrepreneur and manages and owns various businesses in different sectors. She is involved in facilitating join venture investments that primarily drive and promote social and economic prosperity in sub-Saharan Africa. The opinion and views expressed in this article are personal. Please e-mail the writer at capetown@skassociates.co.za for any comments and/or suggestions.

NEWSLETTER

Volume 1 / Issue March 2014

SK Associates, your cross border legal specialists in business risk and corporate compliance in Sub-Saharan Africa.

It is with great pleasure that we are able to bring you the second issue of our monthly Newsletter. Our practice focuses on promoting meaningful partnerships in and within Sub-Saharan Africa. We believe that our monthly newsletter will enable us to keep you abreast of topical issues surrounding business, trade and education opportunities in Africa. Our aim is to continue to connect and promote partnerships that create a meaningful difference in Africa.

Invitation to our launch on 19 March 2014.

Please RSVP as soon as possible if you haven’t done so.

Please bring a couple of business cards for distribution and a business card for the lucky draw.

Meet our team

Thuliswa more commonly knows as ‘Thuli‘ is our Cape Town office secretary and manager, with over four years of combined client services and front line office management experience. Thuli has previously worked at Vodacom, Musica, Cell C and most recently took the decision to study full time. Thuli will commence her Office Management and Technology Degree at UNISA. If you would like to contact her, please e-mail her at thuli@skassociates.co.za

Tel: +27 21 671 4425

Mwelwa is our Office Bookkeeper. She is currently responsible for budgeting and vouchering, cash management and credit control and reports to the Account Executive at SK Associates. Prior to joining the SK Associates Team, Mwelwa worked for Barclays Plc, Konkola Copper Mines Hospital and Techserve, a debt collecting company. Mwelwa is currently in her third level of completing her Chartered Global Management Accountant qualification. If you would like to contact her, please e-mail her at mwelwa@skassociates.co.za

Tel: +27 21 671 4425

Hailing all the way from Hamilton, Ontario, Canada is Vincent, our energetic IT Consultant. Vince has been in the IT industry for more than 10 years and is not only passionate about technology, but also passionate about music and the arts – he even took some time away from IT to study music, and traveled the world working on cruise ships.Now based in Cape Town, Vince is eager to re-start his career in IT. If you would like to contact Vince, you can e-mail him at vince.waters@gmail.com, Tel +27 79 593 1067

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