Category: Finance

Foreign investment on the cards for Nigeria – Nigeria

New Hope Liuhe Company Limited (NHLCL), an agribusiness company from China, has expressed its desire to invest in the sector’s development in Nigeria.
Dang ZhiMin, vice president at NHLCL, led the company delegation to Nigerian Investment Promotion Commission (NIPC) at the Commission’s headquarters in Abuja. ZhiMin made assurances to invest in various sectors like manufacturing, processing and selling of animal feed, raw material additives, dairy products and more. He said that the company’s investment in its selected areas of interest would also help the local economy and provide employment.
The Chinese delegation was accompanied by a representative from the Bill and Melinda Gates Foundation.
Zhao Xin, general manager of investment and development at NHLCL, said that the company, in collaboration with the foundation, is ready to invest in Nigeria. Describing the country as one of the
biggest markets in the continent, he asked the government to support their plans.
The executive secretary of NIPC, Uju Hassan-Baba assured the potential investors of government assistance and an investment environment conducive to their investment, saying, “Those who are investing in the agricultural sector in Nigeria, especially a company like yours, is assured of abundant resources and huge fortunes.”
Hassan-Baba said that encouragement, promotion and coordination of investments in Nigeria were part of the commission’s mandate.
She told the delegation members that Nigeria offered a ready-made market for products, with more than 170mn consumers in the country and also served as a gateway to other markets in West Africa.

Decreasing local currency pushes up food prices

Depreciating local currency and rising food prices have pushed up the annual headline inflation rate in May to 5.3%, up from the previous month’s 4.5%, the National Bureau of Statistics (NBS) announced in Dar es Salaam yesterday.
According to the statistics body, the overall index went up to 157.86 in May,2015 from 149.89 recorded in May, 2014. The bureau attributed the inflation rise to high food prices, citing some of the food items that had their prices soaring as cassava flour by 12.3 pc, meat by six pc, fish by 11.7pc, cowpea by 13.9 pc and beans by 4.2 pc, while restaurant food prices soared by 4.1 pc.
Addressing reporters, NBS director of population census and social statistics Ephraim Kwesigabo said on the other hand that some of the non-food items that contributed to the increase of by 3.5pc, gents wear by 5.6pc and accommodation services by 4.2pc.
He furthermore said food and non-alcoholic beverages inflation rate for the month of May, this year, has
increased to 8.5pc from 7.1 recorded in April, this year.

Market insights on Ethiopia

A survey by Nielsen Marketing Insights has indicated great growth and increasing urbanisation amongst Ethiopians. Says the report: “The streets of Addis Ababa are bustling with the delicious smells of cooking breakfast, and the sounds of people.
As the centre of commerce and social interaction, the street is where much of life takes place. Only about 50% of those surveyed currently hold bank accounts, although most of the citizens are hopeful that with expanding globalization, more people will acquire bank accounts.”
Ethiopia follows Nigeria as the second most populous nation in Africa, with 83 million people, two major ethnic groups (Oromo and Amhara) that account for close to 60% of the population. The population growth rate is 2% annually. Although the majority of the population is rural, the World Bank:
Africa Development Indicators report has indicated that the urban population is growing twice as fast as the rural.
Young, university educated and relatively wealthy people in Ethiopia, account for roughly one-sixth of
respondents surveyed (17%) but control 28% of the income. Among those surveyed:
• The monthly household income is 4400 ETB (approx. R2560)
• There is a colour television in almost eight of 10 houses, but only one in three own a refrigerator
• 50% of the heads of households are employed in unskilled or semiskilled work
Consumer segments
Three major consumer segments account for close to 60% of Ethiopian survey respondents: Trendy aspirants, evolving juniors and balanced seniors:
• Trendy Aspirants.
15-29 years, single, largely male, middle SEC, urban
Affluent and willing to pay more for quality, they represent 17% of those surveyed and offer a very good
opportunity for launching or growing brands. Educated up to secondary school and above. Modern in terms of fashion, technology, and willingness to try new products.
• Evolving juniors
15-19 years, middle to lower SEC, peri–urban
Account for 25% of those surveyed and are predominantly students in peri–urban areas. This group likes spending time with friends.
Affordability and availability is the best way to reach them. They are also social and want to enjoy time with friends.
Traditional and family-oriented. Value affordability. Average consumption of TV, radio and mobiles.
• Balanced seniors
20-45 years, married with children, across all SEC16% of the surveyed are traditional,family–oriented and religious. They value affordability and are open to recommendation. Studied secondary school and above.
• Wannabe Bachelors
20-34 years, male, middle to low SEC, single, peri–urban.
They account for 13% of those surveyed. Educated up to secondary school. Mix of blue collar and supervisor level jobs. Influenced by good packaging and advertising.
• Struggling Traditional
30-45 years, married with children,lower SEC, peri-urban
They account for 12% of the population. Low levels of education – secondary school and below. Rooted
in family, traditions and religion. Prime concerns are affordability and availability. Not brand conscious.
• Progressive Affluent
30-45 years, married with children, higher SEC, urban
Well educated, and employed in managerial jobs. Willing to try new things and pay for quality. Family is
important but also tends to be very individualistic. High on media use.
• Buy
Consumers tend to shop at open markets and kiosks more often than other channels; supermarkets are popular with trendy aspirants and progressive affluents. In addition to the unorganized retail landscape,
companies will have to navigate government–imposed price controls, which were a top concern among retailers interviewed in the study.
Food and grocery account for almost 40% of monthly spending. Consumers tend to be habitual in the brands they buy and affordability is the largest purchase driver. Trendy aspirants and progressive effluents are more likely to try new products. Category penetration is much lower in Ethiopia compared other countries surveyed, providing an opportunity to introduce consumers to new categories, especially energy
drinks, where interest to try is very high.
• Watch
Among those surveyed, TV and radio are the most popular media (92% and 80% penetration, respectively). Dramas, sports and news are top programming content across both platforms.
Ethiopian Television (ETV) is popular across all cities in Ethiopia, while radio is more regional in nature with each city having its own set of popular stations.
Print media and Internet are not prevalent, which may be explained by the low literacy rate (30%). Nearly
all progressive effluents read print and surf the internet, while trendy aspirants are also much more likely to utilize these media than the rest of consumers. And while over 70% of those surveyed own a cell phone, it is typically used only for basic services,like text messaging.
• Opportunity
In recent years, Ethiopia has emerged as one of the fastest growing economies in Africa with 10% percent GDP growth in 2015.
When launching new products in Ethiopia, it is advised that companies spend time understanding not only
trendy aspirants, but also the culture, people and traditions of all groups in Ethiopia. A media campaign that focuses on national TV will achieve critical exposure. Compared to other countries surveyed, CPG category penetration and consumer incomes are lower in Ethiopia. Low–cost products will help meet budget needs and introduce consumers to newer categories. Most importantly, demonstrate clear value to all citizens—those with money and those without—to attract and keep potential customers.
Emerging Market Insights Survey

Starbucks funding for Tanzanian dairy project

The Starbucks Foundation has awarded US$750,000 to a Tanzanian project to provide cows to coffee farmers. Part-funded by Irish Aid and implemented by the Heifer International in collaboration with the International Livestock Research Institute (ILRI), the aim of the Maziwa Zaidi project is to help coffee farmers to diversify their income and provide better nutrition for their families. The funding will be used to provide 5,000 smallholder farmers in the Tanga and Morogoro regions with dairy heifers and bulls, allowing them to produce milk and breed more cattle. Heifer International said the farmers will also receive training in dairy management and cattle husbandry, while a milk collection centre will also be developed to give larger dairy processors easy access to farmers’ milk. Says Pierre Ferrari, Heifer International’s president and chief executive: “By introducing higher and steadier income levels from dairy, coffee farmers will actually have increased capital to invest in physical inputs and new technology to increase coffee production.” The project is also expected to improve access to water and sanitation as well as increasing use of alternative sources of renewable energy. –

Need a wise expert/director?

The Institute for Independent Business (IIB), an international organisation of mature executives, is no normal management consultancy.
Associates of IIB are generally more like non-executive directors who stay for some length of time with a company (unless it is a stand-alone project).

Dutch help to medium sized companies

Many small firms have benefited from an almost free advisory service offered by the Netherlands Management Co-operation Programme (NMCP), which is largely financed by the Dutch government.
Retired Dutch experts in various fields are sent to financially-constrained African, Asian and Middle Eastern companies for periods of up to three months.

Aid and the private sector

The second edition of a comprehensive guide into the complex, interwoven world of aid agencies has been produced by two South African organisations, Africa Project Access and ABSA Bank. The Brief Guide to Aid Agencies details over 80 agencies.
Since budgets allocated to many aid agencies and concessionary finance institutions are not fully

Low interest loans for US equipment

The Import Export Bank of the United States Government (Exim-Bank) offers an attractive loan programme for companies in foreign countries who are purchasing US manufactured equipment or machinery from an US exporter.
The Exim-Bank will guarantee the loan of a qualifying foreign client to a major US commercial bank who will provide funding a

Accessing US technology

Businesses in 12 African countries are currently benefiting from a new programme aimed at assisting them to access US technology.
Known as GTN (Global Technology Network), the programme is operational in Botswana, Cote d’Ivoire, Ghana, Kenya, Namibia, Rwanda, Senegal, South Africa, Tanzania, Uganda, Zambia and Zimbabwe.
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