February 2016
2016
Dr. Harnet Bokrezion
www.africajumpstart.com
Africa Business Intelligence Know The Latest Each Month - Be Ahead Of The Game in 2016
Issue 21
February 2016
This is Africa Business Intelligence ! Hi there, Thanks for downloading Africa Business Intelligence, which I will send you free of charge each month covering the latest market opportunities of the previous month and showing you what they mean for your business. The Internet has now become a reliable source for business and industry news on Africa, but much of it are news reports on large-scale investments or projects making it difficult to apply the information to your own venture. When I started to build my Africa business it was hard to get information that was relevant to start or grow my own business. I decided to fill that gap. As you may have read on my website, my main objective building Africa Business Jumpstart is to assist and guide those who want to start businesses or invest in Africa, and part of that is how to minimize obstacles and identify upward trending opportunities. In my view some of the obstacles many of us face doing business in Africa is a lack of perspective, relevant information, guidance, and time! So here you get insights into rare opportunities, neatly packaged! My monthly Africa Business Intelligence will provide you with a compact overview of the latest market developments that happened over the last few weeks in Africa and that are relevant to entrepreneurs and investors. You are then in a position to turn information into knowledge that has significance in your decision making processes. Reading these intelligence summaries on a monthly basis will also enable you to get a better understanding of the dynamics on the ground in a way that is relevant to your own undertakings, so you can make informed decisions faster and more confidently. Here is Africa Business Intelligence February 2016 issue summarizing key insights of the last month. I hope you will find it useful! Buy my book: “101 Ways to Make Money in Africa” – the most comprehensive book on African business ideas and concepts that actually work and market insights on over 300 pages. More details on www.africa101book.com Register for my Africa Business Bootcamp in the UK & USA. Bootcamp for LONDON UK closing soon!
February 2016
Want to open a logistics business in Africa? South Africa, Nigeria, and Kenya now ranked top 3 for investment and business opportunities in the area of logistics.
The industry opportunities across 'logistics' in Africa are huge, so much so, that Africa's three largest and most developed economies are still an open field for massive business success in this regard.
Global logistics executives have ranked
Kenya among the top promising
investment markets in Africa, after South
Africa and Nigeria.
A report titled Agility Emerging Markets
Logistics Index 2016 says a fast-growing
middle class and the demand for mineral
resources are important growth drivers in
the country.
Others are new oil and gas finds, rapid
infrastructure development, stronger
agricultural demand and increased foreign
direct investments.
While South Africa leads with 26 per
cent, Nigeria ranks second with 17.5 per
cent and Kenya follows with 15 per cent.
BUSINESS OPPORTUNITIES
"The market is open for first movers who
can navigate risk and nurture African
talent. The opportunity is for those seeking
to build long-term, sustainable businesses
that bring world-class practices and adapt
to local conditions," said Mr Geoffrey
White, the CEO of Agility Africa.
However, a majority of logistics firms are
still wary of entering the promising
markets.
More than 1,000 executives interviewed
said poor infrastructure, lack of power
generation and corruption are high risks in
the growing economies.
Relevance for you business:
The production and transport of goods in Africa is increasing and the logistic sector can hardly keep up. The timing is perfect for you now, especially if you are planning to start with a small venture, as a first mover advantage and hence little competition will allow you to grow faster. But instead of just 'buying trucks' think of a unique logistics service that you could offer in your target market.
February 2016
Investments in African tech increases considerably - new hotspots are Egypt, Ghana, and Tanzania! Maybe it is time for you to invest into African tech start-ups?
Tech start-ups are fast becoming a top choice for investors in Africa, especially Angel investors and VC. It's a trend that should get your attention if you are interested in investing in Africa.
25 African tech startups received a total
amount of funding in excess of $185.7
million (Sh19B) in 2015, according to a
report compiled by Disrupt Africa.
South Africa, Nigeria, and Kenya proved
investors' favoured destinations in 2015;
with 36 per cent of the startups that raised
funding based in South Africa, 24 per cent
in Nigeria, and Kenya in third place with
14.4 per cent of deals.
The top three highest amounts of funding
also went to these three locations. South
African startups raised in excess of
US$54,568,000 (Sh5.7B)
throughout the year; Nigerian startups
received over US$49,404,000 (Sh5.1B);
and Kenyan startups brought home over
US$47,365,000 (Sh4.9B).
Kenya's solar power start-up M-Kopa
accounted for over 90 percent of financing
that flowed towards Kenyan start-ups last
year. Other startups that secured
significant financing include BRCK (which
announced additional funding last week),
Kopo Kopo, Angaza, BitPesa and Asoko
Insight.
Of the 10 sectors monitored in the report,
the solar sector saw the most investor
activity, accounting for 32.9 per cent of
total funds raised. The fintech sector
proved a close second, securing 29.6 per
cent of the total funds.
"2015 was an exciting year for African
tech startups. Our data shows the
increasing vibrancy of our ecosystem, with
more quality tech startups, and more
investor activity than ever before," said
Gabriella Mulligan, co-founder of Disrupt
Africa.
"These are impressive numbers, showing
real growth in the amount of funding
available to African tech startups, but in
reality, they are merely the tip of the
iceberg," said Tom Jackson, co-founder of
Disrupt Africa. We expect to see further
growth in 2016."
The report also finds Egypt, Ghana, and
Tanzania are key hotspots for funding
activity; and provides detailed information
for each country, including deals per
location, average deal sizes and
highlights key deals.
[Source: allafrica.com]
February 2016
Relevance for you business:
If you are looking to invest it is helpful to look at growing trends among Africa investors who have already put their money into action. And here we go: The tech and ICT industries in Africa are becoming increasingly popular. Many tech ventures have reaped incredible returns on investment in a relatively short period of time making them an attractive choice.
Trending now across Africa:
Investor groups, platforms,
and services for local investors
are growing. Build a business
around that!
When we think of investors, we usually think of non-Africans and those in the Diaspora. But there is an increasing trend at various levels towards mobilizing, educating, connecting, and organizing local investors within Africa. This creates a new context for related business avenues you can build and pursue in this regard.
The Businesswoman Association in
eastern Moxico province aims to develop
the agriculture sector, so as to contribute
to food production and nutrition of families.
Speaking to Angop about the activities
carried out by the mentioned association,
Alice Muacu, an official member, justified
that the investment in the manufacturing
sector is due to "huge shortage of natural
food" and the upward trend in the
consumption of imported products.
She reported that as soon as they have
financed the agricultural projects in the
pipeline, the association may begin the
cultivation of rice, cassava, maize and
other products of the field, through the
cooperatives created in the province.
Alice Muacu appealed for greater unity of
the association, promoting the exchange
of ideas aimed at strengthening the
structures and meet the appeal of the
Executive, of counting on all forces of the
nation for social and economic
development of Angola. [Source: Breaking News
Hub]
Relevance for you business:
We can witness growing local investor communities and related activities on the continent. This has also been highlighted during Africa investment conferences. So far focus has been given to foreign or Diaspora investors, and this new trend opens new possibilities for engagement and related at your end: you can build online and offline investment platforms and groups, organize related events locally and internationally, improve deal flow, manage new investment funds or projects, or develop relevant services - advisory, legal, or PR for example.
February 2016
Produce honey: The demand is increasing both within Africa and globally
Honey production in Africa is probably most advanced in Ethiopia with a long standing culture in this regard. But Uganda has managed to decrease honey imports from 60% to 15% in six years, which is an incredible example regarding the potential that commercial honey production holds for you.
Farmers dealing in honey are advised to
form large groups that can help them
access cheaper finance to boost
production and also strengthen their
collective bargaining power in order to
reap the full benefits from the current
increase in the prices of honey.
The prices for honey have doubled in the
last one year, buoyed by an increase in
demand from consumers, who now have
more platforms, such as supermarkets, to
access the products. Dickson
Biryomumaisho, the executive director of
Tunado, an organisation responsible for
the development of the apiculture industry
in Uganda, said:
"We encourage farmers to form farmer
groups, especially women and youths
because that is where our focus is.
Although some farmers seem to be caught
unawares by the rise in the price [of
honey], others are coping very well." He
was speaking to The Observer about the
prospects of honey in the country.
Jackson Jurua, the chairman of Tunado,
told The Observer that "The prices of
honey and other bees products like
beeswax and propolis have almost
doubled, and the demand is also following
a positive trend." He was speaking at their
offices in Wandegeya.
He noted that in 2014 a kilogram of honey sold at Shs 5,000 as farm gate price. Today, a kilo going for between Shs 10,000 and Shs 15,000. Production of honey has also gone up to 12,500 tonnes in 2014/2015, from 5,000 tonnes in 2005/6.
With the growth in production, imported honey in the country has dropped.
Jurua said: "In 2004, we had more than 60 per cent imports until 2008 when the situation started changing. Now, figures show that only 15 per cent of honey on the Ugandan market is imported while 85 per cent is locally produced. We need to make sure that our processors also enter the high-end market but [meeting] high standards are a requirement for this."
[Source: allafrica.com]
February 2016
Relevance for your business:
Honey production is a great business if you are interested in working with local communities, disadvantaged populations segments such as women or youth, and you care about environmental protection.
The success for you lies in bulk production (or collection), quality control, packaging, and branding. Work on creating local producer cooperatives that are able to produce enough for both the local markets and exports, train them, and create a competitive product of high quality. Extra tip: Commercial wax production is also a lucrative business. It usually earns you more than honey and is an ingredient used in a range of fast moving consumer products high in demand.
How a weed is becoming an
export commodity - be among
the first to recognise the
opportunity!
'Cassia tora' is a plant that can be found in several African countries where it grows as a wild weed. Its leafs and seeds are palatable and can be used for teas and soups, but the plant has also skin health benefits. It seems like we found another contender for the global alternative health & healthy eating market.
Cassia tora or Senna tora, also known as
'Tafasa' in Hausa language, is gradually
evolving from a mere weed in bushes and
farmlands, to an export commodity in the
North, particularly in Katsina State, Daily
Trust has learned.
Though it is not being cultivated in farms
but its seed has vast soil reserves that can
remain viable for up to 20 years and can
produce up to 1,000 emerged plants per
square metre.
One of its merchants, who frequents
Katsina State markets from Zamfara
State, Alhaji Yunusa Abdullahi Tsafe, said
they opted for the business of cassia tora
due to the scarcity of Moringa leaves and
its high cost.
"Initially, we were into moringa leaves,
which we were sourcing from Kafur,
Malumfashi and other parts of Katsina
State. We then dry them for onward
transportation to Illela market, Sokoto and
Niger Republic. Scarcity of moringa,
especially in dry season, made us switch
over to cassia tora and it is gradually
gaining wider acceptance both here in
Nigeria and Niger Republic," said Alhaji
Yunusa.
February 2016
He added that children gather and dry the
leaves for them to buy at N400 per bag.
They later transport the commodity to Illela
market in Sokoto or Tasawa in Niger
republic, where a bag costs between N800
and N1,000.
Alhaji Yunusa Tsafe further explained that
tora leaves are mainly used as condiment
in vegetable soup (Taushe) while some
eat it served with groundnut cake.
An elderly woman, Malama Hauwa
Yankara, said that dried tafasa leaves can
be pounded and sieved like baobab
leaves and used in making soup.
"When pounding it, a little quantity of
butter should be added to make the
powder soft and tasty in the soup," she
said.
Alhaji Kasimu Abdullahi (Cuwa-Cuwa) is a
merchant who trades in both cassia tora
and moringa leaves and he said with the
escalating price of moringa to N16,000 per
bag, many of the consumers are resorting
to the use of cassia tora as a substitute,
because its price ranges from N800 to
N1,200.
"Most of the consumers are only using
cassia tora as a substitute of moringa
which is becoming more expensive daily
due to its high demand. Those that cannot
afford a bag of moringa at N16,000 are
going for cassia tora which is only N800 to
N1,200 per bag," Alhaji Kasimu said.
He further said cassia tora also has both
nutritional and medicinal values as it has
been used for treating skin diseases such
as ringworm, itching and psoriasis as well
as snakebite.
Relevance for your business:
The global market for alternative medicine and healthy eating is still growing fast as a multi-billion Dollar industry in the West and new exotic products are gaining momentum and increased
popularity. There may be an opportunity to build collectors in rural communities and the weed could be processed, branded, and exported by you.
Housing & construction business and investments: Major obstacles may come your way in certain markets - be aware of them before you start building your business!
The housing and construction industry is one of major opportunity across the continent. However, being unaware of some of the red tape or challenges in certain markets may cost you a lot of frustration and money.
According to the National Housing Corporation estimates released last year, Kenya has an annual housing deficit of
February 2016
300,000 units. To ease the problem, 150,000 new units are needed per year.
However, the construction of new houses
is almost stagnant, with only 30,000 units
being put up annually in urban centres.
It is the urge to seal this housing gap that
saw Mr Robert Kamau, a local investor,
quit farming to invest in residential
apartments in Kiambu County. "I grew
maize on a large scale, but disposed of all
my investments and decided to invest in
property, since I felt that with real estate, I
could not go wrong," he told DN2.
Four high-rise residential apartments later,
Mr Kamau is a frustrated man. He is
mulling throwing in the towel and going
back to farming, since developing property
has not been as easy as he had imagined.
His main grievance, he says, are the
excessive regulations set by the county
government.
To begin with, he decries the numerous
licences and permits one must obtain from
various county and national departments,
which push up the cost of construction
considerably. "There are so many
expenses involved that I got stressed and
nearly despaired," he laments.
For instance, when looking for approval
before putting up one of his apartments,
Mr Kamau had to pay more than
Sh100,000 to the National Environment
Management Authority (NEMA). He then
had to fork out Sh70,000 to get the nod
from the National Construction Authority
(NCA) and a further Sh30,000 to the
Kiambu County Government.
OFFICE SPACE
The developer also accused county
officials of fraud.
"They deliberately drag the process for
weeks, and only those who are willing to
part with 'facilitation fees' can have the
process expedited," he claimed, alluding
to the corruption that sometimes occurs in
government lands offices. While getting all
the required approval stamps might be a
headache, Mr Robert Kamau says, the
real agony begins with the actual
construction.
"The county government has many
stringent building regulations that can
easily scare a potential developer," he
complains. "I was told that I had to
observe setbacks and building lines of six
metres to the front and 1.5 metres along
other boundaries. Doing this on a
commercial plot of 50 by 80 metres leaves
one with very little for actual development.
You then have to install an extra gate for
emergency when there's virtually no extra
space left."
Defending county councils, architect
Francis Gachuhi argues that the
regulations promote organised planning
and development of physical
infrastructure. "The investors currently
complaining should realise that even if
they were to invest in other countries, the
regulations there might be even tougher.
Land is a scarce resource and it must be
used in a manner that helps citizens to live
sustainably," he says.
Relevance to your business:
The housing and construction sector is one that is complex and bears several risk factors for
your business. Be sure to be extra well informed and prepared before embarking on related
business and investment activities in Africa.
February 2016
Invest in Sesame production in Tanzania and elsewhere in Africa: The export market in Japan is already waiting!
Japan is asking Tanzania for more sesame. But Tanzania so far is unable to deliver. Tap into the opportunity the right way!
Tanzanians are missing huge
opportunities of exporting sesame seeds.
The acting Director General of Trade
Development Authority (TanTrade), Mr
Edwin Rutageruka, says Lindi and Mtwara
regions alone could export 400,000 tonnes
of sesame seeds to Japan a year, but the
country has failed to capitalise on such a
lucrative opportunity.
Other regions which produce sesame
seeds are Ruvuma, Coast, Morogoro,
Dodoma, Tanga, Rukwa and Mbeya.
"Japanese traders have shown interest in
importing sesame seeds from our country
but we are failing to grab this huge
opportunity," he says.
According to a TanTrade export market
report of this January, the world market
price of one tonne of raw sesame seeds is
$900.
That means the country could earn $360
million (Sh720 billion from exporting
400,000 tonnes annually from Lindi and
Mtwara.
"In fact the Japanese have requested
sesame imports from our country in a
bigger amount than what we can afford to
meet," says Mr Rutageruka.
In 2014 Lindi and Mtwara produced
34,000 tonnes but they could produce
400,000 tonnes, according to him.
TanTrade officer Gilbert Waigama says
although the two regions are leading in
sesame farming in the country, farmers
have been losing because there is neither
a reliable market nor big processing plants
for value addition."There is only one
sesame processing plant in Masasi with
the capacity to process five tonnes a day.
However, the plant owner is facing chronic
problems of power interruptions and the
plant is still in its infancy."
He also speaks about an unreliable
market for sesame because the
warehouse system is not well practised in
the two regions.
. [Source: The Citizen]
Relevance for you business:
African governments are very eager to increase local value addition and produce for export. When you have the local produce, government's blessing, and a ready export market you should dive in and fill the gaps in the value chain.
February 2016
Simple but effective business
model in Africa: CV writing
services! Create a network or
agency and start with
minimum capital. But offer
services online to stay
competitive!
Remember our Africa Intelligence
January Issue? 'How to write a CV' was
among the top 4 Google searches for 'How
to'-subjects in 2015 in Ghana for example. Fill
a demand and you will be in business!
CVs By John, the leading online CV and
Cover Letter Writing agency in Nairobi,
has launched a new website as part of the
agency's latest endeavors at
strengthening its brand in the East African
market.
The Kenyan CV writing market has
witnessed an influx of new entrants, which
has given the Kenyan and international
community within the country more
options, and better pricing. This
notwithstanding, leading brands such as
CVs By John, an online service of
Excellence Media, have continued to
stave off the competition by offering
superior services at very affordable prices.
"Our new website projects the true power
of our brand. We have successfully used
psychology of space to create a relaxed
atmosphere, which resonates well with our
working environment and corporate
culture. Add to this our fair pricing, world-
class services, and fast turn-around time
of only 24 hours, and you realize why no
other agency comes close to CVs By
John," says John Wanjora, the agency's
Team Leader.
While majority of CV writers in Nairobi
operate walk-in bureaus, CVs By John
embraced the online platform right from its
inception in 2001. "This was the best
decision ever made by our agency, since it
has over the years enabled us to offer
rapid services to clients from across East
Africa," explains John.
The significance of this business model
cannot be gainsaid, given the heavy traffic
jams that are a characteristic of Nairobi
city.
"Going online meant we could offer rapid
CV and cover letter writing services even
for last-minute clients, who spot an advert
within an hour to the vacancy's closing
deadline. By leveraging on existing
communication technologies, and the M-
Pesa mobile money payment system, we
have empowered countless clients to take
advantage of such last minute
opportunities," offers John.
Going forward, CVs By John intends to
leverage on the use of technology to
expand the agency's market reach. "We
are already ahead of the competition in
terms of skills, experience, work flow
management, and customer service.
February 2016
"However, this doesn't give us the license
to relax; we have to continue innovating
and setting new standards of service
delivery. We have the will, the resources,
and the means to remain the market
leaders, and we are determined to help
the local CV writing industry to grow,"
John concludes.
(Source: allafrica.com)
Be part of Africa’s renaissance.
Build a grand lifestyle for yourself.
And make a positive impact on the lives of others. Today
Yours, Dr. Harnet
Buy my new book: “101 Ways to Make Money in Africa” – the most comprehensive book on African business ideas that actually work and market insights on over 300 pages. More details on
www.africa101book.com
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