southern africa trade and investment hub

11 May 20191

Quarterly Progress Report –

January 1 – March 31, 2019

Southern Africa Trade

and Investment Hub

Cover photo credits: Shutterstock 2

Southern Africa Trade

and Investment Hub

QUARTERLY PROGRESS REPORT

January 1 –March 31, 2019

Contract No. AID-674-C-16-00004

Submitted to:

USAID/Southern Africa

Prepared by:

DAI

DISCLAIMER:

The authors’ views expressed in this document do not necessarily reflect the views of the United States

Agency for International Development or the United States Government.

3

Table of Contents

1 Executive Summary 3

11 Annexes

A. Finance and Investment Interventions 19

B. Grain and Food Trade Interventions 24

C.AGOA Exports and Trade Interventions 32

D. Performance Monitoring and Evaluation Plan 37

4

Hub Mandate

The Hub plays a key role in the new Prosper Africa

initiative to support U.S. investment, grow African

enterprises, and improve the overall business climate

as part of the journey to self-reliance and economic

expansion.

Vision

Advancing enterprise-

driven development to

unlock Africa’s markets

ApproachObjectives

• Delivering high-impact,

market systems change

• Serving as the USG’s

go-to regional team on

trade and investment

• Strategy drives

programming

• Integrated

interventions led

by local expertise

The USAID Southern Africa Trade and Investment Hub is a regional platform that advances

USAID’s enterprise-led development strategy to increase prosperity in Africa and the

United States by promoting deeper trade ties and increased access to open markets and

finance.

55

MOZAMBIQUE

ZAMBIA

SOUTH AFRICA

ESWATINI

(Swaziland)

LESOTHO

SEYCHELLES

BOTSWANA

NAMIBIA

MAURITIUS

ZIMBABWE

ANGOLA

MALAWI

DEMOCRATIC REPUBLIC

OF THE CONGO (DRC)

LUSAKA

PRETORIA

Office Locations

Southern African Region:

Active program

Eligible program

Regional Buy-Ins:

Zambia Trade Facilitation Agreement

Program (Buy-In): $3.09 million

Millennium Challenge

Corporation/Lesotho Buy-In:

$1.2 million

Partnering with:

• 12 USG Agencies

• 8 Bilateral USAID

Missions/U.S.

Embassies

Maximizing Results through Regional Engagement,

Buy-Ins and Inter-Agency Partnerships

$73.7million

Contract

Ceiling

6

Innovating for Prosper Africa

Maximizing Business through a Whole-of-Government Enterprise-led Approach

U.S. Corporate Investment Fund Capital Markets Development

• Launching a U.S. Corporate Investment Fund targeting U.S. businesses engaged in agriculture and agribusiness and other growth sectors in South Africa to assist with regional supply chain investment and development.

• Partnering with capital markets across the region, e.g. Johannesburg Stock Exchange (JSE) and Lusaka Stock Exchange (LuSE), to strengthen regional exchange development that helps provide domestic and foreign capital to businesses.

Agriculture Infrastructure Investment Gender Inclusion Fund

• Promoting large-scale investment for agriculture infrastructure as well as warehouses, cold storage, roads, irrigation, water/sanitation, ports, etc. to increase efficiencies in the regional agribusiness sector.

• Creating a fund focused on gender-lensed financing targeting women-owned and operated businesses, fund managers, and financial sector professionals to on-lend across the region.

SO3U.S. engagement

U.S. business and

investment through South

Africa as a gateway into

regional markets.

SO1Firm-level

supportIncreased investment

and exports.

SO2Market systems

transformationAgricultural and non-

agriculture markets

transformed through

trade.

7

Driving Programming with Strategic Objectives (SOs)

USAID/REGO Development Objective (DO):Increased sustainable economic growth in targeted areas

Facilitating U.S.

investment, technology

and consulting sales and

innovation

Promoting

productivity and

growth of high-

impact sectors

Enabling U.S. and

African investment

and trade

Supporting USG

agencies with expertise,

market insights, and

local networks

Building trade capacity

to enhance reciprocal

trade between the U.S.

and Southern Africa

8

Top-Line Achievements Q2 and Life of Project (LOP)

Promoting Enterprise-led Trade and Investment Across Southern Africa

Value of new USG and

private sector investment

leveraged (non-agriculture)

Value of exports

supported

$54.6 Million

$11.0 Million



leveraged (agriculture)

$93.8 Million

$4.0 Million

$53.7 Million

$7.4 Million

Q2 Q2 Q2

Cumulative achievement

to date

LOP


to date


to date



leveraged (non-agriculture)

$155.0 Million



leveraged (agriculture)

$96 Million$64.0 Million

LOP Target LOP TargetLOP Target

Value of exports

supported

5/9/20199

Increase in Domestic, Regional and International

Sales Through USG Assistance

Value of annual sales of farms and firms receiving USG assistance

FY2019 (Q1-Q2) Value of annual sales by destination market

$0 $10 $20 $30 $40 $50 US$ Millions

Y3 (FY2019) Target

Y3 Achievement

to date

$39,514,037.51 $50,311,183.67$10,797,146.16

$43,000,000.00

Q1

117%Y3 %

Achievement

to date

$ 0 6

Y3 (FY2019) Q2Y3 (FY2019) Q1

$7,260.57

$10,734,247.74$11,467,353.10

$23,407,533.73

$512,383.54

$4,182,404.99

Rest of

Africa

Asia Europe Region Rest of the

World

US

$10

$5

$15

$20

$25

$0

US$ Millions

10

• Completed assignments in six

Hub-supported countries

• Majority included analyses on

regional expansion or accessing

new export markets

• $104 million invested in three

FTF countries

Through Q2, the Hub unlocked $164 Million in Private

Sector Capital in Six CountriesCrossBoundary’sWork

Closed and Pipeline Investments by Country

Closed and Pipeline investments by Sector

• Supported 38 transactions valued

at $347 million

• 47% of Hub-supported

transactions have reached

financial close

• Food security enhanced through

$107 million in agricultural

investments

Transaction Portfolio

Transaction Portfolio

107

13 8

36

136

39

34

0

20

40

60

80

100

120

140

160

Agribusiness Financial services Consumer goods Other services

USD

Mill

ion Closed

Pipeline (excl. closed deals)

9

5243

36

123

8

63

96

24

0

20

40

60

80

100

120

Zambia Malawi Mozambique South Africa Botswana Namibia Multi-country

USD

Mill

ion

Closed

Pipeline (excl. closed deals)

11

Providing Advisory Support to Three Investments with Strong

Regional Trade and Gender Integration Linkages, Valued at c. $44m

*LOP Results/Project Impact are subject to transaction reaching contractual close.Each deal is limited by privilege and confidentiality agreements.

Intervention Milestones and Results Q2 LOP Results/Project Impact

AgriProtein, a global leader in large scale “nutrient upcycling” of food waste, is fundraising for the company’s first commercial site.

• Hub is providing advisory support in structuring and review of investor facing materials.

• Hub is also conducting vendor due diligence analysis.

• AgriProtein’s products support food security by providing a sustainable alternative to fishmeal in aquaculture and agriculture feed

• Enhanced regional trade through exports to Zambia

• Expect to create 80 direct in factory jobs

• Increased investment

FinFind, an innovative online finance solution that matches SMEs with appropriate finance products, is raising capital to finance its South Africa operations and replicate its business model in other countries regionally.

• Hub is providing advice on the refinement of FinFind’s business model and pitch materials for the company to raise additional capital.

• Regional expansion of business model in Botswana, Eswatini, Namibia, Rwanda, and Zambia

• Gender integration as company is owned by a woman entrepreneur

SummerPlace Equity Partners, a female-owned fund manager, is pursuing an investment into a female owned and operated scholar transportation company.

• Hub market study assessing the scholar transportation industry to size the market and project growth in demand for services.

• Hub will also conduct a full review of the Investment Memorandum.

• Enhance Gender Lens Investing in sub-Saharan Africa in support of female fund manager

1.

2.

3.


Absa is a South African

financial service provider,

offering personal and

business banking as well as

corporate and investment

management services. It is

formally a part of Barclays

Africa group.

• The Hub team worked

with ABSA to design its

Supplier Development

Product, which is to be

implemented in several

Southern African

countries.

• Facilitating $12 million of

new private sector

investments utilizing DCA

products

• Regional expansion

leveraging brand visibility in

Zambia and Mozambique

facilitating further funding

PostBank is a Lesotho

based bank which provides

personal and business

banking products and

services.

First National Bank and

Nedbank are two of the

largest financial services

groups in Africa

• The Hub team is currently

advising on the

development of an SME

lending program as part of

the Interagency

Agreement with the

Millennium Challenge

Corporation (MCC).

• Develop a capacity-building

program to facilitate $50

million in SME lending in

Lesotho

• Develop market linkages

between public- and private-

sector participants

12

Increasing Access to Enhanced Credit and Investment

Facilities with DCA Products

13

Formalizing Food Trade to Improve Food Security

Addressing constraints and increasing sales and exports of agriculture products


Strengthening food

trade by linking

market sector actors

• Grain strategy scope of work

approved for a grain strategy design in

partnership with USAID East Africa

Trade and Investment Hub

• Shortlisting of sectors: groundnuts,

soy cake, seed systems, and legumes

for development of targeted

interventions

• One groundnuts Deal Note signed and

one under review by potential partner

• $12 million in agricultural exports

to date

• An improved regional food trade

market system

• One Deal Note signed with

COMACO for groundnuts and peanut

butter exports to South Africa and

Botswana sourced from Zambian

supplier Jungle Nut

1.

SOUTH AFRICA

MALAWI

ZAMBIA

SUPPLIERS

Nasfam Rice

Mount Meru Soy cake export.

Soy bean import

Sunseed Oil Soy cake

SADM Moringa

Afrinut Groundnut

CP feeds Animal feed export

Rab Processors Pigeon pea (dahl),

groundnut, soy

ETG Tea and coffee

Malawi Mangoes Mangoes dried

ETG Beans (white, kidney, sugar) export.

Salt import (Botswana)

Rice Milling Company Cassava starch

Universal Industries Cassava starch

Transglobe Pigeon pea (dahl), Moringa

Kelfoods Eggs, egg powder

Lilongwe

BUYERS

Zemcor Herbs Spices Pulses

and Legumes

Crown Foods Herbs Spices Starches

Wesjan (Co-Packers)

Cape Herb and Spice Herbs Spices

BUYERS

Unilever Herbs dried vegetables maize starches

All Joy Herbs Pulses legumes

Farmgate SA Herbs spices pulses legumes starches Maize

Groundnuts

Africa Holdings

Ltd

Herbs Spices, Legumes, ground nuts

CCL Herbs spices pulses legumes ground nuts

Johannesburg

Cape Town

SUPPLIERS

Zambia fresh market development

(Sable Farms)

Fresh produce

Zdenak Ready mixes (cake, biscuits)

CHC Cassava starch

New Rotations Zambia Groundnut

Copperbullet express

Zambia Agriculture Information System Market information service

ZAMACE/LUSAKA Stock Exchange

development

Commodity market system

AFGRI

Livestock Services

Bien Donne Farm Quails

Mobile Payment Solution Payment solutions

Monsanto/Bayer Hybrid maize seed

Jungle nut Groundnut

Good Nature Agro Cassava starch

Good Nature Agro Beans

Yalelo Fish fillet

COMACOGroundnuts,

processed

Mumbwa Farmers

Ginning & Pressing

Cotton

fuzzy seed

Blantyre

Siavonga

Eastern Province

Chipata

Mumbwa

Botswana Meat

Commission (BMC)

Beef

LnL Fresh Produce

Lesotho Millennium

Development

Agency (LMDA)

Horticulture /

Livestock

LESOTHO

SWAZILAND

BOTSWANA

Lusaka

Ideal Fruit Apples

Prime Result Dried Fruit

Facilitating Regional Value Chain Supplier and

Buyer Transactions

Buyers

Suppliers

15

Expanding AGOA Exports and U.S. – Africa TradeCreating market linkages and opportunities for private enterprise


Exports/Linkages

Support

• Over $4.0 million exported globally by Hub-

supported firms

• $968,374.99 (24%) of the exports were

to the U.S.

• Increased AGOA utilization

• New practices and technology

applied

• Market diversification/expansion

AGOA Utilization

Strategy Development

and Awareness

Activities

• Lesotho AGOA Strategy completed

• Awareness session held in South Africa, in

partnership with Eastern Cape Development

Corporation; similar events have led to more

than 700 buyer-seller linkages.

• Consultations with dates and table grapes

growers held in Namibia, which export some

30 million kilograms of grapes to the

European Union and Middle East; opportunity

for organic dates identified

• Improved AGOA utilization

• Economic diversification promoted

• Improved international

competitiveness

International Buyer

Missions Support

• Followed up on Jambo Trading-Red River

Foods deal; results to be reported in Q3

• Source Africa buyer negotiating with Lesotho

apparel suppliers

• Discussions initiated with stakeholders for

upcoming buyer missions involving U.S.

retailer and olive oil buyers

• Buyer/seller linkages established

enabling sustainability

• Relationships established

• Better understanding of the

region’s supply capacity

Supplier Profiling • Magic Trade Show workwear and

Lesotho supplier directories completed

• Institute of Food Technologists( IFT19) and

Summer Fancy Food Show exhibitor profile

directories under development

• Improved export linkages

1.

2.

3.

4.

16

Company Country ProductU.S. Market

Deal Size (US$) Q1

Q2 U.S.

Exports

New Pipeline

(USA)

(3-12months)

Bakali Foodstuffs

ccSouth Africa Health snacks 50,000

60,000

(negotiations)

Black Mamba

FoodsEswatini Authentic African sauces 25,000 35,000

Empirestate

TradingSouth Africa Dried fruits & nuts 1,000,000 1,000,000

Cape Herb &

SpiceSouth Africa Herbs & spices 50,000 300,000,000

Fynbos Fine Foods South Africa Sauces 194,233 12,272

In-Our-Green

HouseSouth Africa Olive oil 100,000

Jonday Foods SA/Canada Pastry products 50,000 50,000

Jambo Trading USAMac nuts- partnership with

Golden Macadamia

2,000,000 -

10,000,0001,000,000

Khoisan Gourmet South Africa Rooibos, rooibos matcha 300,000 5,0005,000,000

(Germany)

Maungo Craft BotswanaAuthentic spreads

(jams, jellies)50,000 200,000

AGOA/U.S. Export and Trade Pipeline

Source: Q1& Q2 FY19 returns from supported companies17

Company Country Product

U.S. Market

Deal Size

(US$) Q1

Q2 U.S. ExportsNew Pipeline (USA)

(3-12months)

Rio Largo Olive

EstateSouth Africa Extra virgin olive oil 25,000 $15,000

Rugani Juice South Africa Health, natural kosher juice 240,000 240,000

Something South

AfricanUSA Various specialty Foods 80,000 1,200,000

Sunshine Nut Co Mozambique Roast & spiced cashew nuts 3,500,000 352,440 600,000

RedRiver Foods

(US)USA

Macadamia nuts & dried

mangoesTBA (negotiations)

Taste Africa Foods South Africa Specialty sauces and other 176,124 500,000

Ukwazi Makadamia Eswatini Macadamia nuts 600,000 115,780 600,000

ZaamrootZambia Moringa products 1,925,000 1,925,000

CGM Lesotho Denim, Workwear $1,795,000

Afri Expo Textiles Lesotho Workwear $90,000

Cookie Cutter South Africa Swimwear $50,000

Ho’s Enterprises Eswatini Workwear $250,000

AGOA/U.S. Export and Trade Pipeline

18

Breaking Down Institutional Barriers to Trade


Support to the

National Trade

Facilitation

Committee

(NTFC)

• Zambia private sector stakeholders

incorporated into the NTFC to enable

their participation in trade reforms

• Trade Facilitation Awareness workshops

held in Lusaka and Chipata to increase

compliance with the country’s trade laws

• Reduced border transaction costs through

introduction of international best practices

• Reduced border dwell times through new

procedures brought about by new legislation

• Increased compliance that results in faster

border clearance, which in turn impacts cost and

time indicators

Fees and Charges

Assessment in

Zambia

• Technical Working Group (TWG) formed

to oversee the assessment of fees and

charges on imports and exports in the

country

• Aligning of fees and charges to the World Trade

Organization – Trade Facilitation Agreement

(WTO – TFA). This will impact both time and

cost indicators

• Ensure fees and charges collected on

importation and exportation are not for

purposes of revenue

Inform private

sector on SPS

best practices and

international

standards

• Private-sector producers, processors,

exporters, and traders sensitized on SPS

best practices, international standards, and

AGOA requirements for compliance

• Compliance with SPS requirements will result

in reduced border inspections and testing

Support to the

private sector

with SPS

laboratory

Inspections and

testing

• Gap analysis of public and private

laboratories’ conformity to international

standards completed

• Designed workshops to build capacity to

test and certify commodities for cross

border trade and AGOA

• Create capacity for testing and certifying

exports and imports

• Certification for AGOA exports

Zambia Trade Facilitation Agreement Program (buy-in)

1.

2.

3.

4.

19

Supporting Lesotho to Secure an MCC Compact

for Economic GrowthThe Hub is strategically serving interagency development needs (buy-in)

• Continued to assist the Lesotho Millennium

Development Agency (LMDA) on the design

phase of the Millennium Challenge

Corporation (MCC) compact for Lesotho.

• Visited Washington MCC offices to engage

with the larger team (procurement, legal,

management) to discuss the cooperation

between USAID and MCC as part of the

Inter-Agency Agreement and fund

development. Also, continued to structure

the fund.

• Met with OPIC regarding potential funding.

• Assessed capital stacking options to create a $100

million impact investment fund with the assistance of

an MCC first loss and the Lesotho Office Bearers’

Pension Fund investment.

• Engaged with the MCC team in Washington, D.C.

around different structures and possibilities

• Reviewed models in the MCC compact concept

note, identifying linkages and concept alignments

with the Hub’s Lesotho AGOA Utilization Strategy

• Met with OPIC, the Global Innovation Fund (GIF)

and other potential investors together with MCC

senior management to discuss the options of

investing into the fund.

• Advising on the TA facility that would be linked to

the fund. A $30 million TA fund is envisioned to help

support the investment fund.

MCC Lesotho Compact Q2 Hub

Interventions

Hub-MCC Compact Milestones

20

Appendix A

Finance and

Investment

Interventions

The Hub’s Finance & Investment interventions aim to accelerate U.S. and international

investment and finance to small- and medium-sized enterprises (SMEs) and strategic

value chains that strengthen economic growth and trade.

21

Finance & InvestmentB

ankin

g, s

truct

ure

d t

rade, f

inan

ce

• Bank capacity building in partnership with DCA, OPIC/USDFC and other U.S. Government (USG) agencies;

• Strengthening Warehouse Receipt System (WRS) and commodity exchanges, building WR finance capacity among financial institutions, and deploying broader ecosystem support including facilitating investment in agricultural warehouse infrastructure

Fin

ance

and inve

stm

ent

polic

y

• Support the development of national marketing plans for countries to create an improved investment climate

Inve

stm

ent

faci

litat

ion a

nd fundin

g pla

tform

deve

lopm

ent

• Provide investment advisory services to:

i. address firm-level barriers;

ii. catalyze investment into the Southern African region; and

iii. facilitate the execution of investments

Time

Investmentfacilitation

Policy advocacy and reformIncreased capacity

in asset class

Impac

t

USG subsidized investment advisory

services serve as a catalyst that helps

transactions reach financial close and

deepen capital markets

• Success story case studies

demonstrate success of Private

Equity (PE) asset class in specific

sectors, and perceptions of

intolerable risk are disproven

Industry associations serve as intermediaries

between PE industry and government by

aggregating industry outcomes and

developing lobby documentation for policy

reform to create an enabling environment

• Baseline 1: Assumes elongated policy

feedback loop with enabling environment

reform as expected outcome

• Baseline 2: Assumes elongated policy

feedback loop with no results in policy

reform

• Baseline 1: Policy reform

helps PE asset class receive

higher allocations reducing

transaction costs as portion

of deployment budget,

ending need for USG

subsidy

• Baseline 2: No policy

reform; however, plethora

of case studies increase

Limited Partner (LP)

confidence, attracting new

LP’s with larger allocations

and better hurdle rates

Public-private engagement is crucial for market system development in frontier markets

Impact of interventions is a function of time

SME financing & employment

Increased capacity in

asset class allows

establishment of

larger funds to invest

in more diversified

staged SMEs,

increasing

employment and

economic growth

Baseline 1

Baseline 2

Hub uses a market systems approach to support successful

transactions that enhance investor confidence, increase asset

class allocations and drive policy reform

28

85

20

3

90

10

3

69

17

Investments with U.S. linkages U.S. founder/C-suite management

team

U.S. based investment firm U.S. technology & procurement U.S. customers

Closed pipeline ($) Supported pipeline ($), excl.closed

Closed and Pipeline Transactions with U.S Linkages

U.S

linkages in

portfolio

42%

Non-U.S linked

transactions in

portfolio

58%

42% (c. $118m) of the Hub’s investment portfolio consists of transactions

that illustrate strong U.S. linkages across several aspects, including

ownership, technology and procurement and sales

24

Spotlight – Exeo Capital Investment into Jumbo Brands

The Hub supported EXEO Capital, a fund manager focused on growth investments

in the food & agribusiness sector, that sought to acquire a 36.5% stake in Jumbo

Brands, a South African beverage and snacks manufacturer.

HIGHLIGHTS

Hub support provided: • The Hub conducted operational due diligence assessing Jumbo Brands sales, recruiting,

distribution, and merchandising efficiencies. The Hub also developed a market study of

the snacks and beverage sector in South Africa and analyzed expansion opportunities

in the rest of Southern Africa.

Country: • South Africa

Sector: • Agribusiness

Employment: • Company is strategically located to employ from one of South Africa’s largest

townships, increasing skills development in a country with double-digit unemployment

Regional trade: • Jumbo Brands has a good trade focus, sourcing 30% of its inputs from suppliers in

Africa and Latin America and supplying retailers in countries such as Botswana, Zambia

and Zimbabwe.

"The continued long-term growth potential of the sector, its defensive character, sound exit

potential and scope to scale businesses to a regional level all bode well for a good investment

opportunity“– Avril Stassen (Exeo Capital Partner & Co-Founder)

*Each deal close amount is limited by privilege and confidentiality agreements.

The fund manager required Hub support to conduct operational due diligence and a market study to inform its investment committee’s decision to pursue the investment.

25

Spotlight –Khulasande Capital Invests into Dartcom SA

The Hub supported Khulasande Capital, a black female-owned private equity and

investment vehicle, seeking to acquire a stake in Dartcom SA, a South African fiber optic

equipment importer and assembler.

HIGHLIGHTS

Hub support provided: • The Hub provided commercial due diligence services focusing on the competitive

position of Dartcom as well as an opportunity assessment for enhancing regional

exports. This was a follow-on investment into the asset, the first having been facilitated

by the Hub in FY18.

Country: • South Africa

Sector: • Telecommunications

U.S procurement: • Dartcom’s primary equipment supplier is a U.S technology company that manufactures

fiber optic solutions, which enhances U.S business access to African markets.

Regional trade: • The Hub developed a country filter that would help the investor identify markets for

possible expansion, which would enhance regional trade.

Other: • The transaction will increase broadband internet access in rural South Africa, which is

tied to a 1% increase in GDP.

The fund manager required Hub support for its commercial due diligence process to inform its investment committee’s decision to pursue the investment.

*Each deal close amount is limited by privilege and confidentiality agreements.

26

Appendix B

Grain and

Food Trade

Interventions

• Target Sector and Intervention Selection

Based on buyer-supplier opportunities identified in the previous quarter

(see maps below), the Hub shortlisted the following sectors:

• Groundnuts: opportunities for trade from Zambia to South Africa

• Soy and soy cake: exports from Malawi and Zambia to East Africa

• Agri-inputs: seed exports from Zambia to Angola

• Grain trade: linkages between Southern Africa and East Africa

• Approach

• Step 1: Leverage identified transactions that probe or catalyze market

systems development

• Step 2: Regional Market Systems Assessments to identify constraints and

prioritize Hub interventions that are feasible, scalable, and impactful

• Step 3: Design and implement interventions for market system change

27

Market Systems Change to Improve Food Security

28

SOUTH AFRICA

KENYA

Beans exports to ZA

6000 MT

Peanut butter to BD

240 MT

Peanut butter to NAM

240 MT

Peanut butter to ZA

240 MT

Maize hybrid seed to AO

100 MT

Maize hybrid seed to DRC

100 MT

Beans exports to ZA

1000 MT

Transactions in the Hub’s Staple Food Pipeline

• Products that

enhance food

security include

groundnuts and

beans

• Maize hybrid seed

trade can

dramatically improve

yields

• 3 Key Sectors for Market Systems Development

• Groundnut, Soy, Seed (Ag Inputs)

• All three regional market systems are undergoing structural change with

supply/demand mismatches

• 5-year horizon: Consistent commercial relationships more efficiently

distribute products across the region, with actors collaborating to resolve

systemic problems

• Approach

• Support transactions or regulatory changes that probe or catalyze market

systems development

• Regional Market Systems Assessments to identify constraints and

prioritize Hub interventions that are feasible, scalable, and impactful

29

Market Systems Change to Improve Food Security

30

SOUTH AFRICA

Soybean cake exports to ZA

$260,000

Soybean cake exports

to ZW $163,000

Soybean cake exports to TZ

$225,000

Soybean cake exports to ZA

$120,000

Soybean cake exports to MZ

$160,000

12 mil MT

264,000 MT

120,000 MT

51,000 MT

773,000 MT

44,000 MT

350,000 MT

111,000 MT

Soybean cake exports

Soybean meal/cake production

Soybean seed production

Processing Capacity for Soybean seed

Soybean cake exports to ZW

$235,000

2.2m MT

600,000 MT

350,000 MT

500,000 MT

KENYA

Regional Soybean Meal/Cake/Seed

Production and Export

• Regional soy cake production

approximately 1.3 million MT valued

at $454 million

• Formal trade across borders less

than 10%, extensive informal trading

• Opportunity to formalize trade

through addressing trade finance,

trade facilitation, logistics, costs

• Opportunity to increase volumes

traded under commodity exchanges

(domestic and cross-border)

• Increased trade will increase

efficiencies and resource allocation

across the market system

integrating soy grain, oil, cake, animal

feed and livestock value chains

SOUTH AFRICA

KENIA

DRC CONGO

Surplus areas

D eficit areasArgentina

559 /$227mil,000MT

Soy cake processing

Formalizing Trade within an Integrated Market

System: Soy Cake Potential to Drive Change

32

Maize Deficit Region

Maize Surplus Regions

• Develop Hub

grain trade

strategy

• Solving trade

finance, logistics,

and NTB

bottlenecks for an

improved food

trade market

system

SOUTH AFRICA

KENIA

DRC CONGO

+295,191 MT

13.5 mil MT

-25,627 MT

-151,246 MT

2.1mil MT

-90,013 MT

2,4 mil MT

+349,712 MT

-112,000 MT

-465240 MT21,000 MT

1,7 mil MT

58,000 MT

-196,300 MT

-114,983 MT

3,4 mil MT

EAX

ZAMACE

BMM

Formalizing Grain Trade from Surplus to Deficit Areas

33

Spotlight – COMACO Groundnuts & Peanut Butter

Regional Export

COMACO is a Zambian social enterprise that buys crops from 179,000 farmers at

premium market prices and produces high-value food products sold across Zambia

under the brand It’s Wild!, including high quality, price-competitive peanut butter.

Hub Deal Note signed to support first regional exports to Botswana, South Africa

HIGHLIGHTS

Size: • $480,000 (estimated annual)

Feasibility,

Scalability:

• COMACO product is competitive, meeting market demand at lower prices.

• Product samples sent to two potential buyers in Gaborone and under test marketing

phase.

• Groundnuts consignment sold to South Africa buyer as test marketing. Buyer facilitated

negotiations for better prices and establishment of a Zambia groundnuts marketing

system.

Impact: • Demonstrating that improving systems for export can open up sourcing opportunities from

sub-region into distributors and buyers in Botswana, Namibia, and South Africa (SA) and

catalyze buyers’ change in behaviors and perceptions.

• Increased sales to SA and Botswana will increase incomes and jobs and smallholder farmers’

incomes with potential for large-scale impact upon reaching the SA market.

• NB: 80% of groundnut farmers in Zambia are women, leveraging the impact to benefit

children and families.

34

Appendix C

AGOA Exports

and Trade

Interventions

The Hub’s AGOA Export and Trade interventions focus on promoting AGOA utilization by

firms from AGOA-eligible countries through: development of AGOA Utilization Strategies,

promoting export linkages and buyer missions, and export market development. The key focus

value chains are textiles and apparel, footwear, leather and accessories, and specialty foods --

including processed foods, dried fruits, and nuts.

The AGOA Enhancement & Extension Act (2015)

recommended all AGOA-eligible countries

to have AGOA Utilization Strategies.

35

AGOA Export and Trade

Hub

Textile

s &

A

ppar

el

Other Exports

Specialty

Fo

ods

AGOA

Utilization

Support

SOUTH AFRICA

NAMIBIA

• Meat (beef/game)

• Table Grapes

• Dates

• Olive Oil

• Sea Food

• Home Décor

BOTSWANA

• Apparel

• Natural/Organic Products

• Handicrafts/Accessories

SOUTH AFRICA

• Textile, Apparel &

Macadamia Nuts

• Culinary Oil (Olive Oil +

other)

• Beverages

• Confectioneries

• Dried Fruits

LESOTHO

• Textile, Apparel &

Footwear

• Natural/Organic Product

(Rosehip)

• Dried Fruit

• Medicinal Products

MOZAMBIQUE

• Natural/Organic (baobab)

• Honey

• Dried Kidney Beans

• Macadamia Nuts (shelled) &

Peanuts

• Crafts

MALAWI

• Macadamia Nuts

• Honey

• Handicrafts

• Tea

• Paprika

• Mangoes

• Textile and Apparel

• Organic (ginger, garlic)

Hub-Promoted AGOA Exports

ESWATINI

• Apparel

• Accessories

• Macadamia Nuts

• Sauces

ZAMBIA

• Honey (organic)

• Dried Fruits

• Leather

• Crafts

• Horticulture Products

$28,400,000.00

$28,600,000.00

$28,800,000.00

$29,000,000.00

$29,200,000.00

$29,400,000.00

$29,600,000.00

$29,800,000.00

$30,000,000.00

$30,200,000.00

FY19 Target YTD FY19

37

Exports and Trade: FY 2019 Target v. YTD (Actual)

Regional

$2,334,823.00

Rest of World

$358,370.34

US

$968,376.99

$30 million $29 million

EXPORT DESTINATIONS | Q2 FY19

Europe

$370,245.10

EXPORTS: FY19 TARGET VS YTD ACTUAL

$30,000,000.00

$29,029,948.91

3838

Spotlight – Hub-Registrar Corp Partnership

The Hub, in partnership with Virginia-based Registrar Corp, launched a portal to assist

Southern African exporters seeking entry to the U.S. market. The portal, which guides

potential exporters through a checklist of U.S. Food and Drug Administration (FDA)

requirements, allows visitors to submit questions and seek customized guidance from the

firm.

This market-demanded facility creates sustainability as firms are empoweredto develop their own food safety plans in compliance with the U.S Food Safety Modernization Act (FSMA).

HIGHLIGHTS

Hub support: • The Hub conceptualized the idea, identified an expert partner and the

regional beneficiaries

Country: • All Hub focus countries

Sector: • Specialty Foods

Regional Impact: • 25 specialty food firms from seven Southern African firms will be

exhibiting at the Summer Fancy Food Show, while eight from three

countries will exhibit at IFT19. This collaborative market systems initiative

brings in U.S. expertise, helps companies meet international requirements,

improves company export competitiveness, increase export to the U.S.,

and creates a more sustainable way of supporting regional firms.

39

Appendix E

Performance Monitoring

and Evaluation Plan

40

PMEP Indicators Matrix with Q2 and LOP Results

IndicatorQ1

Results

Q2

Results

FY2019

Cumulative

Results to

Date

FY2019

Target

LOP

Target

LOP

Results

1.Value of exports in targeted non-

agricultural and agricultural commodities

from Trade Hub supported firms/ entities/

associations

$25,021,164.87 $4,008,784.04 $29,029,948.91 $30,000,000 $155,000,000 $54,611,712.53

2.Value of annual sales of farms and firms

receiving USG assistance $39,514,037.51 $10,797,146.16 $50,311,183.67 $43,000,000 $203,000,000 $50,311,183.67

3.Value of new USG commitments and

private sector investment leveraged by

the USG to support food security and

nutrition

$3,246,730 $7,492,410.00 $10,739,140.00 $24,000,000 $96,000,000 $93,813,286.95

4. Value of new non agricultural USG

commitments and private sector

investment leveraged by the USG to

support food security and nutrition

$12,038,299.52 $9,755,550.00 $21,793,849.52 $16,000,000 $64,000,000 $52,528,609.52

5. Percentage of firms that experience an

increase in profitability or associations

experiencing an increase in self-suffciency

as a result of Hub interventions

N/A N/A N/A 10% 20%

10%

(of firms reported

increased

profitability in

2018)

6. Number of agriculture and non-

agriculture jobs created with Trade Hub

assistance

0 0 0 3,000 10,000 1,448

41

PMEP Indicators Matrix with Q2 and LOP Results (cont.)

IndicatorQ1

Results

Q2

Results

FY2019

Cumulative

Results to

Date

FY2019

Target

LOP

Target

LOP

Results

7. Number of for-profit agricultural sector private

enterprises, that applied improved organizational-

level technologies or management practices as a

result of USG assistance

0 1 1 51 190 13

8. Number of for-profit non-agricultural sector

private enterprises, that applied improved

organizational-level technologies or management

practices as a result of USG assistance

0 20 20 32 110 78

9.Value of agriculture-related financing accessed as a

result of USG assistance$0 $0 $0 $10,000,000 $60,000,000 $16,810,533.30

10. Number of public private partnerships formed

with Hub assistance0 24 24 12 45 41

11. Number of milestones in improved institutional

architecture for food security policy achieved with

USG support

4 5 9 26 64 30

12.Time required to trade goods across borders

and along corridors as a result of Trade Hub

assistance

0 0 02% reduction by

September 2019

10%

reductionN/A

13. Cost to trade goods across borders and along

corridors as a result of Trade Hub assistance0 0 0

2% reduction by

September 2019

10%

reductionN/A

42

Takele Tassew, USAID, Contracting

Officer’s Representative

Jim Winkler, DAI, Chief of Party

southern africa trade and investment hub

Documents