27 June 2008
Chicago Forum Seeks to Link Africans, Americans in Agribusiness
Governments, private sector look for ways to increase prosperity in Africa
Chicago -- Closer business links and prosperity for all -- these goals have brought two businessmen, one from South Africa and one from the United States, to the 2008 U.S.-Africa Agribusiness Forum, hosted by the Corporate Council on Africa.
For his part, American business executive John Roller, of Africa Transportation and Logistics, is seeking wider business links. He represents small and medium-size African transportation companies owned by African entrepreneurs.
Roller is working to organize African entrepreneurs into franchised transportation operators across the continent, he said, “to empower them through education and marketing so that they might compete against the larger, primarily European-owned transportation organizations that dominate Africa.”
Roller said his for-profit company believes very strongly that “Africa must build an independent and strong middle business class in order to achieve what it is capable of achieving.”
In 2006, Roller said, his company, with the help of the U.S. Agency for International Development (USAID) and Africare, a private U.S. charitable organization, empowered African-owned transportation companies to move USAID food shipments from the port of Cotonou to five different locations in Niger.
“We have since done the same thing in Guinea-Bissau, in Cameroon, in the Central African Republic, and we are [now] doing significant business in Congo-Brazzaville and Zambia,” he said.
Roller said his company is expanding to include commercial agribusiness, the oil and gas industry and construction companies, moving goods around the continent and providing opportunities for African partners. “Our business is 100 percent African,” he said.
The idea, Roller said, is to help small businesspeople in Africa “develop wealth and employ the people of their own nation, to pay taxes in those countries and to put pressure on their governments for infrastructure development and good governance.”
Jacques Taylor, head of agricultural banking for Standard Bank Africa, shares Roller’s goal of greater prosperity. Seeking ways to link the large U.S. agribusiness companies in the United States with African farmers is what brought the South African banker to Chicago.
Taylor, based in Johannesburg, acknowledged that there are many challenges in Africa, but he stressed that if both American agricultural know-how and American expertise in running large farming operations were available to African farmers, both Africans and Americans could benefit.
“I think Africans would appreciate support from U.S. agribusinesses to try to see if we can get more agricultural growth in Africa,” he told America.gov June 25 at the forum’s opening reception. More growth would mean more food for everyone, he said, and that is particularly important as food prices are skyrocketing across the globe, and especially in Africa.
As the largest bank in Africa, Standard Bank is expanding its funding to Africa’s agricultural sector, Taylor said, doing business in 18 African countries.
“One of the challenges is to increase production,” in Africa, he said. “We all know that the soil in Africa is quite fertile. Commercial farmers in Africa can get up to seven tons of yield per hectare on maize while the emerging farmer in Africa only gets about 1.5 tons per hectare. So the challenge for us is to get the emerging farmer closer to the commercial farmer and to increase agricultural production by introducing better agricultural practices and fertilizer.” Most emerging farmers in Africa do not use fertilizer, he said, because of the high costs.
Taylor also commented that the lack of infrastructure in Africa is “one of the biggest challenges. It is not only roads, but storage facilities for grain.”
“Most of the rural farmers are 300 to 500 kilometers away from the largest farming center. That is one of the challenges we are facing,” he said.
Taylor said his bank has been operating in South Africa for 145 years. The only market in sub-Saharan Africa that trades agricultural commodities, he said, is in South Africa, the Johannesburg Stock Exchange’s South African Future and Exchange Market (SAFEX).
Another major challenge for African farmers, he said, is that unregulated markets make it difficult for farmers to trade and sell their crops in a timely manner. Both Kenya and Zambia, he said, are now looking at starting their own trading markets like SAFEX, but, he said, their efforts are in the very early stage.
Taylor said that while in Chicago he hopes to learn more about possibly linking to the Chicago Mercantile Exchange (CME Group), one of the largest global trading markets for agricultural commodities.
