Africans-Stop-Being-Poor
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1563-4108

AFRICABIZ ONLINE SYNOPSIS RSS FEED
Trading And Investing In & Out Africa

ISSUE 45 - VOL 1
JANUARY 15 - FEBRUARY 14, 2003

Dr. Bienvenu-Magloire Quenum
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Welcome to AFRICABIZ HTML Email edition.Previous issue available at this link

Dear faithful reader,

BEFORE TRADE COMES PRODUCTION OF GOODS AND SERVICES AT COMPETITIVE PRICES

As here extensively exposed, There Are Already Aplenty of Initiatives To Boosting African Economy. Score of International Supporting Organizations, several African Regional Organizations, Multilateral Economic Treaties. Etc.

Nevertheless, at the beginning of the 21 rst century, 50 years after most of said initiatives were established, Africa is still in the backyard of international development as shown by its meager share (1% to2%) of the international trade.


What is amiss? Why is it so?

Percentage of main Export Products From Sub-Saharan African Countries

It is always good to ask the right question in order to finding the adequate solution.

United States of America's political leaders conceived the concept of "Trade and Not Aid" to help solving the developing gap in Africa. Good. That sounds good. However, we have to analyze the formula to evaluate its relevance in solving the non-development state that currently exists in Africa.

However, before you sell anything, you have to produce it first, at competitive price to be in the position to sell. You certainly agree. Now what does Africa has to offer? Only agricultural and mineral bulk commodities! (See Annexed- Figure.) Even that is beyond the capability of most African countries. Of course, there are oil-producing countries and those (quite the same) endowed with huge deposits of natural mineral resources - iron, manganese and aluminium ores; a dozen countries in total out of 48 sub-Saharan African countries. Rare are African countries that are in the position to sell on the international marketplace value-added manufactured products. Those that can do that offer mostly textiles, small tonnages of agribusiness productions - outside cash crops: Coffee, cocoa beans, tea, cotton - and canned food. South Africa and Mauritius.

In short, one is entitled to say that Africa, at the current state of its non- performing economy, has nothing "worthwhile" to offer to compete on the international trading marketplace of goods and services. Therefore, we have to reconsider the formula "Trade but Not Aid" as misleading and non-productive. "Trade but Not Aid" is a concept that could not solve the developing gap in Africa because even countries that have something to offer are as poor as the ones that could sell only peanuts - considering the per capita GNP and the high percentage (up to 90%) of the populations living with less than US$ 2 (two) per day.

Thus, a better formula like this one: "Trade plus Developing Aid" is more appropriate to tackle the development gap existing currently in sub-Saharan African countries. That formula spells as follows:

- Trading agreement and facilitation treaties to help African countries sell agricultural commodities developed countries - at remunerative purchasing prices.

- The availability of "global" financing, to carry out developing schemes. In other words, provide financial aids to African countries, to set up strategic developing schemes that effectively produce manufactured goods together with the development of a diversified agriculture and expansion of services.

Indeed, to manufacture all sorts of goods and propose attractive Services, Africa needs financing that it could not provide itself. Financing to establish plantations, industrial plants to process crops into high-added value productions.

All that leads us to pinpoint the main hindrance that is impeding Africa to take off. That is the lack of proper financing
to carry out developing schemes.

Indeed, once solutions made available to providing "global" financing for the implementation of projects included in African developing schemes, the international community would have made a huge step to fighting poverty in Africa, to further integrating the continent into the mainstream of the international trade.

All existing initiatives are good ones. Treaties with the European Union and AGOA are useful.However, all these remarkable initiatives have either a "limiting" implementing flaw (for instance, Structural Adjustment Programs concentrated solely on macroeconomics equilibrium); or do not tackle the essential and stop midway. For instance, treaties with the European Union have not "globally" considered the problem of the access to the European market for African agricultural productions or manufactured goods - except for Banana, Sugar and Pineapple. African Growth and opportunity Act - AGOA - is also a good treaty, however its execution is restricted by political "eligibility" procedure, which appreciation are the exclusive privilege of the donor - the United States of America.

All that said, what African countries are badly in need for is a global financing system, which "activation" is "user friendly", not hindered by red tape and political appreciation of files and dossiers but relies on the economic evaluation of projects.

Let us stress out the word "global". It means that the financing of developing schemes would yield positive results only if the scheme (of a particular African country) considered in its "entirety". If that is not the case, the South and North would continue signing treaties, which do not help African countries get proper economic development and increase its share of the international trading.

Indeed, right now, profit-making projects that supported by comprehensive business plans are in limbo, since ages, in ministerial cupboards, around the continent. Proper financing is lacking - in spite of innumerable treaties and international cooperation conventions above mentioned - to carry out said projects that could lift the continent from the backyard to the prosperous league of developed countries.

Local commercial banks and so-called "Development Banks" established in African countries do not participate in financing developing in African countries. They have "shy", conservative and not "global" approach to the financing projects included in developing schemes. (One should remark, however, that the responsibility relies also on African governments that do not propose to the "development banks" attractive and profit-making projects.) Anyway, for the time being, African "development Banks" prefer to concentrate efforts on less risky financing undertaking such as "pampering" clients for savings deposits or granting credit facilities to local representative of international trading companies; or providing credit lines to financing the harvest and storage of cash crops: cocoa; coffee, cotton, tea and cashew nut. Click here to read more

"CONTRIBUTOR'S GUIDELINES" are available here. You are invited to contribute to AFRICABIZ ONLINE MONTHLY ISSUE - with articles related to "How Africa Could Bridge The Developing Gap".

Many thanks for subscribing to Africabiz. See you on February 15, 2003.

Dr. B.M. Quenum
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Business Opportunities

TROPICAL FRUIT INDUSTRY AS INCOME BUILDING POWER FOR AN AFRICAN COMMUNITY / PART XI: PRODUCTION COST OF BROMELAIN / A FOOD ENZYME

Pineapple cultivated in African countries is exported as fresh or canned fruit, or locally processed into juice concentrates and syrup for the local and export market. Pineapple bran, the cake / residue obtained after extracting the juice, has a high content of vitamin A: it is an excellent feed for livestock. From the juice citric acid could be extracted, or processed into alcohol, after fermentation.

The most interesting processed product, however, is a food enzyme called Bromelain or Bromelin, which is a competitor to papain.


Table below gives an idea about the investment amount and production cost of Bromelain , based on a factory producing 50 Metric Tons per year: (For the full table click here).

Items
Amount
(US$ x 1,000)
INVESTMENT

Total investment

1,295
PRODUCTION LEVEL
1- Crude Bromelain = 50 metric tons at full capacity.
OPERATING COSTS

Operational Expenses: Raw material (around 2,320 metric tons of pineapple stems) harvesting, handling and transport to plant floor - production costs - insurance - utilities - staff and hands / management salaries - external management assistance - amortization - interests on loan - merchandise packaging. Etc.

975
Cost of production off Plant Floor of One Metric Ton of Crude Bromelain19,5

Prices are fluctuating in the US$/ kg 45 to 120 range since 10 years running in close relationship with offer and demand.

Years6/9012/906/9112/916/9212/926/9312/934/94
$US/kg45.0045.0045.0045.0045.0099.0099.50120.0085.00

Obviously there is an opportunity for African countries to entering the market of food enzymes and grabbing a biggest share because, owing to the above pricing of papain / bromelain on the international marketplace, producing and exporting - even small quantities - should be a profitable line of business for African entrepreneurs.

Indeed, there is no doubt that African countries have, with papain and bromelain, a business opportunity with a secure credit worthy outlets to the US, the EU and Japan; not to mention the huge market for nutriments and supplements not yet fulfilled and available right now in the whole continent; plus the possibility to supplying (in the near future) papain and bromelain to the pharmaceutical industry for the production of vaccine against AIDS / HIV.

Next issue 46 shall deal with the potential market existing in African countries for Nutriceucals and food Supplements.


For more details on international food enzymes market please visit following link.


More on bromelain production cost


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MAKE USE OF A USER FRIENDLY SPELL CHECKER

Here is ieSpell: An Add-on Spell Checker for Internet Explorer, which makes it easier to spell check webpage's text fields / Form or web mail.

Some web mail systems do have integrated server-side / online spell checker. You certainly have noticed that the spell checking process loads another page to proceed and may take a "long time" to finish the checking process. In forum and webpage's form, such server-side spell checking system is often not available.

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