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AFRICABIZ VOL 1- ISSUE: 39
JULY 15 - AUGUST 14, 2002
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Editor: Dr. Bienvenu-Magloire Quenum
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A WORD FROM THE EDITOR


Dear visitor and international investor,


We warmly welcome you, if this is your first visit to Africabiz Online - The ultimate newsletter on trading and investing in 49 sub-Saharan African countries. If you are a regular and faithful reader, welcome back.

If you are a regular and faithful reader, welcome back.

- G-8 JURY POSTPONED THE EXAMINATION OF NEPAD

The New Partnership For Africa's Development - Nepad - endorsed by the Organization for African Unity's Summit (OAU) held in Lusaka, Zambia, on July 11, 2001 had been presented before the G-8 heads of states two-day (26-28 June 2002) meeting at Kananaskis, Canada.

On June 28, 2002 the meeting ended up with promise from the participants to properly address the matter on the next meeting scheduled for Paris, France next year.

France's Jacques Chirac declared to the gathering that: "The G8 was unanimous in being optimistic - and I am one of the optimists - about growth" ...Promising to focus again on Africa's needs when he hosts the next G8 summit next year. Click here for more.

The Promoters of NEPAD - SA's Mbeki, Algeria's Bouteflika, Nigeria's Obassanjo, and Senegal's Wade have been working on the project since 4 years.. Expectation was high to getting final approval stamp from the G-8 at the Canadian meeting.

Instead of a final and decisive approval and financial support declaration from G-8 heads of states, only vague promise of a further examination had been issued. And at next year G-8 meeting there is no certainty that full financial support will be decided upon to matching NEPAD promoters' expectations.

The Canadian meeting's rebuff is a surprise only for those who have "neglected" to take into account the negative impact that Zimbabwe's land reform crisis is having on Africa's credibility.

Indeed, G-8's rebuttal was to be expected as one of the basic concept of NEPAD - Peace, Security, Democracy and Political Governance Initiative - is daily badly challenged, since three years running, by Zimbabwe's Mugabe.

It was obvious, before the Canadian meeting, that G-8's leaders were not going to give their approval to such blatant bad governance behavior.

Furthermore, for the time being, NEPAD implementation strategy is not completely clarified; even if theoretically it is well laid down into seven directive policies:


1- Peace, Security, Democracy and Political Governance Initiative.
2-
Economic and Corporate Governance Initiative.
3- Bridging the Infrastructure Gap.
4-
Human Resource Development Initiative
5-
Capital Flows Initiative.
6-
Market Access Initiative.
7-
Environment Initiative

One can see that these policies are global and not yet linked to well identified and profit making development projects. Click here to further review these initiatives.

Several years will pass by (in the range of one decade to be conservative) before feasibility studies and business plans linked to specific regional projects are drafted and agreed upon by the different African states and approved by international financing bodies such as the IMF, the World Bank and so on.

- Therefore, one can predict that Paris G-8 meeting in year 2003 will not give full support to NEPAD. More analysis and documentation will be required from NEPAD sponsors... and time will continue to pass by.


In a previous delivery titled: COULD NEPAD QUICKLY HELP SOLVING THE ECONOMIC DEVELOPMENT PROBLEMATIC OF AFRICAN COUNTRIES? following questions have been raised:

1- Could the Nepad initiative be the driving force to solving the urgent and acute economic development problematic African countries are now confronted with?

2- Could the basic concept of Nepad - the development of common and regional infrastructure projects - be sufficient to triggering the sustained economic development process needed by each African country?

3- Could Nepad engineer the ultimate economic take off of any African country?

4- Could Nepad create sufficient riches for African countries' economies to allowing for the fair distribution of wealth amongst the populations on a sustained and permanent basis?

Quick argumentation to the contrary had been exposed here.

- MISLEADING ECONOMIC CONCEPTS

In an article here available titled: MISLEADING ECONOMIC CONCEPTS TO BE DISCARDED we dig further into the matter of Regional Development, that is the driving concept of NEPAD; to see if it is capable of engineering the much needed and necessary sustained economic development of Africa.

The conclusion reached is that NEPAD's basic concept of Regional Development is a misleading one. Regional Development is not the solution to the acute unemployment (30 to 60% of the working force) prevailing now in each African country.

- Therefore, in addition to the efforts made to promoting Nepad, national African governments will gain more, in accelerating their development process, if they manage also to devising and promoting projects oriented development schemes.

That is to say if they take, right now, necessary steps to establishing, on their respective national territory, integrated operations, which link together agriculture, industrial transformation of crops and expansion of related services.

The experience of the Asian tigers proved that these integrated development schemes are more attractive to private foreign investors and to the international commercial banking system.
Click here for a case study.

These project oriented integrated schemes are capable of - contrary to NEPAD, as here exposed - triggering double-digit economic growth rate in any African country; the sine qua non for their economic take off. Click here for more.

Contributor's Guidelines is here to review. Your contribution on "How African countries / entrepreneurs could bridge the developing gap" is welcome
.

Many thanks for dropping by and see you here on August 15, 2002.

Dr. B.M. Quenum
Editor of AFRICABIZ
Contact Dr. Bienvenu-Magloire Quenum

BUSINESS OPPORTUNITIES IN AFRICA


- Several business opportunities with high profit making potential which are economic catalysts and components to the Strategy for African Countries - here available - have been introduced to you. They are listed in following table.

a- SHEA BUTTER (Issues 5, 6, 7, 11, 12, 13)
b- BLUE GOLD (Issues 14, 15, 16, 17, 18, 19)
c- FREEZE-DRIED PAPAIN (Issues 20, 21, 22 and here)
d- KENAF (Issues 23, 24)
e- VEGETABLE OIL (Issues 25, 26, 27 and 28)
f- CEREALS (Issues 30, 31, 32, 33)
g- FRUITS (34, 35, 36, 37, 38)

- TROPICAL FRUITS INDUSTRY AS INCOME BUILDING POWER FOR AN AFRICAN COMMUNITY / PART VI : SOME ECONOMIC FIGURES ABOUT THE SETUP OF ONE HECTARE OF TOMATO AGRIBUSINESS

There are more than 4,000 varieties of the tomato, ranging from the small, marble-size cherry tomato to the giant Ponderosa that can weigh more than 1.5 kg.

In Issue 38 the potential market to producing fresh tomato in sub-Saharan African countries had been estimated at 585,000 metric tons per year.


- COST OF PRODUCTION OF FRESH TOMATO PER HECTARE

The yield of a tomato field (soil production) depends on the variety of the tomato seed and the cultural techniques (soil amendment, irrigation system, pest management, overhead irrigation or trickle fertigation instead or simple streaming / overflooding irrigation and so on.)

The most sophisticated the cultural techniques are, the highest the yield per hectare; that could start from 5-10 metric ton per hectare to reaching 80 -120 metric tons per hectare in South of Extremadura -Spain.

Table 1 below gives production figures about some countries:

PRODUCTION COSTS COMPARISON - YEAR 1999
Algeria Brazil Tunisia
Cost US$ - Ha 1,500 2,200 2,648
Average Yield - Metric Ton 15 55 43
Cost - US $ - Metric Ton 100 40 61.58
Source: www.tomatoland.com

Table 2 below lists the various items contributing to the costs of production per hectare of a well organized and managed tomato agribusiness:

COSTS OF PRODUCTION PER HECTARE - TABLE 2
ITEMS UNIT PRICE QUANTITY TOTAL
A - VARIABLE COSTS / US $
A - 1 - SOIL AMENDMENTS
Composted manure plus gypsum, fish powder, kelp extract. Etc. Metric Ton 39 6 234
A - 2 - PEST TREATMENT
Efficient approved organic chemicals hectare 95 1 95
A - 3 - SEEDS / TRANSPLANTS / IRRIGATION
Seeds thousand 3.5 60 210
Trickle irrigation hectare 350 1 350
Tomato transplants hectare 250 1 250
A - 4 - HANDS AND STAFF
Technical staff chief hour 2 10 20
Permanent hands hour .20 360 72
Seasonal hands hour .20 400 80
A - 5 - EQUIPMENT MAINTENANCE / FUEL
Machinery repairs hectare 15 1 15
Fuel liter 1 40 40
A - 6 - PACKAGING COSTS
Picking plastic baskets - .25 50 12.5
Packing crates - .25 2,500 625
Total Variable Costs 1,746
B - FIXED COSTS
Machinery and miscellaneous equipment hectare 350 1 350
Amortization hectare 35 1 35
Total Fixed Costs 385
C - MANAGEMENT
Supervision costs hour 60 1 60
Total Costs / hectare 2,191
Adapted From Dr. Robin G. Brumfield, Specialist in Farm Management

- If the technical management of the plantation is well organized; particularly if trickle irrigation is applied and pest control up to standards, the expected yield per hectare could be in the range of 50 metric tons (conservative estimate) per hectare. That gives the cost of production of one metric ton of fresh tomato to be approximately: US $ 43.82, which compares well with figures in Table 1.

- GROSS REVENUE ESTIMATION

Based on the estimated yield above outlined of 50 metric tons per hectare, one gets the following table that lists Production (according to plantation size in hectares) and related Gross Revenue (Calculated with a minimum of 20% margin on production costs if the fresh tomato is sold to a concentrate processing plant.) Let us emphasize that in view of the selling price of fresh tomato in most of sub-Saharan African countries, the margin above production cost could easily be put at 50%:

GROSS REVENUES X 1,000 US$
Hectares 50 100 200 300 400 500
Metric tons 2,500 5,000 10,000 15,000 20,000 25,000
Revenues 21.9 43.8 87.6 131.4 175.2 219
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