Impactful investment opportunities found in Africa’s agroprocessing and light manufacturing sectors (en)

Delegations from Ethiopia, Kenya, Mozambique and Zambia have travelled to China to seek investment in agriculture and agroprocessing – priority sectors for economic development in these countries – as part of a roadshow held by ITC’s Partnership for Investment and Growth in Africa (PIGA) in collaboration with the Foreign Economic Cooperation Centre (FECC) in China’s Ministry of Agriculture and Rural Affairs.

The African delegations, travelling to Beijing, China, in September 2019, comprised representatives of the Agency for Promotion of Investment and Exports of Mozambique (APIEX), the Ethiopian Investment Commission (EIC), the Kenya Investment Authority (KenInvest) and the Zambia Development Agency (ZDA) as well as agriculture experts. They presented strategies, policies and incentives for attracting investment in their countries to more than 100 potential Chinese investors.

Twenty-five face-to-face meetings between African delegations and potential investors took place, leading to several new investment leads and progress on existing leads that will have great impact on jobs and development in Africa.

‘The discussions were very useful,’ said Mrs. Belarmina Capitine, investment promotion expert at APIEX. ‘Potential investors understood the business environment, legal framework and business opportunities, particularly in the cashew nut sector; we will follow up closely to progress on identified leads.’

Mr. Shi Yuanfa, president of ZheJiang Beimei Agriculture Co. Ltd, described PIGA as ‘a unique model, enabling and showing great incentives for Chinese companies to find business partners and invest together in Africa’.

To make the most of the roadshow, Mr. Shi invited five company heads in the chicken and egg sector and the grain and vegetable sector to explore synergies and hold group discussions with African partners.

PIGA assists Chinese companies to ‘think out of the box’ when it comes to traditional industrial parks in Africa and encourages them to create their own parks and joint investment ventures. Follow-up visits to each African country have been planned in coming months to resolve remaining issues with the support of PIGA country teams.

Field visits enable African counterparts to assess how investment projects would work

In China, PIGA organized field visits to companies planning to invest in Ethiopia and Zambia in order for the African delegations to better understand the business models that investors are planning to set up in each country. During the visits, Zambian and Ethiopian representatives got a thorough understanding of the social and environmental impacts each project could have.

The Ethiopian delegation visited a Chinese beef-producing company with a $100 million project to raise cattle in Ethiopia for exports to the Middle East. The project will benefit thousands of farmers in the southern and central regions of Ethiopia.

Mr. Henok Mesfin, director, private sector, at the Ethiopian Agriculture, Agricultural Transformation Agency (ATA), said: ‘We found the visit was an eye-opener and the market linkage with farmers is the model ATA is perusing in the sector. The project will highly impact the beef sector of the country.’

The Zambian delegation visited a Chinese company with a $140 million project in chilli and marigold agriculture in Zambia. The project will involve thousands of farmers and use environmentally friendly food processing models.

Mr. Malata of the Ministry of Agriculture and Rural Affairs encouraged Chinese counterparts to consider working with local training institutions in the agricultural sector to develop local capacities.

Several new leads identified during CIFIT

In addition to the roadshow, 2019 marked the second year that PIGA has participated in the China International Fair for Investment and Trade (CIFIT), which took place in Xiamen, China, 8–11 September.

CIFIT is currently China’s most important investment promotion event aimed at facilitating bilateral investment. PIGA took this opportunity to use a new promotion model for its African partner countries by involving investment promotion agencies (IPAs) and industrial park representatives to attract Chinese investors.

According to the World Investment Report 2019, released by the United Nations Conference on Trade and Development (UNCTAD) at CIFIT, China is the third biggest provider of foreign direct investment (FDI), with $130 billion invested in 2018, while also becoming the largest FDI recipient among developing economies in 2018. The same report showed that FDI flows to Africa rose by 11% to $46 billion in 2018.

‘With its fast growth pace, adequate climate and growing middle class, Africa is full of investment opportunities in the agroprocessing and light manufacturing sectors, but investors have a hard time making investment decisions due to the information gap,’ said Mr. Mao Tianyu, PIGA project advisor. ‘CIFIT is a starting point for them to build connections with African counterparts and initiate investment projects.’

A hundred Chinese companies visited the ITC/PIGA booths to learn about each country’s investment attraction strategies, opportunities and incentives.

On this occasion, African delegations extensively used the investment promotion platforms developed under PIGA to attract and accompany investors on their investment journey in each country. These meetings led to several new leads being identified that will be followed up by field visits and discussions at coming PIGA events, such as the World Export Development Forum (WEDF) in Addis Ababa in November 2019.

PIGA is part of Invest Africa (IA), a flagship programme of the United Kingdom of Great Britain and Northern Ireland’s Department for International Development (DfID) facilitating foreign direct investment with high development impact into selected African countries.

Under Invest Africa, PIGA aims to contribute to job creation and sustainable growth in Ethiopia, Kenya, Mozambique and Zambia by supporting these countries to attract foreign direct investment, specifically Chinese investment, in the agroprocessing and light manufacturing sectors. PIGA is also designed to enhance the capacity of these countries for effective investment promotion.

PIGA is implemented by the International Trade Centre (ITC) in cooperation with the China Council for the Promotion of International Trade (CCPIT) and the China–Africa Development Fund (CADFund).