February 2016

2016

Dr. Harnet Bokrezion

www.africajumpstart.com

Africa Business Intelligence Know The Latest Each Month - Be Ahead Of The Game in 2016

Issue 21

February 2016

This is Africa Business Intelligence ! Hi there, Thanks for downloading Africa Business Intelligence, which I will send you free of charge each month covering the latest market opportunities of the previous month and showing you what they mean for your business. The Internet has now become a reliable source for business and industry news on Africa, but much of it are news reports on large-scale investments or projects making it difficult to apply the information to your own venture. When I started to build my Africa business it was hard to get information that was relevant to start or grow my own business. I decided to fill that gap. As you may have read on my website, my main objective building Africa Business Jumpstart is to assist and guide those who want to start businesses or invest in Africa, and part of that is how to minimize obstacles and identify upward trending opportunities. In my view some of the obstacles many of us face doing business in Africa is a lack of perspective, relevant information, guidance, and time! So here you get insights into rare opportunities, neatly packaged! My monthly Africa Business Intelligence will provide you with a compact overview of the latest market developments that happened over the last few weeks in Africa and that are relevant to entrepreneurs and investors. You are then in a position to turn information into knowledge that has significance in your decision making processes. Reading these intelligence summaries on a monthly basis will also enable you to get a better understanding of the dynamics on the ground in a way that is relevant to your own undertakings, so you can make informed decisions faster and more confidently. Here is Africa Business Intelligence February 2016 issue summarizing key insights of the last month. I hope you will find it useful! Buy my book: “101 Ways to Make Money in Africa” – the most comprehensive book on African business ideas and concepts that actually work and market insights on over 300 pages. More details on www.africa101book.com Register for my Africa Business Bootcamp in the UK & USA. Bootcamp for LONDON UK closing soon!

February 2016

Want to open a logistics business in Africa? South Africa, Nigeria, and Kenya now ranked top 3 for investment and business opportunities in the area of logistics.

The industry opportunities across 'logistics' in Africa are huge, so much so, that Africa's three largest and most developed economies are still an open field for massive business success in this regard.

Global logistics executives have ranked

Kenya among the top promising

investment markets in Africa, after South

Africa and Nigeria.

A report titled Agility Emerging Markets

Logistics Index 2016 says a fast-growing

middle class and the demand for mineral

resources are important growth drivers in

the country.

Others are new oil and gas finds, rapid

infrastructure development, stronger

agricultural demand and increased foreign

direct investments.

While South Africa leads with 26 per

cent, Nigeria ranks second with 17.5 per

cent and Kenya follows with 15 per cent.

BUSINESS OPPORTUNITIES

"The market is open for first movers who

can navigate risk and nurture African

talent. The opportunity is for those seeking

to build long-term, sustainable businesses

that bring world-class practices and adapt

to local conditions," said Mr Geoffrey

White, the CEO of Agility Africa.

However, a majority of logistics firms are

still wary of entering the promising

markets.

More than 1,000 executives interviewed

said poor infrastructure, lack of power

generation and corruption are high risks in

the growing economies.

Relevance for you business:

The production and transport of goods in Africa is increasing and the logistic sector can hardly keep up. The timing is perfect for you now, especially if you are planning to start with a small venture, as a first mover advantage and hence little competition will allow you to grow faster. But instead of just 'buying trucks' think of a unique logistics service that you could offer in your target market.

February 2016

Investments in African tech increases considerably - new hotspots are Egypt, Ghana, and Tanzania! Maybe it is time for you to invest into African tech start-ups?

Tech start-ups are fast becoming a top choice for investors in Africa, especially Angel investors and VC. It's a trend that should get your attention if you are interested in investing in Africa.

25 African tech startups received a total

amount of funding in excess of $185.7

million (Sh19B) in 2015, according to a

report compiled by Disrupt Africa.

South Africa, Nigeria, and Kenya proved

investors' favoured destinations in 2015;

with 36 per cent of the startups that raised

funding based in South Africa, 24 per cent

in Nigeria, and Kenya in third place with

14.4 per cent of deals.

The top three highest amounts of funding

also went to these three locations. South

African startups raised in excess of

US$54,568,000 (Sh5.7B)

throughout the year; Nigerian startups

received over US$49,404,000 (Sh5.1B);

and Kenyan startups brought home over

US$47,365,000 (Sh4.9B).

Kenya's solar power start-up M-Kopa

accounted for over 90 percent of financing

that flowed towards Kenyan start-ups last

year. Other startups that secured

significant financing include BRCK (which

announced additional funding last week),

Kopo Kopo, Angaza, BitPesa and Asoko

Insight.

Of the 10 sectors monitored in the report,

the solar sector saw the most investor

activity, accounting for 32.9 per cent of

total funds raised. The fintech sector

proved a close second, securing 29.6 per

cent of the total funds.

"2015 was an exciting year for African

tech startups. Our data shows the

increasing vibrancy of our ecosystem, with

more quality tech startups, and more

investor activity than ever before," said

Gabriella Mulligan, co-founder of Disrupt

Africa.

"These are impressive numbers, showing

real growth in the amount of funding

available to African tech startups, but in

reality, they are merely the tip of the

iceberg," said Tom Jackson, co-founder of

Disrupt Africa. We expect to see further

growth in 2016."

The report also finds Egypt, Ghana, and

Tanzania are key hotspots for funding

activity; and provides detailed information

for each country, including deals per

location, average deal sizes and

highlights key deals.

[Source: allafrica.com]

February 2016

Relevance for you business:

If you are looking to invest it is helpful to look at growing trends among Africa investors who have already put their money into action. And here we go: The tech and ICT industries in Africa are becoming increasingly popular. Many tech ventures have reaped incredible returns on investment in a relatively short period of time making them an attractive choice.

Trending now across Africa:

Investor groups, platforms,

and services for local investors

are growing. Build a business

around that!

When we think of investors, we usually think of non-Africans and those in the Diaspora. But there is an increasing trend at various levels towards mobilizing, educating, connecting, and organizing local investors within Africa. This creates a new context for related business avenues you can build and pursue in this regard.

The Businesswoman Association in

eastern Moxico province aims to develop

the agriculture sector, so as to contribute

to food production and nutrition of families.

Speaking to Angop about the activities

carried out by the mentioned association,

Alice Muacu, an official member, justified

that the investment in the manufacturing

sector is due to "huge shortage of natural

food" and the upward trend in the

consumption of imported products.

She reported that as soon as they have

financed the agricultural projects in the

pipeline, the association may begin the

cultivation of rice, cassava, maize and

other products of the field, through the

cooperatives created in the province.

Alice Muacu appealed for greater unity of

the association, promoting the exchange

of ideas aimed at strengthening the

structures and meet the appeal of the

Executive, of counting on all forces of the

nation for social and economic

development of Angola. [Source: Breaking News

Hub]

Relevance for you business:

We can witness growing local investor communities and related activities on the continent. This has also been highlighted during Africa investment conferences. So far focus has been given to foreign or Diaspora investors, and this new trend opens new possibilities for engagement and related at your end: you can build online and offline investment platforms and groups, organize related events locally and internationally, improve deal flow, manage new investment funds or projects, or develop relevant services - advisory, legal, or PR for example.

February 2016

Produce honey: The demand is increasing both within Africa and globally

Honey production in Africa is probably most advanced in Ethiopia with a long standing culture in this regard. But Uganda has managed to decrease honey imports from 60% to 15% in six years, which is an incredible example regarding the potential that commercial honey production holds for you.

Farmers dealing in honey are advised to

form large groups that can help them

access cheaper finance to boost

production and also strengthen their

collective bargaining power in order to

reap the full benefits from the current

increase in the prices of honey.

The prices for honey have doubled in the

last one year, buoyed by an increase in

demand from consumers, who now have

more platforms, such as supermarkets, to

access the products. Dickson

Biryomumaisho, the executive director of

Tunado, an organisation responsible for

the development of the apiculture industry

in Uganda, said:

"We encourage farmers to form farmer

groups, especially women and youths

because that is where our focus is.

Although some farmers seem to be caught

unawares by the rise in the price [of

honey], others are coping very well." He

was speaking to The Observer about the

prospects of honey in the country.

Jackson Jurua, the chairman of Tunado,

told The Observer that "The prices of

honey and other bees products like

beeswax and propolis have almost

doubled, and the demand is also following

a positive trend." He was speaking at their

offices in Wandegeya.

He noted that in 2014 a kilogram of honey sold at Shs 5,000 as farm gate price. Today, a kilo going for between Shs 10,000 and Shs 15,000. Production of honey has also gone up to 12,500 tonnes in 2014/2015, from 5,000 tonnes in 2005/6.

With the growth in production, imported honey in the country has dropped.

Jurua said: "In 2004, we had more than 60 per cent imports until 2008 when the situation started changing. Now, figures show that only 15 per cent of honey on the Ugandan market is imported while 85 per cent is locally produced. We need to make sure that our processors also enter the high-end market but [meeting] high standards are a requirement for this."

[Source: allafrica.com]

February 2016

Relevance for your business:

Honey production is a great business if you are interested in working with local communities, disadvantaged populations segments such as women or youth, and you care about environmental protection.

The success for you lies in bulk production (or collection), quality control, packaging, and branding. Work on creating local producer cooperatives that are able to produce enough for both the local markets and exports, train them, and create a competitive product of high quality. Extra tip: Commercial wax production is also a lucrative business. It usually earns you more than honey and is an ingredient used in a range of fast moving consumer products high in demand.

How a weed is becoming an

export commodity - be among

the first to recognise the

opportunity!

'Cassia tora' is a plant that can be found in several African countries where it grows as a wild weed. Its leafs and seeds are palatable and can be used for teas and soups, but the plant has also skin health benefits. It seems like we found another contender for the global alternative health & healthy eating market.

Cassia tora or Senna tora, also known as

'Tafasa' in Hausa language, is gradually

evolving from a mere weed in bushes and

farmlands, to an export commodity in the

North, particularly in Katsina State, Daily

Trust has learned.

Though it is not being cultivated in farms

but its seed has vast soil reserves that can

remain viable for up to 20 years and can

produce up to 1,000 emerged plants per

square metre.

One of its merchants, who frequents

Katsina State markets from Zamfara

State, Alhaji Yunusa Abdullahi Tsafe, said

they opted for the business of cassia tora

due to the scarcity of Moringa leaves and

its high cost.

"Initially, we were into moringa leaves,

which we were sourcing from Kafur,

Malumfashi and other parts of Katsina

State. We then dry them for onward

transportation to Illela market, Sokoto and

Niger Republic. Scarcity of moringa,

especially in dry season, made us switch

over to cassia tora and it is gradually

gaining wider acceptance both here in

Nigeria and Niger Republic," said Alhaji

Yunusa.

February 2016

He added that children gather and dry the

leaves for them to buy at N400 per bag.

They later transport the commodity to Illela

market in Sokoto or Tasawa in Niger

republic, where a bag costs between N800

and N1,000.

Alhaji Yunusa Tsafe further explained that

tora leaves are mainly used as condiment

in vegetable soup (Taushe) while some

eat it served with groundnut cake.

An elderly woman, Malama Hauwa

Yankara, said that dried tafasa leaves can

be pounded and sieved like baobab

leaves and used in making soup.

"When pounding it, a little quantity of

butter should be added to make the

powder soft and tasty in the soup," she

said.

Alhaji Kasimu Abdullahi (Cuwa-Cuwa) is a

merchant who trades in both cassia tora

and moringa leaves and he said with the

escalating price of moringa to N16,000 per

bag, many of the consumers are resorting

to the use of cassia tora as a substitute,

because its price ranges from N800 to

N1,200.

"Most of the consumers are only using

cassia tora as a substitute of moringa

which is becoming more expensive daily

due to its high demand. Those that cannot

afford a bag of moringa at N16,000 are

going for cassia tora which is only N800 to

N1,200 per bag," Alhaji Kasimu said.

He further said cassia tora also has both

nutritional and medicinal values as it has

been used for treating skin diseases such

as ringworm, itching and psoriasis as well

as snakebite.

Relevance for your business:

The global market for alternative medicine and healthy eating is still growing fast as a multi-billion Dollar industry in the West and new exotic products are gaining momentum and increased

popularity. There may be an opportunity to build collectors in rural communities and the weed could be processed, branded, and exported by you.

Housing & construction business and investments: Major obstacles may come your way in certain markets - be aware of them before you start building your business!

The housing and construction industry is one of major opportunity across the continent. However, being unaware of some of the red tape or challenges in certain markets may cost you a lot of frustration and money.

According to the National Housing Corporation estimates released last year, Kenya has an annual housing deficit of

February 2016

300,000 units. To ease the problem, 150,000 new units are needed per year.

However, the construction of new houses

is almost stagnant, with only 30,000 units

being put up annually in urban centres.

It is the urge to seal this housing gap that

saw Mr Robert Kamau, a local investor,

quit farming to invest in residential

apartments in Kiambu County. "I grew

maize on a large scale, but disposed of all

my investments and decided to invest in

property, since I felt that with real estate, I

could not go wrong," he told DN2.

Four high-rise residential apartments later,

Mr Kamau is a frustrated man. He is

mulling throwing in the towel and going

back to farming, since developing property

has not been as easy as he had imagined.

His main grievance, he says, are the

excessive regulations set by the county

government.

To begin with, he decries the numerous

licences and permits one must obtain from

various county and national departments,

which push up the cost of construction

considerably. "There are so many

expenses involved that I got stressed and

nearly despaired," he laments.

For instance, when looking for approval

before putting up one of his apartments,

Mr Kamau had to pay more than

Sh100,000 to the National Environment

Management Authority (NEMA). He then

had to fork out Sh70,000 to get the nod

from the National Construction Authority

(NCA) and a further Sh30,000 to the

Kiambu County Government.

OFFICE SPACE

The developer also accused county

officials of fraud.

"They deliberately drag the process for

weeks, and only those who are willing to

part with 'facilitation fees' can have the

process expedited," he claimed, alluding

to the corruption that sometimes occurs in

government lands offices. While getting all

the required approval stamps might be a

headache, Mr Robert Kamau says, the

real agony begins with the actual

construction.

"The county government has many

stringent building regulations that can

easily scare a potential developer," he

complains. "I was told that I had to

observe setbacks and building lines of six

metres to the front and 1.5 metres along

other boundaries. Doing this on a

commercial plot of 50 by 80 metres leaves

one with very little for actual development.

You then have to install an extra gate for

emergency when there's virtually no extra

space left."

Defending county councils, architect

Francis Gachuhi argues that the

regulations promote organised planning

and development of physical

infrastructure. "The investors currently

complaining should realise that even if

they were to invest in other countries, the

regulations there might be even tougher.

Land is a scarce resource and it must be

used in a manner that helps citizens to live

sustainably," he says.

Relevance to your business:

The housing and construction sector is one that is complex and bears several risk factors for

your business. Be sure to be extra well informed and prepared before embarking on related

business and investment activities in Africa.

February 2016

Invest in Sesame production in Tanzania and elsewhere in Africa: The export market in Japan is already waiting!

Japan is asking Tanzania for more sesame. But Tanzania so far is unable to deliver. Tap into the opportunity the right way!

Tanzanians are missing huge

opportunities of exporting sesame seeds.

The acting Director General of Trade

Development Authority (TanTrade), Mr

Edwin Rutageruka, says Lindi and Mtwara

regions alone could export 400,000 tonnes

of sesame seeds to Japan a year, but the

country has failed to capitalise on such a

lucrative opportunity.

Other regions which produce sesame

seeds are Ruvuma, Coast, Morogoro,

Dodoma, Tanga, Rukwa and Mbeya.

"Japanese traders have shown interest in

importing sesame seeds from our country

but we are failing to grab this huge

opportunity," he says.

According to a TanTrade export market

report of this January, the world market

price of one tonne of raw sesame seeds is

$900.

That means the country could earn $360

million (Sh720 billion from exporting

400,000 tonnes annually from Lindi and

Mtwara.

"In fact the Japanese have requested

sesame imports from our country in a

bigger amount than what we can afford to

meet," says Mr Rutageruka.

In 2014 Lindi and Mtwara produced

34,000 tonnes but they could produce

400,000 tonnes, according to him.

TanTrade officer Gilbert Waigama says

although the two regions are leading in

sesame farming in the country, farmers

have been losing because there is neither

a reliable market nor big processing plants

for value addition."There is only one

sesame processing plant in Masasi with

the capacity to process five tonnes a day.

However, the plant owner is facing chronic

problems of power interruptions and the

plant is still in its infancy."

He also speaks about an unreliable

market for sesame because the

warehouse system is not well practised in

the two regions.

. [Source: The Citizen]

Relevance for you business:

African governments are very eager to increase local value addition and produce for export. When you have the local produce, government's blessing, and a ready export market you should dive in and fill the gaps in the value chain.

February 2016

Simple but effective business

model in Africa: CV writing

services! Create a network or

agency and start with

minimum capital. But offer

services online to stay

competitive!

Remember our Africa Intelligence

January Issue? 'How to write a CV' was

among the top 4 Google searches for 'How

to'-subjects in 2015 in Ghana for example. Fill

a demand and you will be in business!

CVs By John, the leading online CV and

Cover Letter Writing agency in Nairobi,

has launched a new website as part of the

agency's latest endeavors at

strengthening its brand in the East African

market.

The Kenyan CV writing market has

witnessed an influx of new entrants, which

has given the Kenyan and international

community within the country more

options, and better pricing. This

notwithstanding, leading brands such as

CVs By John, an online service of

Excellence Media, have continued to

stave off the competition by offering

superior services at very affordable prices.

"Our new website projects the true power

of our brand. We have successfully used

psychology of space to create a relaxed

atmosphere, which resonates well with our

working environment and corporate

culture. Add to this our fair pricing, world-

class services, and fast turn-around time

of only 24 hours, and you realize why no

other agency comes close to CVs By

John," says John Wanjora, the agency's

Team Leader.

While majority of CV writers in Nairobi

operate walk-in bureaus, CVs By John

embraced the online platform right from its

inception in 2001. "This was the best

decision ever made by our agency, since it

has over the years enabled us to offer

rapid services to clients from across East

Africa," explains John.

The significance of this business model

cannot be gainsaid, given the heavy traffic

jams that are a characteristic of Nairobi

city.

"Going online meant we could offer rapid

CV and cover letter writing services even

for last-minute clients, who spot an advert

within an hour to the vacancy's closing

deadline. By leveraging on existing

communication technologies, and the M-

Pesa mobile money payment system, we

have empowered countless clients to take

advantage of such last minute

opportunities," offers John.

Going forward, CVs By John intends to

leverage on the use of technology to

expand the agency's market reach. "We

are already ahead of the competition in

terms of skills, experience, work flow

management, and customer service.

February 2016

"However, this doesn't give us the license

to relax; we have to continue innovating

and setting new standards of service

delivery. We have the will, the resources,

and the means to remain the market

leaders, and we are determined to help

the local CV writing industry to grow,"

John concludes.

(Source: allafrica.com)

Be part of Africa’s renaissance.

Build a grand lifestyle for yourself.

And make a positive impact on the lives of others. Today

Yours, Dr. Harnet

Buy my new book: “101 Ways to Make Money in Africa” – the most comprehensive book on African business ideas that actually work and market insights on over 300 pages. More details on

www.africa101book.com

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