OILS AND FATS IN EAST AFRICA REGION

ASSESSMENT, TRENDS & OPPORTUNITIES

R. Vijayraghavan, CEO East Coast Oils & Fats Limited

Tanzania

East Africa

Africa is the world's second-largest and second-most-populous continent. At about 30.2 million km² including adjacent islands, it covers six percent of the Earth's total surface area and 20.4 percent of the total land Area: 30,220,000 km² Population: 1,032,532,974 (2011)

State of East Africa- The Big Picture

Victoria Lake VICTORIA LAKE

ANY FORWARD LOOKING STRATEGISTS WILL HAVE COME ACROSS THE AFRICAN DEVELOPMENT BANK’S “AFRICA IN 50YEARS TIME REPORT PUBLISHED IN LATE 2011. IT’S ANALYSIS AND PROJECTIONS ON THE FUTURE OF THE FIVE EAST AFRICAN COMMUNITY COUNTRIES AND THEIR EIGHT NEIGHBOURS (COMOROS, DJIBOUTI, ERRITREA, ETHIOPIA, SEYCHELLES, SOMALIA, SUDAN AND SOUTH SUDAN) ARE STIKING.

THE BANK SHOWS THAT THESE 13 ECONOMIES HAVE GROWN FASTER THAN THE AFRICAN AVERAGE SINCE 2000. IN ALL FUTURE YEARS AND SCENARIOS, THE PACE OF EAST AFRICA’S GROWTH WILL BE FASTER THAN EVERY OTHER REGION IN THE CONTINENT. AS A RESULT, ITS SHARE OF AFRICA’S TOTAL GDP IS PROJECTED TO EXPAND FROM 11 PERCENT ( OF $ 1.71 TRILLION) IN 2010 TO A VERY LARGE 39 PERCENT ( OF BETWEEN $12 AND $16 TRILLION) IN 2060. EAST AFRICA’S SHARE OF THE CONTINENT’S POPULATION WILL HAVE EXPANDED FROM 27 PERCENT IN 2010 TO 32 PERCENT IN 2060. PER CAPITA GDP IS ALSO ANTICIPATED TO INCREASE FROM THE CURREN $657 TO BETWEEN $6,000 AND $ 7,000 IN THE NEXT 50 YEARS. NO SURPRISE THEN THAT OUT OF THE BLUE, EAST AFRICA HAS BECOME TO GO-TO PLACE ON THE CONTINENT, TO WHICH THE WHOLE WORLD IS PAYING ATTENTION. FOREIGN DIRECT INVESTMENT (FDI) INFLOWS TO THE REGION HAVE MORE THAN DOUBLED IN THE PAST TEN YEARS. TOTAL FDI INFLOWS INCREASED FROM $688 MILLION IN 2000 TO $ 1.7 BILLION IN 2010 WITH THE HIGHEST RECIPIENTS OF THESE INFLOWS BEING TANZANIA AND UGANDA. AL-JAZEERA , THE MEDIA NETWORK BASED IN QATAR, WILL SOON LAUNCH AL-JAZEERA KISWAHILI, SERVING AS A “NEW REGIONAL NEWS AND CURRENT MEDIA NETWORK IN EAST AFRICA”

THE WORLD IS COMING TO EAST AFRICA

THE WORLD IS COMING TO EAST AFRICA

EABC

THE EAST AFRCIAN BUSINESS COUNCIL (EABC) IS THE APEX BODY OF BUSINESS ASSOCIATIONS OF THE

PRIVATE SECTOR AND CORPORATES FROM THE 5 EAST AFRICAN COUNTRIES. IT WAS ESTABLISHED IN

1997 TO FOSTER THE INTERESTS OF PRIVATE SECTOR IN THE INTEGRATION PROCESS OF THE EAST

AFRICAN COMMUNITY.ORIGINALLY MEMBERS FROM KENYA, TANZANIA AND UGANDA, ITS MEMBERSHIP

WAS EXPANDED AFTER 2007 TO INCLUDE SECTOR FROM BURUNDI AND RWANDA.

THE MISSION OF EABC IS TO REPRESENT AND PROMAOTE THE INTERESTS OF THE EAC BUSINESS

COMMUNITY: PROVIDE VALUE ADDED SERVICES THAT CREAT NEW BUSINESS OPPORTUNITIES,

ENHANCE GLOBAL COMPETITIVENESS OF EAC BUSINESSES, AND ACTIVELY INFLUNECE GOVERNMENT

POLICIES TO IMPROVE THE ENABLING BUSINESS ENVIRONMENT.

Population Profile

Population Profile

THE EAC HAD A COMBINED POPULATION OF 139 MILLION IN 2010 AN INCREASE OF 24 MILLION FROM 115 MILLION IN 2005.` TANZANIA HAD THE LARGEST POPULATION IN THE REGION AT 45 MILLION. FOLLOWED BY KENYA ( 41 MILLION, UGANDA (34 MILLION), RWANDA (10 MILLION) AND BURUNDI ( 9 MILLION). SUB-SAHARAN AFRICA’S POPULATION IN 2010 WAS ESTIMATED TO BE 821 MILLION WITH EAC ACCOUNTS FOR 17 PERCENT OF THE CONTINENT’S TOTAL. POPULATION OF THE EAC REGION IS EXPECTED TO BE 237 MILLION BY 2030. SHOULD THE EAC EXPAND ITS MEMBERSHIP DURING THE NEXT DECADE OR SO, TO INCLUDE SOUTH SUDAN, SUDAN, ETHIOPIA AND THE DEMOCRATIC REPUBLIC OF CONGO, THE REGIONAL BLOC COULD ACCOUNT FOR 40 PERCENT OF THE CONTINENT’S TOTAL POPULATION.

Regional Fertility Rate (2005 – 2010)

Regional Fertility Rate (2005 – 2010) IN 2010 FERTTILITY RATES’ IN EAST AFRICA WERE HIGHEST IN UGANDA AT 5.9 CHILDREN PER WOMAN, DOWN FROM 7.1 IN 2005, AND LOWEST IN BURUNDI WITH 4.1 CHILDREN. TANZANIA’S FERTILITY RATE INCREASED SLIGHTILY FROM 5.1 IN 2005 TO 5.4 IN 2010., AS DID KENYA’S FROM 4 TO 4.6. FERTILITY RATES IN RWANDA AND BURUNDI FELL DURING THIS PERIOD TO 4.6 AND 4.1 RESPECTIVELY. BY COMPARISON, THE AVERAGGE FERTILITY RATE IN SUB-SAHARAN AFRICA ( SSA) WAS 4.8, DEMONSTRATING THAT EAST AFRICA’S FERTILITY RATES ARE ON AVERAGE HIGHER.

Per Capita Consumption of Edible Oil

S. No Country Population in million Kg per capita

Oil consumption

in m tons

1 Burundi 9 2.3 20,700

3 Kenya 41 9.1 373,100

6 Rwanda 10 2.5 25,000

7 Uganda 34 6 204,000

8 Tanzania 45 5.2 234,000

TOTAL OIL COMSUMPTION ( AVG PER CAP CONSUMPTON OF OIL 6.4) 892,000

IN THE YEAR 2010

Per Capita Consumption of Edible Oil

S. No Country Population in million Kg per capita

Oil consumption

in m tons

1 Burundi 11 4 44,000

3 Kenya 66 11 726,000

6 Rwanda 18 5 90,000

7 Uganda 60 9 540,000

8 Tanzania 82 9 738,000

TOTAL OIL COMSUMPTION ( AVG PER CAP CONSUMPTION OF OIL IS 9.02 ) 2,1380,000

IN THE YEAR 2030

REASONS FOR EXPECTED EDIBLE OIL DEMAND IN EAST AFRICA AND THE SURROUNDING COUNTRIES

INCREASE IN PER CAPITA EARNINGS – ECONOMY BOOM INCREASE IN POPULATION

INFRASTRUCTURE DEVELOPMENT LEADING TO ACCESS TO CUSTOMERS ALL OVER

PERCEIVED ADVANTAGE OF AWARNESS OF HEALTH FACTS ON PALM OIL.

CHANGING EATING HABITS.

Children And Youth

Children And Youth THE REGION’S POPULATION OF CHILDREN UNDER AGE OF 15 INCREASED FROM 53.3 MILLION IN 2005 TO 61 MILLION IN 2010.

CHILDREN MADE UP 45 PERCENT OF EAST AFRICA’S POPULATION IN 2005 AND 44 PERCENT IN 2010. LOOKING AHEAD 2030, THE ESTIMATED POPULATION OF CHILDREN UNDER THE AGE OF 15 WILL BE 96 MILLION, MAKING UP 41 PERCENT OF THE REGION’S 237 MILLION POPULATION. EAST AFRICA’S YOUTH ( PEOPLE AGE 15 - 34 YEARS ) WAS ESTIMATED IN 2010 AT 48 MILLION OR 35 PERCENT OF THE TOTAL POPULATION. BY 2030 THE 82 MILLION YOUNG PEOPLE WILL STILL ACCOUNT FOR 35 PERCENT OF THE TOTAL POPULATION.

Total Land Area

Total Land Area

EAST AFRICA’S TOTAL LAND AREA IS 170.24 MILLION HECTARES. IN 2008 TANZANIA MADE UP 52 PERCENT OF THE REGION’S AREA, FOLLOWED BY KENYA( 33 PERCENT), UGANDA ( 12 PERCENT ) , BURUNDI (2 PERCENT ) AND RWANDA ( 1 PERCENT ). EACH COUNTRY’S SHARE OF THE EAST AFRICAN TOTAL LAND AREA HAS REMAINED UNCHANGED.

Land Use In East Africa (2008)

Land Use In East Africa (2008) TOTAL AGRICULTURAL LAND IN EAST AFRICA AMOUNTS TO 81 MILLION HECTARES - ALMOST 48 PERCENT OF THE REGION’S TOTAL AREA. PASTURES TAKE UP 5.7 MILLION HECTARES ( 64 PERCENT ) , ARABLE LAND IS ESTIMATED AT 2.42 MILLION HECTARES ( 29.8 PERCENT ) AND 5.0 MILLION HECTARES ( 6.2 PERCENT ) ARE UNDER PERMANENT CROPS. GIVEN ITS LARGER SIZE , TANZANIA HAS THE LARGEST SHARE OF EAST AFRICA’S ARABLE LAND ( 41 PERCENT ) AND PASTURES ( 46 PERCENT )

Forest Area

Forest Area

In 1990 East Africa had 106.7 million hectares of forest. This area shrank by more than 9 percent to

97.7 million hectares in 2000 , and further 13 percent to 84.9 million hectares in 2010.In total, 21.8

million hectares of forest were cut down.

In 2010 Tanzania had the largest share of forest area in East Africa , with 45 million hectares (53 per

cent ).

Kenya's share of forest area in 2010 was 32 million hectares (38 percent ).

Foreign Direct Investment

Foreign Direct Investment

FDI INFLOWS IN THE REGION WERE AN ESTIMATED $1.7 BILLION IN 2010, A 152 PERCENT INCREASE FROM $ 688 MILLION RECEIVED A DECADE EARLIER. SINCE 2007 UGANDA HAS OVER TAKEN TANZANIA AS THE LARGEST RECIPIENT OF FOREIGN INVESTMENT IN EAST AFRICA.

Commercial Issues

EAC BUSINESS CLIMATE INDEX

World Bank Business 2012

EAC BUSINESS CLIMATE INDEX