Due to a rapid growth in population of about 1 million per year in each country, Uganda, Kenya and Tanzania are all facing an increasing demand for food.This calls for new initiatives within the agri- and horticultural sector.

At the same time a rapidly growing middle class is looking for more refined products of high quality and so are the export markets, which demands efficient post harvest handling, storage facilities and distribution-and marketing systems.

The Danish private sector holds the needed solutions; that is why access2innovation is focusing on reaching these business opportunities in close collaboration with our local partners. 

AGRIBUSINESS

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Indicator Kenya Tanzania UgandaGDP-current prices (Million USD) 59,201 36,362 24,905Population (Million) 43 49,6 35GDP per capita (USD) 1,376 733 712Overall inflation rate (%) 6,9 5,9 5,5Budget deficit % of GDP 8,0 3,8 4,5

BRIEF MARKET OVERVIEW

In all three countries the agribusiness sector continues to play a major role, accounting for 25-30% of the GDP and 70-80% of the workforce.In 2010 the East African Community (EAC) launched its own common market for goods, labour and capital within the region which includes Rwanda, Burundi and South-Sudan and with a potential market of more than 160 million people. Though the common market is yet to be implemented, the regional GDP increased by 5,8% in 2014 (5,3 % in 2013) compared to a growth rate of 3,2 % for SADC.

Kenya The country is the economic and transport hub of East Africa, and Kenya’s real GDP growth has averaged around 5% for the past several years. Agriculture remains the backbone of the Kenyan economy and including the sub-sectors accounts for more than half of the country’s GDP. The horticultural sub-sector has emerged as the most important with a total production value of USD 940 million (2015) which equivalents 25% of the total agricultural production. Though being one of the largest African exporters of fresh produce, Kenya’s horticulture industry can expand considerably as today’s export only equivalents USD 8 per capita compared to e.g. USD 132 for Egypt.

TanzaniaNot the least due to its vast natural resources and tourism, GDP growth in 2009-2015 was an impressive 6-7% per year. It has largely completed its transition to a market economy, though the government retains a presence in sectors such as banking, ener-gy, and mining.Like Kenya, Tanzania holds great opportunities especially within the horticultural industry, which is the fastest growing within the agricultural sector, recording an annual average growth of 9-12 percent in the past five years. In 2014 the revenue from export of vegetables, spices and flowers amounted to USD 477 million, equivalent to 38% of total agricultural export and up from USD 375 million the year before.

Uganda The country is blessed with significant natural resources including ample fertile land and regular rainfall, and it is thought that the country could feed all of Africa if commercially farmed.During 2014 to 2015 the Uganda shilling depreciated against the dollar, and this, coupled with in-creased public debt, has severely impeded production, especially since Uganda imports most of its capital goods.However, looking ahead the takeoff of a huge public investment program is expected to drive GPD growth back to a level of 6-7 % within a couple of years.Agricultural products supply nearly all of Uganda’s foreign exchange earnings, with coffee alone accounting for about 18% of the country’s exports; but also maize, cotton, tobacco, vanilla and cutflowers contribute significantly to the export revenue.

OPPORTUNITIESThe demand for Danish private sector solutions within the agribusiness sector mainly relates to post-harvest treatment, storage and logistic. Not that the primary production is fully developed, on the contrary, and e.g. innovative technology for both small- and big scale irrigation is highly needed. But looking at the value chain, pay off is more linked to storage and post- harvest han-dling as better management and technology significantly can reduce the amount of waste and increase the value of the produce. And due to the often poor infrastructure in rural areas, solu-tions should preferably be flexible, solar powered and movable.

Thus, business opportunities exist within the following areas (but not exclusively):

• Primary production• Irrigation techniques • Postharvest treatment• Processing (sorting, washing, packaging etc)• Storage incl. cooling

• Logistic• Intake, especially low-tech transportable systems immediate after harvest• Monitoring, market linkage, traceability

• Energy • RE power systems for production, heating and cooling• Optimizing energy consuming processes, i.e. insulation• Utilization of waste products

CHALLENGES• Infrastructure. In most rural areas power has not been installed and many secondary roads are often not accessible during

rainy season.• Identifying the right local partner.• Lack of funding and high local interest rates.• Lack of capacity building and know how. The national advisory-and extension systems are undermanned and services

inadequate.

PARTNERS / PROJECTSaccess2innovation works closely together with a number of local partners including funding institutions, private companies and international CSOs.Organisations like Red Cross, WWF and DanChurchAid are deeply rooted in the local communities and well connected to other stakeholders - including the public sector. Furthermore the CSOs are involved in a number of community development projects which can serve as an entry point for Danish companies, e.g. in Kenya, the local Red Cross supports 60 projects including 15 that work with horticulture. In Uganda ,DanChurchAid is looking for solutions within the grain- and cassava value chains, especially post-harvest handling and storage, as well as a digital safe- and credit assessment systems for rural areas.

POTENTIAL FUNDINGaccess2innovation will be able to support a number of companies for a Go’N’See tour to East Africa, and we expect to support 4-5 partnerships with funding for feasibility studies. Further we can assist companies in obtaining funding from financial institutions like:

• Bestseller Foundation / www.bestsellerfoundation.org • Global Innovation Fund / www.globalinnovation.fund • REEEP (renewable energy) / www.reeep.org • Abi Trust Uganda / www.abi.co.ug• MESPT Kenya / www.mespt.org• PASS Tanzania / www.pass.ac.tz• access2innovation and DIPD’s guideline to funding / http://goo.gl/3PK5bT

For further information and interest, please contact programme manager Henrik Anker-Ladefoged at access2innovation: hal@access2innovation.com or phone +45 2361 1035.

www.access2innovation.com