(Gafsp) Private Sector Window Agribusiness Country Diagnostic
Total Page:16
File Type:pdf, Size:1020Kb
GLOBAL AGRICULTURE AND FOOD SECURITY PROGRAM (GAFSP) PRIVATE SECTOR WINDOW AGRIBUSINESS COUNTRY DIAGNOSTIC – MOZAMBIQUE February 2016 DRAFT PUBLIC Document Submitted by: Cambridge Economic Policy Associates Ltd CONTENTS List of Abbreviations ........................................................................................................ iii Executive summary .......................................................................................................... 6 ES.1 Background ................................................................................................................ 6 ES.2 Phase1: Analyze/identify the most promising sub-sectors and commodities for IFC/GAFSP investment and advisory services ........................................................................ 7 ES.3 Phase 2: Identify specific IFC/GAFSP investment opportunities and related partners .................................................................................................................................. 11 ES.4 Structure of the Report ............................................................................................ 17 1. PHASE 1 Report ....................................................................................................... 18 2. PHASE 2 Report ........................................................................................................... 75 ii LIST OF ABBREVIATIONS AAM Cotton Association of Mozambique ACA African Cashew Alliance ACi African Cashew Initiative ACIANA Commercial and Industrial Association of Nampula ADIPSA Development Assistance for Private Sector Agriculture Initiative ADNAP bNational Fisheries Administration AECF Africa Enterprise Challenge Fund AfDB African Development Bank AGOA African Growth and Opportunity Act AGRA Alliance for a Green Revolution in Africa AIA Agro Industrials Associados (Association of Agribusiness Industries) AICAJU Association of Cashew Manufacturers AMOMIF Associacao Mocambicana de Operadores de Microfinancas AMU Banana association of Mozambique APAMO Cane Growers Association (Associação das Empresas Produtoras de Açúcar de Moçambique) APCM Association of Shrimp Producers ASCA Accumulative Savings and Credit Association BMI Business Monitor International CCOM Caixas Comunitárias de Operadores de Microfinanças CEPAGRI Centre for Promotion of Agriculture CIMSAN Namialo Center for Cotton Seed Research and Multiplication COMESA Common Market for Eastern and Southern Africa COMPACI Competitive African Cotton Initiative CPI Investment Promotion Agency DNA National Distributor of Sugar DNEA National Directorate of Agrarian Extension DNPDR National Directorate for Promotion of Rural Development iii EP Fisheries school ETG Export Trading Group EPA Economic Partnership Agreement FARE Fund for Economic Rehabilitation FAO Food and Agriculture Organisation FBO Farmer-based Organisation FDI Foreign Direct Investment FFP Fisheries Development Fund FONPA National Forum for Cotton Producers GOT Ginning Out-Turn IAM Cotton Institute of Mozambique IDFC International Fertiliser Development Centre IDPPE Institute for development of small-scale fisheries IFAD International Fund for Agricultural Development IFPRI International Food Policy Research Institute IIAM Agrarian Research Institute of Mozambique IIP National institute for fisheries research IITA International Institute of Tropical Agriculture INA The Mozambique Sugar Institute INAQUA Instituto Nacional de Desenvolvimento da Aquacultura (National Institute for Aquaculture Development) INCAJU Cashew Promotion Institute INIP National Institute for Fisheries Inspection IRRI International Rice Research Institute MIC Ministry of Industry and Trade MIM Maize Intensification in Mozambique MINAG Ministry of Agriculture NRDS National Rice Development Strategy PARP Action Plan for the Reduction of Poverty PEDSA Strategic Plan for the Development of the Agricultural Sector PESPA Strategic Plan for the Artisanal Fishing Sub-sector iv PNISA National Agriculture Investment Plan for the Agrarian Sector PROIRRI Mozambique Sustainable Irrigation Development Project PRONEA National Programme for Agricultural Extension PQG Government Five-Year Plan RFSP Rural Finance Support Programme SADC Southern African Development Community SEMOC Sementes de Moçambique SHF Smallholder Farmer SIDA Swedish International Development Cooperation Agency SNP National Planning System UNCDF United Nations Capital Development Fund UNDP United Nations Development Program v EXECUTIVE SUMMARY ES. 1: Background The International Finance Corporation (IFC) manages the Private Sector Window of the Global Agriculture and Food Security Program (GAFSP - PrSW), which is a multilateral mechanism to assist in the implementation of pledges made by the G20 in Pittsburgh, USA in September 2009. GAFSP established a private sector window to provide long and short term loans, credit guarantees, equity and advisory services to support private sector activities for improving agricultural development and food security. Through the blending of IFC finance and GAFSP finance, investments can be financed which are commercially viable, but have temporary higher costs and/or higher risks than the investments which IFC normally finances, and justify a concessional element in the financing package. The objective of the IFC managed private sector window is to address the following: 1. Support and demonstrate new and innovative financing aimed at agribusiness companies and their supply chains, 2. Help increase productivity, improve market access, support innovation and development of new ideas in financing and technology, reduce information asymmetries between small end users of capital and financial institutions, and reduce risks associated with financing small holders/companies in the agribusiness sector 3. Support projects that foster research, development and innovations through entities operating in the ‘last mile’ and projects that can demonstrate higher productivity, lower use of water resources and inputs such as fertilizers As a means to reach this objective, IFC contracted Cambridge Economic Policy Associates (CEPA) to conduct an agribusiness sector diagnostic of Mozambique to i.) analyze/identify the most promising sub-sectors and commodities for IFC/GAFSP investment and advisory services and ii.) identify specific IFC/GAFSP investment opportunities and related partners. This analysis would include competitiveness benchmarking to examine investment and trade patterns and evaluate the competitiveness of specific agri sub-sectors and value chains, as well as considering ―strategic‖ entry points for advisory, namely water/irrigation, women, climate change as well as skills development, mechanization, technology and other potential areas. Particularly important to the diagnostic process would be the country specific national planning work on food security, including CAADP, National Agricultural Investment Program. This report presents the results of a 2 phase assignment, which aimed to identify three to five agribusiness sectors in CDI that have the potential to deliver significant growth and development impacts for CDI as well as investment opportunities for GAFSP PrSW/IFC. Phase 1 reviewed a long list of sectors using a two stage assessment process to identify the priority sectors: 6 i.) Review FAOStat data looking at the top-50 sectors by export value and by production value to identify ten sectors worth looking at in more detail. ii.) Analyse each sector gathering quantitative data and reviewing the sectors’ competitive strengths and weaknesses; main sector participants; and providing an overview of the recent investment activity in the sector. ES.2 Phase1: Analyze/identify the most promising sub-sectors and commodities for IFC/GAFSP investment and advisory services The long-list of sectors were reviewed against five criteria, summarised below. Table ES.2.2: Criteria and indicators used to identify priority sectors Criteria Indicators Development Estimated number of smallholder farmers in sector impact Contribution to food security Economic impact Average value of production of crop over last five years Average value of exports/ imports over last five years Competitiveness Yield per hectare achieved compared to world’s top five producers Change in the share of global exports over time Growth forecast for domestic market Enabling Qualitative view on the quality of the policy environment environment Qualitative view on the level of donor support received Investment Qualitative view on the level of private sector activity in sector potential Qualitative view on the amount of recent investment activity Each indicator was scored between 1 (lowest) to 5; the maximum score is 55. Table ES.2 presents the data and ES.3 summarises the scores. Given the nature of the agribusiness sector in Mozambique, it is necessary to use the desk-based analysis to consider a wide range of sectors. A number of the sectors that have been reviewed are quite small and so there is no data available to assess the sectors. In these cases we have provided a more qualitative review of the sectors. The judgements are summarised in Table ES.3. 7 Table ES.2: Data for long-list sectors Sector Development Economic Competitiveness Enabling Investment Support Ave. value Yield as % Change in Policy Private Investment No. of Ave. daily Ave. value Growth from of exports of export environment activity activity smallholders calories $m forecast donors $m competitors share score score score score