Tweet

A new financial architecture for expanding sustainable energy and agribusiness

Guest post by: Norbert Knoll von Dornhoff

Article Overview: Many of the impacts unavoidably to come over us in the next decades until stabilized, will fall most heavily on the poorest and most vulnerable communities in developing Countries with the least ability to adapt. Technical and financial assistance will be needed by particularly vulnerable, low-income developing countries to meet their mounting adaption needsKyoto protocol, the declarations as contained in the Millennium Promise (Millennium Development Goals) of the United Nations, the G 8, G 20 and so on have admittedly increased the awareness of politicians that our planet is in danger by Climate Change, Global Economic Crises and political instability. However the practical results were up to date more than poor. We are today from the Millennium Promises more miles away than five or six years ago, and the economic crisis of 2008 is

A new financial architecture for expanding sustainable energy and agribusiness

Agribusiness: Key determinant of econimic growth and poverty reduction

A renewed focus on agribusiness is an important complementary strategy to the existing approaches being followed for the structural transformation, technological upgrading and economic diversification of African economies. Agribusiness is the key determinant of overall economic growth and poverty reduction in most countries of Sub-Saharan Africa, as it harnesses the critical linkages between agriculture, industry and services. The accelerated development of agribusiness will benefit a large majority of the African population - it will be "people-oriented"because it will enhance the well-being of both producers and consumers, and generate employment, income and food security.

African states, through the African Union, have pledged to invest a minimum of 10 percent of budgetary resources in the agriculturalsector, and the G-8, meeting in L'Aquila, Italy in 2009 renewed the commitment of the donor community to the Comprehensive Africa Agricultural Development Programme. This Programme has set aannual agricultural growth target of 6 per cent to achieve the Millennium Development Goal of halving poverty by 2015.



Principal areas of development interventions

This high rate of agricultural growth would provide a strongplatform for developing agribusiness value chains, and raising productivity in all of the individual links in these chains. Following Kandeh K. Yumkella, General Director of UNIDO, stated in his deliberations: This is a formidable challenge and will involve development interventions in three principal areas:

First, improving agricultural productivity through improved

industrial inputs. This is the first element of agribusiness.

Second, increasing the industrial processing of agricultural raw

materials and food products.

Third, strengthening industrial production of processing

machinery, equipment, tools and packaging materials, and

improving the storage and transport infrastructure.

Such a strategy focusing on accelerating agribusiness development requires a strong emphasis on eight critical pillars of growth consistent with the Action Plan for the Accelerated Industrial Development of Africa. These are:

1. Enhancing agricultural growth for agribusiness;

2. Upgrading value chains in agribusiness;

3. Targeting commodities and producers for value addition and

social inclusion;

4. Strengthening technological effort, innovation capacity and

capacity building;

5. Stimulating private enterprise development and investment;

6. Facilitating innovative financing for agribusinesses;

7. Improving agro-industrial infrastructure and access to

sustainable energy; and

8. Exploiting local, regional and international demand.

A strengthening of the eight key pillars in the agrifood system will help to unlock the enormous potential of agro-industries to contribute to the continent's long-term prosperity.

Indeed this is already happening, and several examples of asuccessful development of agribusiness value chains in Africa come to mind. These include:

• Fish in Uganda;

• Organic coffee and cocoa in Uganda;

• Fruit and vegetables in Kenya;

• Pineapple in Ghana;

• Dairy and cassava products in Kenya, Uganda and Zambia;

• Furniture in South Africa;

• Wine in South Africa;

• Cotton garments in Mauritius and Madagascar; and

• Biofuels in a number of countries

• Waste to Energy Technologies, e.g. Gas Plasma Plants, Low Temperature Conversion of organic waste from farmsin nearly all African Countries.

Non-fossil alternatives at remarkably low cost

We have good reasons to assume that in the longer term non-fossil alternatives will be a fast growing fraction of the world's energy supply. African Countries will play a deciding role in implementing and operating solar energy plants. Africa will also come to pre-eminence in generating biofuels, such as ethanol, derived not from cane and food crops, but from inedible grasses, such as switch grass and woody plants on lands that are not suitable for food crops. Technologies for the conversion of cellosic ethanol are since more than 30 years available and will be used on a commercial basis.

Climate change, escape from poverty, development of economy, particularly of Micro- and Small enterprises in rural areas are closely interlinked. We believe that these burdens are surmountble at remarkably low cost and that sufficient funds can be made available within a relatively short time period. Food production can be increased, technologies for generating energy from renewable sources, such as sun, wind, water, energy from all kinds of waste (e.g.Gas Plasma Plants, LTC - Low Temperature Conversion of organic waste) can be used and it can happen rapidly if the projects can be financed and implemented. Low cost carbon management will also be in African Countries an important contribution to avoid the doubling of CO2. Examples are the hybrid automobiles to be promoted with financial incentives in African Cities and carbon capture and sequestration. Experts attending the Summit will underastand was is meant.

In most cases the lack of finance is the limiting factor. THE POOR KNOW WHAT TO DO, BUT ARE TOO POOR TO DO IT, said Prof.Jeffrey Sachs, the adviser of the UN General Secretary forthe Millennium Promise.



Transition to sustainable energy: 1% of the rich Countries‘ income

In order to resolve the limiting factor of FINANCE, we shouldfocus on the following actions:

1. Prof.Jeffrey Sachs, Director of the Earth Institute, poposed a new financial architecture for sustainable development. The developing Countries also in Africa have been toldtimeand again to plan to acieve the MillenniuDevelopment Goals, only to find, that the promised international support is not available.

Taking the experience from the UN administrated Global Fund, we should plan to simplyfy the global aid architecure for Africa and make it more transparent, science based, and responsive to the level of actual needs. This can be accomplished by establishing a few high-level funds aiming at critical dimensions of the Millennium Promises, and concentrating our aid effords through those funds rather than a plethora of bilateral programs. Some funds are already existing and need to be expanded, others need to be started.

The financial needs world wide for meeting our Millennium Promises have been calculated by the Earth institute of Prof. Jeffrey Sachs (see table 13.2).The transition to sustainable energy will likely require no more than 1 percent of rich-world income and less than that in low-income Countries.

2. WUSME the World Union of Small- and Medium Enterprises recommended the foundation or expansion of the following funds:

• Global Fund for an African Green Revolution

• Global Infrastructure Fund

• Global Fund for Crises Prevention and Development of Micro- Small and Medium Enterprises in Africa

• Global Fund for energy production from renewable sources, sun, water, wind, waste to energy, energy from biomass.

The main sources for financing these funds shall be:

• International Finance Corporation (IFC) - World Bank

The goal of IFC's work is to support the growth of the private sector, giving men and women across Africa the opportunity to escape poverty and improve their lives. IFC's products and services are especially important during rocky times for the global economy, when Africa cannot rely on increasing amounts of foreign aid or investment. IFC'S own investments in Africa are strong, however, reaching $1.38 billion for 55 projects in 25 countries in FY08. IFC's advisory services programs are active in 30 countries in sub-Saharan Africa. These programs support the creation of better business environments, promote environmental and social sustainability, help facilitate large infrastructure projects, and work to expand access to finance for smaller businesses.

• AFRICAN UNION through the African States

• European Union - EIB - European Investment Bank

• OPEC

• Financial Transaction Tax ("Tobin Tax") and Bank Tax

• A tax on crude oil production per ton.

• Private Sponsors, e.g. multinational concerns, private Billionaires Charity Organisations.

Martin Luther King had - as we know- no nightmare, he had a dream and his dream came true. The African dream to escape the poverty trap, to successfully fight diseases, to improve the economy and to be a valuable partner with happy African families for international tourism and economy world wide, this dream will come true, it must come true.

Related Articles
  ENTERPRISE ARCHITECTURE THE NEW LANGUAGE OF MANAGEMENT
  Moving Forward: International Financial Institutions
  Create your own masterpiece
  Brand Building An Architectural View
  Creating a Megatrend of Human Sustainability
  WUSME: Towards a new strategy for crises prevention and to create more SMEs and jobs
  Examples of Sustainable Development
  Poverty reduction by trade and production capacity building in less privileged economies
  Doing Business with the World - The New Role of Corporate Leadership in Global Development
  Earth Day 2010: Life and Death Decisions for Business
  Economic Growth, Sustainable Development, and the Millennium Development Goals (MDGs)
  Green Memes and Schools
  Green Shoots?
  At Target Everyday is Earth Day
  Introduction: Fiscal Dimensions of Sustainable Development
  Is Your Job Recession-Proof?
  The most damaging eco-myth
  Millennium Development Goals need sound SMEs = More Jobs = Less Poverty
  Sustaining Conversion to Sustainable Energy Sources
  SME's - do you want business from government?

Article Tags: Africa, agribusiness, development sme, energy, enterprises, financing, fund, sustainable, union, world, WUSME



Related Forum Posts
Re: Government Grants; sources and experiences - Eventually when I was getting the impression I wont find any place discussing about grants I came across this community. For me friends the idea of getting grants is very vague though this much I understand its a financial aid for the business which I would anyways like to get. Sadly I do not think there are many openings in the place I live to get such grants so I was looking forward to read the experiences of others or the suggestions of others who might help me in this aspect. I might consider expanding my business to other countries so do I stand a chance to get such grants? There are many such questions in my mind which I would place here gradually. At least I have got going somewhere.
Re: What Businesses to Bail Out? - Very true - I agree that only certain businesses will be "rescued". Sad for the American public that its the companies who are billions+ in trouble. It has certainly been a bad week in the US financial world. I was even watching special coverage of an overseas financial market last night. Lots of ripples through the financial community. Its sad that nothing is in place to actual oversee and truly regulate the financial industry. To many people refuse to be accountable and they leave the rest of us holding the bag. Shri
Re: Hello I am a franchise expert - Thanks for the interest. I am located in Alberta and BC. There is an opportunity right now in the elder care sector. I represent the number one elder care franchise in the USA. We have over 200 franchisees in the USA and now are looking to grow in Canada. We will sell 23 units in Alberta and BC this year. I am working the master franchisor as we speak to find qualified Candidates. We will be expanding into Ontario by fall of 2011. I represent many franchises but choose to focus my energy on companies that are poised for success and looking to expand into Canada. I've been looking through the forums and see there is quite a number of posts about franchising. I look forward to reading more and getting in contact with anyone interested in franchises.
Higher success rate with strong finance - It seems that many entrepreneurs with a strong financial background succeed more often than those who are not quite so savvy in understanding financial statements, cash flow, etc.
How to Stay Motivated - There are times when you are up and times when you are down. As a life coach, so often my clients try to push through the times that they are down. They try to motivate themselves. Unfortunately this extends the period of time that they feel unmotivated. When you resist where you are, you amplify it and make it worse. They key is to relax into it and ride the waves of energy and they rise and fall. There will be times when you are hot and times when you are not. Times of great creativity and energy and times of no inspiration and you feel totally blah. If you will honor the times of blah and just rest, inspiration will come back sooner. If you panic and try to GET MOTIVATED, then you will just get more frustrated. What’s the moral of the story? Chill out, relax and rest when the body is going in that direction. Don’t worry. The waves of energy will return and you will soon be riding high again.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Is the Media to blame for losses in super?

Life is a Balancing Act!

What is an Adaptive Organization

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.