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FTInsight Feb 2016

  • Text
  • Koroma
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  • Leone
  • Cassava
  • Ebola
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  • Agriculture
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  • Freetown
The only magazine for those who do business in Sierra Leone feature: JS Koroma of Union Trust Bank The Mooc revolution 4 investment opportunities Rebecca Perlman on renewed opportunities plus polls, surveys and a look at the start up experience in Sierra Leone

Early Years in Business

Early Years in Business Special Segment Breaking boundaries in the cassava market By Alinah Kallon Rhoda Akinola’s business is all about cassava and its by-products. She started the Green Diamond Cassava Farmers Initiative (GDFCI) after attending a conference in Nigeria in 2006, where she was intrigued to learn about the huge potential of cassava. “I gained a wealth of knowledge about cassava and how valuable it can be to a range of industries including the textile, pharmaceutical and food sectors,” Rhoda says. “I also learned how cassava can be used to create sustainable wealth for myself and my community.” Rhoda went on to translate this knowledge into reality by setting up a Sierra Leonean based company which processes and markets cassava products including cassava flour, odorless foo foo, composite flour and gari. By applying innovative methods, such as providing mobile cassava processing machines in strategic locations across Sierra Leone and training farmers in their use, the firm has significantly improved productivity for farmers and the quality of their products. GDFCI’s business model has attracted widespread support. For example, the First Lady of Sierra Leone, Sia Nyama Koroma, donated 50 acres of land in Kono, Sierra Leone’s diamond-district. The African Foundation for Development Sierra Leone (AFFORD-SL), through its Business Bomba Competition, provided Le 25 million (approximately US00) of prize money to GDFCI. Business Bomba is a national business competition supported by the Ministry of Trade and Industry. The recent Ebola outbreak created an unusual expansion in the business, allowing it to create 150 jobs. During the outbreak, rice, Sierra Leone’s staple food, rose in price by about 20%. This led to increased consumption of Sierra Leone’s second staple food, cassava. The majority of the jobs created are for farmers based in the South of Sierra Leone - Moyamba and Pujehun. In addition to receiving a stable income, the farmers also benefit from training to improve efficiency and productivity, particularly in gari processing. According to Rhoda, these jobs provided the farmers with flexible working hours while bringing in a steady stream of income at a time when job and income losses were widespread across the country, due to the Ebola crisis. “The farmers have a contract that is more beneficial to them than ever before,” Rhoda says. “In the past, these cassava farmers faced huge post-harvest losses because there was no proper system in place to organise interrelated activities from the moment of harvest through to cassava processing and getting the products to the consumers.” Kadie Sesay was among GDCFI’s contracted farmers; she has also received training as a gari processor. “The training I received from GDCFI has been very useful for me,” Kadi says. “Before, I was just a basic cassava farmer and local gari processor. Now I have relevant skills to process quality gari and transform the cassava into many other products that will help the future expansion of my business.” GDCFI’s growth strategy includes market diversification, which will soon see it enter the export market. The company has already established trade links in the Gambia where it will export gari and cassava flour. It is also planning to construct a cassava processing factory at Waterloo, on the outskirts of Freetown, for cassava processing and the training of processors and marketers through a partnership with World Vision, Sierra Leone Chamber for Agribusiness and International Institute of Tropical Agriculture. As part of its longer term growth strategy, GDFCI intends to establish links with the pharmaceutical and textile industries that use cassava in their production. The Democratic Republic of Congo is the largest consumer of cassava in SSA, followed by Nigeria. Nineteen million hectares of cassava were planted worldwide in 2007, with about 63% in Africa. Apart from food, cassava is very versatile and its derivatives and starch are applicable in many types of products such as foods, confectionery, sweeteners, glues, plywood, textiles, paper, biodegradable products, monosodium glutamate, and drugs. Cassava chips and pellets are used in animal feed and alcohol production. According to the FAO, cassava has the potential to replace 400 000 metric tonnes of wheaten f lour in CARICOM countries; substitute up to 30% of the corn in poultry rations as well as a portion of other animal feeds and contribute to a reduction of the Food Import Bill by approximately 5%. Nigeria is currently the largest producer of cassava in the world with an annual output of over 34 million tonnes of tuberous roots. Cassava production has been increasing for the past 20 or more years in area cultivated and in yield per hectare. Cassava and its place in the World Cassava is produced mostly by smallholders on marginal or submarginal lands of the humid and subhumid tropics. Such smallholder agricultural systems as well as other aspects of its production and use often create problems, including: unreliability of supply, uneven quality of products, low producer prices, and an often costly marketing structure. The smallholder production system also implies that producers cannot bear much of the risk associated with development of new products and markets. Thus the challenge is to create a strategy that affects production, processing and marketing in such a way that it provides an array of high quality products at reasonable prices for the consumer, while still returning a good profit for the producers without requiring them to assume the largest part of the development risk. Strengths of cassava Cassava can grow and produce dependable yields in places where cereals and other crops will not grow or produce well. It can tolerate drought and can be grown on soils with low nutrient capacity, but responds well to irrigation or higher rainfall conditions, and to use of fertilizers. Cassava is highly flexible in its management requirements, and has the potential of high-energy production per unit area of land. Once thought to be resistant to pests and diseases, the crop can be improved genetically to increase its resistance to damage from serious pests and diseases. Cassava yields can be quite high, as high as 25 to 40 t/ha, although national yields are often well below these levels. World average is about 10 t/ha. The crop has long been used as a famine reserve and food security crop. Because cassava has no definite maturation point, harvest may be delayed until market, processing or other conditions are more favourable; this flexibility means cassava may be field stored for several months or more. Although it was long considered a smallholder subsistence crop, cassava can be grown in large plantations or in more favourable conditions to produce raw materials for industrial processing. Cassava starch has some unique characteristics that favour its use in specialised market niches. In general, cassava has an ability to enter diverse markets. The Global Cassava Development Strategy and Implementation Plan (FAO/IFAD, 2001) FT Insight 21 As in the case with numerous businesses seeking expansion in Sierra Leone, access to finance is a major constraint. Cassava processing is labour intensive and if the company is to meet the demands of the local and international markets and succeed in the face of stiff competition, it needs the right machinery for processing and production. “There is wealth in cassava and if we explore it, it will be able to enhance food security in the nation and will create employment for thousands of people,” Rhoda says. www.ftinsight.net

James Koroma Union Trust Bank Leone Cassava Ebola Insight Sector Agriculture Opportunities Economic Investors Freetown

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James Koroma Union Trust Bank Leone Cassava Ebola Insight Sector Agriculture Opportunities Economic Investors Freetown