K+S supports and benefits of Africa’s Development Dynamics
K+S complemented the presentation of the new report on “Africa's Development Dynamics” of the OECD Development Centre and the African Union in a panel with insights into local practice. K+S's commitment in Uganda is exemplary in creating added value for a potentially large customer base, namely smallholders.
Achieving a productive transformation
Ambassadors, company representatives, employees from ministries and civil society organizations filled the large hall in the “Haus der Wirtschaft” in Berlin, where the main authors Mario Pezzini, OECD Development Centre, and Victor Harison, African Union, presented key findings of the current report on "Africa's Development Dynamics 2019".
At the invitation of the BDI, as one of the sponsors of the sub-Saharan initiative SAFRI, K+S was asked to provide insights into investments and activities in Africa - specifically Uganda. In this way, the scientific study with policy recommendations was given a practical dimension.
K+S has long been active on the African continent as a supplier of plant nutrients. The commitment of K+S in Uganda is unique. The focus is on the customers: In this case, the numerous smallholders, who are facing major challenges. The aim is to offer practical solutions for the greatest challenges facing smallholders and to gradually link them digitally.
Based on several years of local experience, K+S has developed a new business model for smallholders in the East African country. K+S contributes agricultural application know-how and supplies the plant nutrients required. Cooperation with local partners is essential. This requires time and patience and, in return, offers enormous potential both for local people and for business success.
In November K+S and the leading South African fintech company MFS Africa announced that they have partnered in a joint venture to invest in Akorion, an agricultural innovation company in Uganda. The main goal is to further expand Akorion’s digital platform EzyAgric. This technology gives smallholders in Africa significantly better market access and at the same time efficient processes throughout the whole value chain for agricultural products.
K+S Partnerships in Uganda
K+S also holds an interest in Grainpulse Ltd. in Uganda. In summer 2018, K+S invested in the local company Grainpulse Limited near the capital Kampala. Together with Grainpulse, smallholders are to be given better market access and, at the same time, efficient processes along the value chain for agricultural products are to be ensured. Thus, Grainpulse offers plant-specific fertilizer mixtures in smaller quantities, which smallholders can apply in accordance with the recommendations. On the other hand, Grainpulse buys up the harvest from smallholders in order to process it further, possibly enrich it and finally sell it to customers.
K+S had already gained experience in Uganda during its five-year partnership with the Sasakawa Africa Association. The "Growth for Uganda" aid project was primarily concerned with passing on knowledge to the smallholders there. The focus was on cultivation methods, the correct use of agricultural inputs through to the optimal storage of the harvest.
„The result is impressive: In only five years, more than 130,000 smallholders in the region were trained, thus achieving a positive income effect for more than 450,000 people.“
About the latest report of the Development Centre and African Union „Africa's Development Dynamics 2019“:
- Africa's growing markets show great potential for transforming their production systems. Africa's gross domestic product (GDP) has grown by 4.6% annually since 2000, the second fastest rate in the world.
- Many local firms are seizing these opportunities to grow in size and productivity. Africa's private sector is diverse: it includes dynamic "champions", stable companies, small growing businesses, and livelihood-sustaining and informal firms.
- African technology start-ups raised a record USD 1.2 billion in equity in 2018, compared to USD 560 million in 2017.
- Africa must accelerate its productive transformation to create quality jobs for the 29 million Africans who will reach working age each year from now until 2030.
To address the current challenges for productive transformation, the report presents three main paths: 1. Developing strategic clusters of firms, 2. Facilitating regional productive networks e.g. regional norms help smallholders integrate into regional value chains, particular in agriculture, which accounts for 50% of all employment, 3. Enhancing firms’ abilities to thrive in new markets.