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Mozambique: New Fund to Support Rural Production
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Agencia de Informacao de Mocambique (Maputo)
2 July 2008
Posted to the web 2 July 2008
Maputo
The consultancy company KPMG on Wednesday launched in Maputo the African Enterprise Challenge Fund (AECF), a fund for private sector investment in African agriculture, which is working closely with the Alliance for the Green Revolution in Africa (AGRA), chaired by former UN Secretary-General Kofi Annan.
The AECF has initial capital of 50 million US dollars, provided by the African Development Bank (ADB), the International Fund for Agricultural Development (IFAD), the British and Dutch governments, and the Consultative Group to assist the Poor (CGAP). These sponsors plan to increase their funding in the near future. KPMG Development Advisory Services is the fund manager for the AECF.
The continental launch of the AECF took place in Cape Town on 5 June, and the Fund will operate from three regional hubs (Johannesburg, Nairobi and Accra). Although the AECF says it is open to proposals from all African countries, initially it will focus on just 13, including Mozambique.
KPMG managing partner Julio Garrido told the Maputo meeting that the AECF's mandate is to support private companies operating in the areas of agro-business or rural finance. Projects submitted to the AECF "must have an impact on the rural population", he said.
Garrido wanted to see "a win-win situation where both the rural population and the private companies benefit".
Companies will compete for the available funds. All proposals received will be screened by an independent Investment Committee. Based on past experience of similar funds, Garrido reckoned that perhaps one in ten applications will be successful.
The maximum available from the AECF for a single project is 1.5 million dollars, but it is expected that the average size will be 750,000 dollars. Garrido stressed that these are counterpart funds - any successful applicant must provide at least 50 per cent of the total project cost from its own funds.
The funds will take the form either of grants or of soft loans, and the decision will be made by the Investment Committee.
Garrido said that by 15 July "we hope to have selected the 12 best business ideas, which should submit complete business plans by 5 August".
Mozambique's Minister of Industry and Trade, Antonio Fernando, noted that Mozambican companies are prepared to compete, but often claim they have no capital. So he welcomed the AECF, and told the businessmen present at the ceremony "it can allow you to use resources for your projects, and to structure the Green Revolution to produce more food for our country".
But Fernando warned that the country, and the world, were "going through a difficult phase, with prices rising day after day". The Mozambican government, he said, had taken a series of measures to cushion the impact of soaring world fuel prices (these are basically fiscal measures, temporarily abolishing import duties on diesel and kerosene, and waiving Value Added Tax (VAT) on diesel).
But the government had now run out of cushions, and there should be "no illusions" - the price of petrol and diesel was bound to rise still further. Although the government was able to use its fiscal cushions to freeze the price of diesel, on 20 June the price of petrol rose by 17.3 per cent, and this was now having a serious impact on the Mozambican state.
"In my own ministry the new fuel prices means a reduction of 1,200 litres of fuel a month", said Fernando. "So in the ministry we have to reduce our travel, and use fewer vehicles. No doubt this is also being felt in your companies".
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"The ship is navigating on turbulent seas", said the Minister. "It is our task to ensure that we bring it to port safely".
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| Copyright © 2008 Agencia de Informacao de Mocambique. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here. | |||||||||||||||||||||||||||||
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