Poverty-reduction opportunities in Zimbabwe through the global

market for Natural Products

Gus Le Breton

The Southern African Natural Products Trade Associationwww.phytotradeafrica.com

Gold panning

1. “Green gold” and the commercial opportunities

2. Needs to be legitimised, supported, regulated, certified as environmentally sustainable, sold globally for a premium

PhytoTrade Africa - Southern African Natural Products Trade

Association- Non-profit association, representing producers in

the natural products sector across the region

- 60 members, 8 countries

Insert Map of Members

MARKET BRIEFING

PhytoTrade Africa

- Aiming to develop natural products industry for the benefit of poor rural producers

PhytoTrade Africa

- Aiming to create direct incentives for rural people to invest in sustainable management of their native biodiversity

PhytoTrade Africa - 9 focal plant species

- Supplying natural ingredients - Predominantly for cosmetics

- Also for nutraceutical and herbal medicine markets

• Work only with indigenous, wild-harvested species, found in abundance across the region

• Work in three main areas:

What we do

Product Development

Market developmentMarket development

Supply chain developmentSupply chain development

• Nearly 60 members• From 8 different countries• Currently buying from 18,000 producers a

year (90% women)• Volume of trade was zero in 2002• Growing steadily to around US$1.7

million/year in 2008• Aiming for US$250 million/year by 2020

PhytoTrade Africa by numbers

• Examples

Does it work?

– Very marketable product with huge commercial potential

– Capacity to produce 715,000 MT/yr in Southern Afric a, worth US$960 million, involving 1.3 million househo lds in production (NRI 2005)

– But no history of commercial use

Baobab

• Adansonia digitata– Powdery fruit pulp traditionally

used as a food and a medicine– Widespread and abundant in

many parts of Africa

• PhytoTrade Africa has:– Prepared, submitted and had approved Novel Foods

application for sale into EU (first ever from Afric a)– Invested > US$0.5m in developing new baobab product s– Supported the growth of supplies during the early

stages of market development– Supported production of first organically certified

baobab– Initiated work with Max Havelaar on Fair Trade

standards for baobab – Attracted several major companies into exploring

commercial opportunities from baobab

Baobab

– In 2003, there were no baobab sales. By 2005, households in these villages were earning an averag e income from baobab sales ranging from US$23-US$65

– In 2 years, became the 2 nd biggest source of household income - less than crops, but more than livestock, vegetables and fishing

– Relative importance of baobab is highest amongst th e poorest

Baobab

Case study in Malawi :-5 sites in Dedza and Ntcheu Districts-Average annual household income is US$200

• Sclerocarya birrea:– Plum-like fruit,

very abundant in Southern Africa and with a long history of traditional use

Marula

• The fruit is consumed fresh, is made into juice and is the basis for several alcoholic beverages

• Traditionally an oil from the nut is used as a culinary oil, and also for preserving meat

• Another very marketable product with huge commercial potential

• Capacity to produce 880,000 MT/yr in Southern Africa, worth US$260 million, involving 2.4 million households in production (NRI 2005)

• Only commercial use is of the fruit pulp in the alcoholic beverage “Amarula ”

Marula

• PhytoTrade Africa has:– Invested > US$0.5m in developing the commercial pot ential

of marula oil for the cosmetics industry– Partnered with a French company specialised in gree n lipid

chemistry to develop a patented derivative of marul a oil– Introduced marula oil as a novel and biologically a ctive

cosmetic ingredient– Attained organic certification and working towards Max

Havelaar Fair Trade standards– Marula oil used by the Body Shop, Johnson & Johnson ,

Clarins and several other important cosmetic manufa cturers in Europe

– Annual demand has risen from 500 kg in 2002 to over 30,000 kg in 2008.

Marula

• Case study in Namibia (Wits University)– 3,000 rural households benefit from the sale of

marula kernel– Each earns an extra US$35 a year from this

(equivalent to one month’s income)– Work is flexi-time, home-based, exclusively

managed by women, in agricultural off-season

Marula

Why Natural Products?

1. Global market demand for natural products is robust and steadily growing (+10% growth year on year since early 1990s)

2. We have an inherent competitive advantage in the production of our own indigenous species that we don’t have with exotics

3. It promotes in situ management and conservation of natural vegetation cover, with strong climate change benefits (and possible REDD credits in future?)

4. Indigenous plants are more resilient to the impacts of climate change than exotic cash crops

5. An opportunity that genuinely and selectively favours the poorest of the poor

6. An opportunity that particularly favours women

Relevance to Zimbabwe

1.Zimbabwe has an exceptional resource endowment– Natural resources

– Human resources– Overlap between the two

Ben Bennett, Natural Resources Institute, UK. Feb 2006

Table 1: Current and potential by Product (10 SADC countries) Product Current trade

(US$/yr) Potential trade

(US$/yr) Current

households employed

(gathering only)

Potential households employed

(gathering only)

Baobab 11,203,928 961,358,568 1,165,965 2,640,333 Kigelia 375,563 1,588,050,000 441,125 1,764,500 Marula 425,000 263,001,008 3,475,250 2,436,667 Ximenia 58,500 37,566,884 303,933 1,514,667 Trichelia - 501,665,967 1,144,833 2,289,667 Kalahari Melon 58,500 21,126,226 745,083 1,483,167 Manketti - 19,677,684 197,208 42,597 Parinari - 36,516,431 1,774,250 2,365,667 TOTAL 12,121,491 3,428,962,767 9,247,649 14,537,264

Table 3: Regional share of NP opportunity Country Current trade

(US$/yr) Share (%) Potential trade

(US$/yr) Share (%)

Angola 10,000 0.08 101,822,693 2.97 Botswana 270,508 2.23 51,843,932 1.51 Malawi 1,293,861 10.67 284,603,854 8.30 Mozambique 1,577,235 13.01 589,963,484 17.21 Namibia 670,804 5.53 25,122,552 0.73 RSA 1,366,767 11.28 385,261,436 11.24 Swaziland 6,563 0.05 66,559,211 1.94 Tanzania 3,584,375 29.57 692,266,522 20.19 Zambia 516,887 4.26 170,106,680 4.96 Zimbabwe 2,824,492 23.30 1,061,412,403 30.95 TOTAL 12,121,491 100 3,428,962,767 100

Ben Bennett, Natural Resources Institute, UK. Feb 2006

Table 2: Potential NP’s trade compared with agriculture exports from SADC (US$ 1,000)

Country Tobacco Exports – 2004

Meat (frozen, chilled & fresh) Exports – 2004

Total Agricultural Exports – 2004

Potential Trade in NP’s

Angola 13 0 1,946 101,822 Botswana 66 45,211 52,090 51,843 Malawi 257,964 0 391,618 284,603 Mozambique 32,144 60 123,576 589,963 Namibia 2,747 54,379 236,958 25,122 RSA 120,391 58,767 3,421,223 385,261 Swaziland 1,082 4,444 269,116 66,559 Tanzania 66,088 67 481,325 692,266 Zambia 36,882 4,681 201,196 170,106 Zimbabwe 438,915 106 845,783 1,061,412 Total 956,292 167,715 6,024,831 3,428,962 Source: FAOSTAT

Ben Bennett, Natural Resources Institute, UK. Feb 2006

2. Zimbabwe has the foundations of a robust agro-processing and industrial infrastructure

3. Zimbabwe has strong history of sustainable natural resource use (e.g. CAMPFIRE) and the ability to create an enabling legislative environment for natural products

4. International goodwill will favour our national brand (important for natural products, less so for agricultural commodities)

5. Zimbabwe has a lot of poor people

Way Forward

1.Resuscitate the Zimbabwe Natural Products Working Group, along the lines of Namibia’s Indigenous Plants Task Team (IPTT)

2.Bring together relevant stakeholders to explore the scale of the opportunity

3. Seek some rapid winners and develop them (e.g baobab pulp as food relief) as “proof of concept”

4. Make natural products a national development priority to attract inward investment

5. Invest!

NamibiaNamibia

MalawiMalawi

SwazilandSwaziland

MozambiqueMozambique

Conclusion

• Natural Products are a potent opportunity for Zimbabwe

• Much of the groundwork has already been done

• We are in a position to learn from others and leapfrog forwards

• We should not let this opportunity slip

Thank you!

www.phytotradeafrica.com