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This week, TERRIFIC HEADLINES commences a five part series under the caption: INVESTMENT AND MARKET OPPORTUNITIES IN AFRICA’S INDIGENOUS STIMULANTS as part of our contributions to the growth of local industries and initiatives. Stimulants are substances that increase central nervous system activities in the human body. Most of these stimulants contain chemicals of the methylxanthine group. They increase alertness, heart rates and energy levels in man. Stimulants are also widely used because they produce a sense of euphoria that most people crave for. It comes in the form of a lecture delivered by a patriotic Nigeria, Prof. Tunde Adeniran who has served the nation in several capacities. The focus this week is on KOLA NUTS.

A few weeks ago when I received a letter from my good friend and brother, Chief Audu Ogbeh (The Chief Executive Officer of Benagro Ltd and Executive Chairman of ICAIS-3), my immediate reaction was why me? For someone who, as a child, took to flight, a quick dialogue with his legs, on sighting kolanuts or bitter kolas due to some frightening myth and superstition, an address on the positive and enriching essence of such items should not be his lot. Then it occurred to me that such information was never to his knowledge and that some of the organizers were probably aware of my addiction to the usage of Moringa leaves which I supply to friends and associates from my backyard.

Moreover, as an investment enthusiast and a former envoy of the Federal Republic’ of Nigeria who had been relatively effective in the promotion of Foreign Direct Investment (FDI) and external marketing of Nigerian products, such a topic should be of interest. This should be more so in view of decades of enlightenment that had removed ritualistic misconceptions and ignorance regarding the nature, immediate usefulness and potential value of specific agricultural produce.

Introduction:  Today Africa is fast emerging as the new investment destination for most investors. Despite the focus by some on the unstable operating business environment in most African countries, investors are still being drawn to the African continent. This is due to the high returns on business investments in Africa when compared to returns on investments in the developed economies. Because the African continent has not made full use of the vast human and material resources vested in it by nature, there is a huge investment vacuum to be filled by any brave and adventurous entrepreneur. The case of one of the richest men in the world, Nigeria’s Aliko Dangote, is a vivid example. What Dangote has done is simple. He has dared to thread where others are scared to go. In human endeavor, high risk usually accompanies high reward after a proper cost-benefit analysis:

At a time when Europeans and North Americans shied away from investing In Nigeria’s telecoms industry, MTN came to Nigeria and has been able to use their phenomenal returns on their investment in Nigeria to grow their businesses all over the continent. From this and related ventures, African leaders are beginning to realize (albeit slowly) that their grip on power can o~.ly be sustained if they give their people the basics. This is the only way they can stave off agitation that usually threatens their positions, In this regard, the continent’s leaders seem to be moving away from state-controlled enterprises to giving those in the private sector the opportunity to control a big chunk of the economy. This new way of thinking has continued to create opportunities for people in the private sector to take advantage of the huge untapped potential/market that Africa possesses.

Agriculture and a Case for Diversification: The bane of most economies in Africa has been the over-dependence on one major product as the source of revenue. For example, the discovery of oil in commercial quantity in Nigeria significantly distorted the structure of the economy by relegating agricultural products to the background. During the First Republic, the bulk of the resources accruing, to the regions came from agricultural products. There were groundnuts in the· North, cocoa in the West and palm oil in the East. But the curse of the crude oil took attention away from agriculture and elevated crude oil exploitation as the main source of revenue. However, the vicissitudes in the international crude oil marketand the advanced research by the US in the search for alternative fuel once again points to the fact that the future of African economies may lie in agriculture.

Agriculture certainly promises to be the next frontier for good investment returns for investors in Africa. Endowed by nature, there are four things that give Africa (especially sub-Saharan Africa) a huge advantage in agriculture. They include:

  • Large uncultivated arable land.
  • Large “unemployed labor force.
  • Adequate sunshine/heat all year round.
  • Abundant rainfall especially in tropical low lands.
  • Large untapped internal market that can be protected by government trade policies.
  • Possibilities of export.

Investment Opportunities in Africa’s Indigenous Stimulants:  One of the potential investment opportunities lies in AFRICA’S INDIGENOUS STIMULANTS. Stimulants are substances that increase central nervous system activities in the human body. Most of these stimulants contain chemicals of the methylxanthine group. They increase alertness, heart rates and energy levels in man. Stimulants are also widely used because they produce a sense of euphoria that most people crave for. Examples of naturally occurring stimulants in Africa include the following:

  • Khat (Catha edulis)
  • Kola Nut (Cola nitida and Cola acuminate)
  • Bitter Kola (Garcinia kola)
  • Coffee (Coffeaarabica and Coffeacanephora)
  • Tobacco [Nicotianatabacum)
  • Cocoa (Theobroma cacao)
  • MoringaOleifeira

The stimulants listed above can be grown with comparative advantage in parts of Africa especially sub-Saharan parts of the continent without recourse to irrigation or heavy use of fertilizers. The stimulant producing plants or trees are also not foreign to our culture in different parts of Africa. The stimulants listed above or their extracts are used in the following industries:

  • Food and beverage industry.
  • Pharmaceutical industry.
  • Cosmetics industry.

Apart from’ these industries, some of the stimulants are used’ in their natural form for recreational purposes while others are used in Africa for celebrating occasions and as symbols of tradition. Bitter kola and kolanuts are used lavishly at weddings, traditional ceremonies, community festivals, etc, with varying appeals and symbolism in diverse settings and to various cultural groups.

KHAT (Catha edulis): Khat is predominantly grown in the horn of Africa and recently in Kenya. It’s use as a social or recreational product in, countries like Ethiopia dates back over a thousand years. The leaves are chewed for the stimulant effect enjoyed by the users. Khat leaves contain an amphetamine-like substance Cathinone. This explains its physiological effect as a substance that also causes loss of appetite while giving a feeling of euphoria. Although it is legally used in some countries like Ethiopia, Yemen, Sudan and Ethiopia, Khat has been put on the controlled substances list in countries like Canada, Germany and the USA. Most of these countries frown on its potential for abuse. For now there exists only a relatively small world market for Khat. However work can be done to produce herbal drinks, which contains Khatleaves. This can be marketed for sale in the WEIGHT LOSS INDUSTRY because of the anorectic effects of Khat. Khat can also be usedas an ingredient of ENERGY DRINKS. The global ENERGY DRINKS market today is worth approximately $40.00 billion.

 KOLA NUT (Cola nitida): As I mentioned earlier on, kolanuts, which are grown predominantly in West Africa, have traditional use in most African countries as a symbol of peace and friendship. They are also used for recreational purposes to combat fatigue, increase alertness and to suppress hunger. Kola nuts have also been exported to Europe and North America for use in pharmaceutical and food industries. In the beverage industry as a flavoring ingredient of soft drinks (e.g. Coke and Pepsi), and also for caffeine production for use in the pharmaceutical industry. Kolanuts are also used in the production of’ wine and chocolates. The caffeine content of Kolanuts ranges from 2.0-3.5% compared to coffee bean which has a caffeine content of 0.9-1.7%. Due to its high caffeine content this particular crop can be processed and placed as an alternative to coffee for use as a hot drink.

Most people drink coffee for the stimulant effects of its caffeine content. With its higher caffeine content, processing Kola nuts as a substitute for coffee represents a huge market opportunity. With a total Global market size of approximately $70.00 billion and an export component of about $23.5 billion in the coffee bean trade, Kolanuts can be positioned to tap into the coffee market. However a lot of marketing/promotion would have to be, done to position Kola as an alternative to Coffee. This can however be achieved by touting its higher caffeine content. About 1-2 teaspoons of dry pulverized Kolanuts can be dissolved in hot water as an alternative to hot coffee drinks. Because of its higher caffeine content the stimulant effect achieved through coffee drinking can also be enjoyed using Kola nuts.

With higher investment in Kola nut production, there is great promise in such investments to create thousands of jobs for African countries since the coffee trade presently employs about 125 million people worldwide. Certainly, with a liberal supply of water and fertile soil Kolanut trees start to fruit in 5 years. However, recent developments have thrown up a variety that fruits in 3 years using vegetative propagation techniques.  By-products of Kola harvests include the Kola pod husk which can be used in liquid soap production and as a 50% substitute for maize in the production of feed formula for poultry. Most Kola trees (the two economically important varieties being kola nitridata and kola acuminata), if well maintained, will fruit for 50-80 years.

This piece was graciously released for publication in public and national interest bya patriot,  Prof. Tunde Adeniran, KJW, OFR. It forms part of a lecture delivered by the erudite scholar at IITA, Ibadan on October 22, 2013.