Contents

1. Introduction
   1.1 Project Overview
   1.2 Background
   1.2.1 Population Status in Africa
   1.2.2 Current Status of Grain Production in Africa
   1.3 Agricultural Issues in Africa
2. Project Analysis
   2.1 Issues in Cameroon’s fertilizer market
   2.2 Analysis of Basic Conditions in Cameroon
   2.2.1 Excellent Conditions for Economic Development
   2.2.2 Advantages of Natural Conditions
   2.2.3 Open Investment Environment
   2.3 Background of Western Cameroon
   2.4 Selection of Fertilizer–Urea
3. The Investment Plan
   3.1 Source Selection
   3.2 Cooperation and Incentives —— Four “sharing” model
4. Investment Estimation and Source
   4.1 Investment Scale
   4.1.1 Investment Structure
   4.1.2 China-Africa Development Fund
5. Economic Benefit Index
   5.1 Cost Evaluation of unit of Urea
   5.2 Income Statement
   5.3 Project Appraisal
6. Social Impact of Investment

1. Introduction

1.1 Project Overview

Name: Exporting 5000 tons Fertilizer (Urea) to Cameroon

Location: Western Cameroon

Expectation:

• Revenue: 13.5 million Yuan/ year
• Net profit: 1.862 million Yuan/ year

Social Returns:

• Environment: Improving the quality of soil, increases the content of soil nutrients, reduces the waste of resources and environmental pollution, and realizes the sustainable development of resources.
• Society: In terms of population, the significant increase in agricultural productivity reduces hunger rates and ultimately increase the quantity and quality of the labor force.
  Economically, the use of fertilizers increases the individual income in Cameroon, reduces poverty rates thus, leads to overall economic growth of Cameroon; For employment, this project offers more job opportunities to decrease unemployment rate, and promotes social stability and sustainable development.
• Governance: It has truly realized the sharing of resources between China and Africa, promoted the common development of the two countries, and achieved a win-win situation in cooperation.

1.2 Background

As we all know, food is the basis for human survival. But since the 1970s, Africa, which was colonized later, was tagged as “famine land” and according to data released by the Food and Agriculture Organization of United Nations, FAO, the number of populations who don`t have access to enough food in Africa is higher than any other area. In 1960, there were 28 countries with grain shortage, severe shortage and extreme shortage in Africa, and 25 countries with grain self-sufficient. According to the data released by FAO, in 1981, 45 of 55 countries and regions in Africa had a grain self-sufficient rate of less than 95% and a total non-self-sufficient rate of about 60%. Only 10 of African countries, included Chad, Ethiopia, Niger, Rwanda, Sudan, Uganda, Burkina Faso, South Africa, Namibia and Zimbabwe are basically self-sufficient in food. Food shortage problems in Africa have been around for a long time that quite common and serious. At present, 1/5 people in sub-Saharan Africa is malnourished and 237 million people are in a state of chronic malnutrition. The level of the Food and Agriculture Organization is generally low, the ability to withstand disasters is insufficient, and the output of food and the number of lives span have fallen sharply.[1] 

At the same time, under the framework of China-Africa cooperation, China’s development experience is also helping Africa to improve its own grain production capacity and agricultural technology. The 2018 Beijing summit of the Forum on China-Africa Cooperation (FOCAC) announced that it will support Africa in achieving food security by 2030 and will work with Africa to formulate and implement China-Africa cooperation plans and action plans for agricultural modernization. For this purpose, China will implement 50 agricultural assistance projects and provide 1 billion Yuan in emergency humanitarian food assistance to affected countries in Africa. Gabriele Rugalema, representative of the FAO in Kenya, highly appreciates China’s important role in helping Africa achieve food security, saying that these measures will not only enhance the self-sufficiency of food in the African region, but also help local agriculture to promote employment and thus improve the living standards of Africans.

1.2.1 Population Status in Africa

The African population is always in a state of rapid growth with the increase from 140 million in 1900 to 1 billion in 2010. According to the projections from the United Nations, Africa’s population will increase to 2.5 billion by 2050, accounting for 1/4 of the world’s population (9.8 billion), and to more than 4 billion in 2100, accounting for 1/3 of the world’s total population(11.2 billion). So it is urgent to significantly increase agricultural productivity to meet the needs of a rapidly growing population.[2]

Figure 1  Population Comparison between Africa and， World

Data source：《World Population Prospects 2019》

1.2.2 Current Status of Grain Production in Africa

Africa has a low annual per head grain output, and its food supply has been heavily dependent on importing for a long time. Because the level of development and society situation in Africa in 2018 are similar to those in India in 1990, providing the data of India, one of the countries with the highest global hunger index[3] in the world, as a reference. India’s annual per head grain output is 180-200 kg per year, which is slightly lower than China’s “three-year difficult period”[4]. It mainly relies on milk, eggs and sugar to supplement insufficient calorie intake. <Global Hunger Index 2018-Africa profile >[5] shows that with the exception of the Central African Republic and Chad, the GHI of all African countries has fallen below 40, and the average hunger index is about 29.4, higher than India’s level in 1990. But Africa’s per head food production is only about 150 kilograms, 20% lower than India’s in 1990. The key factor that makes Africa’s hunger index lower than that of India at the same time of development is imported food.

Table 1  Comparison of the food situation between India and Africa in 1990 and 2018 

According to the analysis of World Bank Open Data

	The year of 1990	The year of 1990	The year of 2018	The year of 2018
	Hunger Index	Per head Output of Grain	Hunger Index	Per head Output of Grain
India	33.73	180 kilo	31.1	200 kilo
Africa			29.4	150 kilo

Data source: World Bank Open Data

According to previous estimates, the African population will reach 2.5 billion in 2050, and supposing that the per head food consumption in Africa will be similar to that in India today. Then, Africa’s food demand will reach 500 million tons, while Africa’s current grain output is only 160 million tons. As India’s grain output has increased from 160 million tons to 260 million tons since 1990, we assume that the growth rate will be maintained and the food gap in Africa will reach to 240 million tons after 25-30 years.

Table 2  Comparison of the grain output between India and Africa in 1990,2018 and 2050

Grain Output（100 million tons）

	1990	2018	2050
India	1.6	2.6
Africa		1.6	2.6 / 5

Data source: World Bank Open Data

Although the potential for increasing global food production which can be sufficient to cope with the population boom in Africa, relying on imported food is not a foundational solution to the problem. It will be extremely horrible if the degree of food external dependence of 3 billion people reaches 50%. To put that in perspective: if rapid economic growth in China, India, Southeast Asia continues to increase the consumption of meat and milk , North and South America originally exported to Africa food land into feed crops; if there is war in Africa or the world, it will affect the shipping of international commodities. By that time, Africa, with a population of 2.5 billion, will have the largest  human starvation history. Therefore, it will be very important for African countries to master the absolute security of food supply while their population is skyrocketing.

1.3 Agricultural Issues in Africa

As far as the natural conditions of food production are concerned, Africa especially sub-Saharan Africa, has excellent light and heat conditions and the huge potential resources of arable land, also contains abundant water resources which about 2/5 hydraulic resources in the world. However, the unique production conditions did not guarantee the most basic food needs of local residents. It can be seen that Africa faces the problem of backward food production while having great potential for food production. —–More than 80% of the land fertility have decreased, grassland overgrazing and deforestation caused soil desertification and soil erosion, and the supply of agricultural inputs has been in a state of serious shortage, farmers lack of improved seeds, pesticides, agricultural machinery and fertilizers. To a large extent, the sustainable and efficient development of agriculture is restricted by these shortage that the use of fertilizer is really low, which is only 1% of the world average. 

At the same time, Africa is currently the region with the highest growth rate of urbanization in the world and the level of agricultural production is similar to that of China 60 to 70 years ago. The demand for food in the regions is rising to provide a broad space for agrochemical inputs. And with the further development of China-Africa cooperation, Africa welcomes Chinese investment in local fertilizers and other agricultural markets, which can not only use the local rich resource of minerals, oil and gas effectively, also help local farmers to promote the scientific use of agricultural products in order to improve local agricultural production efficiency.[6] According to Peter Heffernan, head of fertilizer and chemicals research at the British Commodity Research Institute (CRU), the world’s leading authoritative analysis agency, “the total fertilizer consumption in East and West Africa may increase by three to four times over the next 10 to 15 years. ” And he expects consumption in West Africa to increase more than double, from 1.9 million tons to 4.6 million tons by 2030. Together with the International Fertilizer Association (IFA)[7], investment in the global fertilizer industry will rise sharply over the next five years, and global fertilizer supply is likely to exceed demand, thus lowering prices and helping the African region to purchase fertilizer.

2. Project Analysis

2.1 Issues in Cameroon’s fertilizer market

• Low production & Relying on imports.

Cameroon is known as the “Central African granary”. However, the agricultural “four evils” refer to crop smothering, diseases, pests and birds are very harmful. The use of pesticides and fertilizers is still in its infancy, and domestic production is extremely low that mostly rely on import. According to Cameroonian officials, the use of local chemical fertilizers is only 15 kg per hectare, while other African countries, such as Kenya, are 50 kg and France is 200 kg per hectare. At the same time, the financial resources of the farmers are limited, and they do not have the experience of using and managing the agriculture inputs.

• Insufficient supply & High price 

The annual demand for fertilizers in Cameroon is about 500,000 tons, and the imported fertilizer is only 100,000 to 110,000 tons[8]. At present, there are only four fertilizer importers in the local market, and the supply is seriously insufficient. At the same time, the overall supply in the international market exceeds demand, especially in China, where the imbalance between supply and demand is serious. And the domestic urea[9] production cost in China is about 1500-1800 Yuan/ton depending on different technical, while the international market fertilizer price is generally maintained at 2258 Yuan/ton and above. The imbalance between supply and demand contributes to the average price of fertilizer market in Africa to be as high as 5,640 Yuan / ton, about three times more the domestic price of China.

Table 3 Comparison of the Price of Fertilizer in Cameroon, China and International

name	Price in Cameroon（Yuan/ton）	Price in China（Yuan/ton）	International Price（Yuan/ton）
Urea	5500	1500-1800	2258
Compound fertilizer	5640	2070	2375

Data source:  http://www.ampcn.co

2.2 Analysis of Basic Conditions in Cameroon

2.2.1 Excellent Conditions for Economic Development

Through the comprehensive consideration of various factors, such as natural conditions, political environment, geographical location and traffic conditions, there are three countries in Africa: Cameroon, Uganda and Zambia have better basic conditions and meet the requirements of our project. In addition, comparing with the GDP of the three countries in 2008-2018, the economic development of Cameroon in the last 10 years is higher than Uganda and Zambia, and has been increasing year after year, with even more development potential in the future.

Figure 2 Target country GDP 2008-2018

Data source: World Bank Open Data

2.2.2 Advantages of Natural Conditions

• Rich Agricultural Natural Resources

Cameroon is known as the “Central African Granary”, with numerous rivers and abundant water resources. The arable land area is 7.2 million hectares but currently only 180 hectares have been developed.

• Excellent Location  

Cameroon is located in the connecting area of Central and West Africa, close to the Gulf of Guinea with convenient transportation and it was the crossroads of tribal migration in Africa in history. And now a relatively perfect three-dimensional transportation network of sea, land and air has been established.

• Convenient Transportation

It has developed maritime transport, and its largest port, Douala Port, is an important port and shipping hub in Central Africa. Inland countries such as Chad and Central Africa rely mainly on import and export of Douala Port. At the same time, the Government of Cameroon is actively promoting the Kribi Port Industrial Comprehensive Development Zone plan, which will build the second phase of the deep water port, industrial facilities and urban infrastructure on the basis of the first phase of the Kribi deep water port. All facilities and renovation projects are scheduled to be completed by 2040. At present, the first phase of the deep-water port has been completed,  and the second one is about to start, and after the completion of the second phase, the port of Kribi will become the second largest port in Central and West Africa. The construction of the ground transportation system is perfect, the total length of the national railway is 1245 km, the actual operation is 1016 km, the annual passenger capacity is 1.1 million, and the freight volume is 1.7 million tons. Road traffic is well developed, with a total length of about 50,000 km, including 4300 km of asphalt road, accounting for more than 85% of the total national transportation. Meanwhile there are 15 airports in Cameroon, three international air stations, and regular flights covering more than a dozen countries in Europe and Africa..

• Rich Labor Resources

Cameroon, with more than 40 percent of the population under the age of 15, has plenty of labor and relatively low costs, with a minimum monthly wage of about 55 euros. In order to promote employment and to reduce unemployment, that government of Cameroon has put forward a strategy to develop labor-intensive industries and to absorb surplus labor force.

2.2.3 Open Investment Environment

As one of the founding members of the African Union, Cameroon has played an important role in the area of political and economic field in Africa, especially in sub-Saharan Africa. The potential for foreign cooperation is strong, as it focuses on attracting foreign capital, and has introduced a series of initiatives in terms of tax reduction and government service, etc. Cameroon’s Investment Law stipulate that Cameroonian and foreign natural and legal persons can invest in and enjoy national treatment according to law. Enterprises that invest in agriculture, tourism, manufacturing, heavy industry, energy, water supply, environmental protection, high-tech and other industries can enjoy tax relief and other policies.[10]

In particular, it provides preferential loans to private companies that are interested in importing fertilizers at a rate of only 5%, which is far below the average interest rate of international financial institutions. At the same time, the government of Cameroon has increased the regulation of fertilizer market, standardized importing channels, reduced the intermediate links, and expanded importing volume of fertilizers, so as to effectively reduce the price of fertilizers in Cameroon market.[11]

At the same time, China-Cameroon relations have been friendly in recent years. The cooperation in the fields of commercial trade, education, health and culture has achieved remarkable results. China has become Cameroon’s major trading partner, major source of import and the destination of the fifth largest export. The bilateral trade volume between China and Cameroon was $1.95 billion in 2017. China has also become the main source of investment and financing for Cameroon. By the end of 2016 non-financial direct investment in Cameroon totaled $367 million and there is still great room for development in the future.

2.3 Background of Western Cameroon

Cameroon is divided into 10 major provinces-North Province, Adamawa Province, Eastern Province, Central Province, Southern Province, Binhai Province, Western Province, South-West Province and Northwest Province. As the home of the enterprising bamileke (bamil é k é) tribe, the central and western regions of Cameroon are the smallest of the 10 regions in Cameroon, but the population density is the highest and the agricultural economy is more developed. The natural conditions of its agricultural development are superior with good soil fertility, sufficient labor, large demand for food crops, and convenient transportation. It also has the largest port in Cameroon.

The Government of Cameroon has been working to increase the production of food crops, most notably maize, the main local food crop. Corn production had been increasing from 350,000 tons in 1978 to 407,000 tons in 1982 and reached 600,000 tons in 1991. In recent years, the total corn production in Cameroon in 2005 was 800,000 tons, and in 2010 it reached more than 1.7 million tons. The total corn production in Cameroon doubled and is continuing to increase.[12]

Table 4 Summary results of statistical analysis of crop Yield

Data source: https://link.springer.com/article/10.1007/s13280-013-0428-0

2.4 Selection of Fertilizer–Urea

The soil in the western Cameroon is acidic (the soil with the largest acidity in PH ≈ 3.8), and the soil quality is mostly red soil, which requires alkaline chemical fertilizer for synthesis. At the same time, the whole growth cycle of the corn has the most nitrogen elements, the second is the potassium and the third of the phosphorus element which needs a proper amount minerals elements to form it up, the ratio of the nitrogen and phosphorus to the potassium is 1: 0.49: 0.9, the growth potential is reasonably  good , as the yield is high, the nitrogen is the main nitrogen and the potassium is the second, and the phosphorus is applied as appropriate. According to the fertilizer demand characteristics of corn and the soil conditions in Cameroon, urea, the fertilizer with the highest nitrogen content, was selected as the fertilizer for our preliminary export to Cameroon. At the same time, urea is a neutral fertilizer suitable for all kinds of soils and plants. It is not only easy to preserve and transport, easy to use, but also has little damage to the soil. It is a commonly used fertilizer in agricultural production.

3. The Investment Plan

To establish cooperation and seek common development with local communities in Africa, Chinese enterprises not only need local communities to provide soft resources such as human resources and business environment, but also need to establish relations with local society to truly realize resource sharing. Therefore, in the process of investment and development, while acquiring local resources, we must pay attention to the development of local communities, highlight the unity of social benefits, ecological benefits and economic benefits, establish close cooperative relations with local communities, and promote the sharing of resources between both sides.

Combined with relevant information, the biggest obstacle to the growth of fertilizer demand in Africa is the cost of the fertilizer itself, with local farmers paying up to 50% of the cost of a bag of fertilizer when it leaves the factory gates. For locally imported products, in addition to production costs and transportation costs, there are four major factors that increase farmers’ costs: port fees, inland transportation costs, marketing and distribution costs, financing costs. In order to solve these problems, we designed a four-share closed-loop investment model to significantly reduce local fertilizer prices and stimulate local fertilizer application.

3.1 Source Selection

China’s fertilizer market overall supply exceeds demand, prices are lower than the international level, a large number of fertilizer exports. Preliminary statistics from China customs show that in May 2019, China exported 2.464 million tons of mineral fertilizers and fertilizers (excluding ammonium chloride, potassium nitrate and organic fertilizers for animals and plant, hereinafter the same), up 35.2% year on year, exports amounted to us $700 million, up 23.9% year-on-year. From January to May 2019, China exported 10.163 million tons of mineral fertilizers and fertilizers, an increase of 43.3 percent year-on-year. The total export volume reached 2.874 billion us dollars, up 53.6% year-on-year. According to the latest data in 2019, the average price of urea in Shanxi, one of China’s top five domestic urea producers, is as low as 1,700 Yuan per ton. Shandong is located in the middle, but only 50-80 Yuan/ton higher than Shanxi. According to the conditions of Marine ports in different provinces and transportation costs, we finally choose to cooperate with fertilizer manufacturers in Shandong province to export fertilizer.

Table 5 Comparison of Fertilizer prices among the five main provinces

Area	Price of Urea in 2019 ( Yuan/ton )
Hebei Province	1760-1830
Shanxi Province	About 1700
Henan Province	1760-1779
Shandong Province	1750-1780
Heilongjiang Province	About 1730

Data source: China fertilizer network

3.2 Cooperation and Incentives —— Four “sharing” model

• Transportation — Value Sharing

The project will be developed and operated with aid policy. Through undertaking the assistance projects of the Chinese government to enter Africa, cooperating with relevant logistics parks, reducing the transportation cost with the preferential policies of the assistance parks. The project is developed and operated by aid policy, then through the commercial operation to maintain the operation after the aid funds are stopped, giving consideration to both aid and commercial development. While undertaking the policy guidance of promoting “going global” strategy of agriculture, we should expand its business scope and development channels by taking advantage of the assistance policies of the Chinese government, reduce the export cost and better realize the influence investment.

• Marketing—Profit Sharing

Establish a “company + farmer” mode of sharing and cooperation, and cooperate with local agricultural cooperatives and other social organizations, conduct unified production, acquisition, sales and settlement, it guarantees the supply of raw materials for Chinese companies, reduces marketing and distribution costs, enhances market competitiveness and avoids the risk of employment, and also improves the economic income of local farmers. However, due to the imperfect social capital structure of African countries, cognitive and structural social capital has limited support for contract performance, and there are certain risks in the implementation process.

• Motivation—Revenue Sharing

Encourage farmers to become shareholders, strengthen cooperation and sales chain control, improving the ability to perform the contract. Due to the imperfect social capital structure of African countries, there are certain risks in the process of fulfilling the contract; therefore, in the process of investing in Africa, companies must continuously build closer ties with consumers. On the basis of income sharing, we bring consumers into the income chain, pay 5% dividends to shareholders and 1% dividends to consumers, encourage farmers to buy chemical fertilizers and encourage consumers to become shareholders. In addition, it encourages consumers to win more consumers for enterprises spontaneously and strengthens farmers’ ability to fulfill the contract while dispersing or reducing the marketing cost of enterprises.

• Purchase—Resource Sharing

In the process of investment and development, while acquiring community resources, we must pay attention to the development of local communities, highlight the unity of social benefits, ecological benefits and economic benefits, establish close cooperative relations with local communities, promote resource sharing, and achieve a win-win situation to some extent.

In 2017, China’s overall grain crop production was on the rise, while corn production was declining annually, but the demand for corn in the market was still large. Rice was 210 million tons, an increase of 1.5 million tons, an increase of 0.7%; wheat 130 million tons, an increase of 1 million tons an increase of 0.7%; other food crops of 60 million tons, an increase of 3 million tons, an increase of 4.8%. However, corn was 220 million tons, a decrease of 4 million tons, down 1.7%. Given that the corn production in the Chinese market has fallen sharply year by year, and corn is the main production of major food crops in western Cameroon, we can acquire corn and import the corn produced by farmers into China, thereby not only increasing the income of local farmers, it has also formed a real value investment chain, which solves the problem of local grain sales while improving local grain production, stimulates farmers to use chemical fertilizers, increases grain output, and gradually forms a benign value investment chain. (Note: Corn purchase price: 1590-2000(Yuan/ton); Corn Sales price: 1630-2080 (Yuan/ton).

4. Investment Estimation and Source

4.1 Investment Scale

Nowadays, the local market in Cameroon is mainly operated by four chemical fertilizer importers. The total imported chemical fertilizer is about 100,000 to 110,000 tons, with an average importer about 25,000 tons of chemical fertilizer per year. Based on the western market of Cameroon, and our initial investment and cost, we decided to export 5000 tons of fertilizer per year.

4.1.1 Investment Structure

Table 6 Investment Structure

Source: Calculate by authors

The greatest advantage of the China-Africa Development Fund is that we can finance through its “Investment + Loan” model with its parent company, China Development Bank. The China-Africa Development Fund holds a large proportion of the project periodically and the China Development Bank provides supporting loan funds. Besides, because the investment of fertilizer belongs to the projects encouraged by the China-Africa Development Fund that enjoys the preferential local policy of loans in Cameroon, we can borrow from the local banks in Cameroon at a rate of only 5%.

4.1.2 China-Africa Development Fund[13]

On June 26, 2007, the China-Africa Development Fund formally launched as China’s first equity investment fund focusing on investment in Africa, headquartered in Beijing and funded by the China Development Bank. The establishment of the China-Africa Development Fund is a useful complement to the traditional model of China-Africa economic and trade cooperation. , Adhering to the cooperative principle of “enhancing friendship, treating each other as equals, extending mutual support and promoting common development” during investment activities.

The China-Africa Development Fund aims to promote China-Africa economic cooperation and Africa’s development, building a bridge between Chinese enterprises and African projects. Committed to investing in the fields of improving people’s livelihood in Africa and promoting economic development in Africa, we will determine the investment quota according to the investment opportunities of the projects, promoting the realization of the objectives of cooperation between Chinese and African enterprises through direct investment, pushing forward the economic and social development of the host countries, and propelling the further development of the new strategic partnership between China and Africa.

• China-Africa Development Fund is devoted to investing in the fields of improving people’s livelihood and promoting economic development in Africa, contributing to supporting infrastructure and basic industries that play an important role in the recovery and development of African countries and can help them improve their hematopoietic function. For example, electricity and other energy facilities, transportation, telecommunications and urban water supply and drainage, include agriculture, manufacturing and so on.
• China-Africa Development Fund has flexible and diverse investment modes. It can invest directly in common stock, quasi-equity investment in preferred stock, convertible bonds and other mixed capital instruments, and other non-investment funds as “funds in the fund”.
• China-Africa Development Fund can cooperate with enterprises of China and Africa and Chinese-funded enterprises in different combinations. It can also cooperate with financial institutions at home and abroad to invest in African projects, as well as other models conducive to Africa’s investment projects, operation and development.

1. Joint ventures are formed by the China-Africa Development Fund, Chinese enterprises and/or African enterprises to invest in African projects. The company can be registered in Africa or outside Africa.
2. The China-Africa Development Fund invests directly in Chinese-funded enterprises registered in Africa or Chinese-funded equity-holding enterprises, which invest in projects in Africa.
3. The China-Africa Development Fund invests or participates in projects and enterprises with major assets in Africa but registered outside Africa.
4. The China-Africa Development Fund invests directly in African projects in cooperation with international financial institutions.
5. The China-Africa Development Fund, in cooperation with domestic and foreign institutions, has set up a fund to invest in African projects.
6. Other models conducive to investment, operation and development of African projects.

• Investment and management: In principle, China-Africa Development Fund does not hold shares or be the largest shareholder (the internal control is frankly not more than 40% of the total equity of the investment project). Generally, it does not participate in the daily management of investment projects (exceptions for special projects), but according to the constitutions of association and investment agreements, it has the right to participate in the decision-making and management of major matters of the company and the right to appoint or nominate senior managers who are in accordance with the share ratio. Mainly through the appointment of directors, supervisors, financial management personnel to exercise shareholder rights, supervising the operation of enterprises.
• Investment duration: The investment duration is determined according to the characteristics of the project industry, the level of return on investment, the risk situation, the timing and manner of withdrawal. The holding period of a single project is mainly 5-8 year. And it is no more than 10 year in principle.
• Investment withdrawal: Before each investment decision, The China-Africa Development Fund should make investment withdrawal arrangements as clear as possible. The withdrawal methods mainly include, but not limited to, listing, agreement transfer, debt repayment withdrawal and other withdrawal methods (such as asset secularization after investment).
• Investment income: The China-Africa Development Fund determines different investment return requirements based on the income, risk and transaction structure of the projects they invest in. The return on investment includes investment dividend income and capital appreciation income.

5. Economic Benefit Index

5.1 Cost Evaluation of unit of Urea

Table 7 Cost Evaluation

Source:Calculate by authors

5.2 Income Statement

Source: Calculate by authors

5.3 Project Appraisal

Source: Calculate by authors

6. Social Impact of Investment

The project not only realizes the profit returns, but also considers the social responsibility. At the benefit level of the project, it realizes the concept of ESG，Helps to achieve the benefits of sustainable development in environmental，society and governance. The core value of ESG is fully reflected in the implementation process and impact of the project, as follows:

• Environment:

Urea can increase the content of soil available nutrients, increase the content of available nitrogen to make up for the large amount of nutrition lost by soil. Moreover, the high utilization rate of fertilizer reduces the waste of resources and environmental pollution, promotes the sustainable development of resources and continues the green supply chain. The green investment of fertilizer brings the long-term value of the environment, not only obtains the benefit, but also reduces the emergence of a large number of environmental problems, and realizes the sustainable development of the environment.

• Society：

In terms of population, the use of fertilizers has greatly increased agricultural productivity, the grain production of farmers has greatly increased also for the food supply, and the reduction in the number of hungry people has ultimately led to an increase in the number of labor force; Economically, the use of fertilizers has increased the income of farmers, increased the per head income of Cameroon and reduced the number of poor people. As a result, the GDP of the whole country has gradually increased, which has led to the overall economic growth of Cameroon; In terms of employment, the increase of job opportunities and the employed population and the decrease of unemployment rate have reduced the unrest and promoted the stable and sustainable development of society.

• Governance:

The use of fertilizer has greatly increased the corn yield in Cameroon, while the corn yield in China is decreasing annually. The acquisition of Cameroon’s local corn exports to the Chinese market has increased the income of Cameroon’s farmers and promoted the country’s economic development. On the other hand, it also meets the large demand for corn in the Chinese market. In the process of sharing resources, we have promoted the common development of these two countries and achieved a win-win situation in cooperation. Moreover, this efficient model ensures that farmers can achieve fair labor practices that can promotes fair competition in trade between the two markets while getting a return on investment. And continuously promote technological innovation in the process of promoting the project. Using scientific and technological innovation to promote the diversity of agricultural use technology and promote the modernization of agricultural production in Cameroon. And to ensure the transparency of price and other related market information, and to lay the foundation for the regular development of the project, and ultimately promote the sustainable development of food and agriculture in Cameroon.

Authors： Bai Shunzhi, Li Chulei, Wang Jiali, Jia Yixuan

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[1] Data sources: The Food and Agriculture Organization of the United Nations, FAO http://www.fao.org/home/zh/

[2] Data source： 《World Population Prospects 2019》 https://population.un.org/wpp/

[3] The Global Hunger Index, GHI is an important measure of a country’s minimum requirements for a healthy life, “0” is the best, “100” is the worst, “10 ≤ 19.9” is “severe hunger”, and “30 or more” is a very worrisome hunger problem.

[4] The three-year difficult period in China: From 1959 to 1961, China suffered a national food and non-staple food shortage crisis as a result of the Great Leap forward and at the expense of agricultural industrial development policies.

[5] The report covers 39 sub-Saharan African countries, 13 of which are unable to calculate ghi scores because of insufficient data

[6] Data source：Fertilizer markets in eastern African countries. http://m.sohu.com/a/215327319_590014

[7] The International Fertilizer Association: a non-profit organization representing the global fertilizer industry.

[8] Data source： http://www.ampcn.com/

[9] A kind of fertilizer

[10] Data resource:Country (region) Guide for Foreign Cooperation—Cameroon

[11] Data resource：Ministry of Commerce of the people’s Republic of China http://search.mofcom.gov.cn/swb/recordShow.jsp?flag=0&lang=0&base=iflow_6&id=cm200904062042491&value=(%E5%8C%96%E8%82%A5%E5%B8%82%E5%9C%BA)

[12] Data resource: https://link.springer.com/article/10.1007/s13280-013-0428-0

[13] Information source：http://www.cadfund.com/index.aspx