Whether for profit or social motives - and often both - an increasing number of investors are targeting opportunities in African agriculture. At the same time innovative approaches for deploying aid to support farming businesses linked to smallholders are emerging. This blog provides a snapshot of who is doing what, where and how.

25 March 2011

Launch of the 2nd funding round of the Mozambique Catalytic Fund

AgDevCo is pleased to announce the launch of the second funding round for the Beira Agricultural Growth Corridor (BAGC) Catalytic Fund. The Catalytic Fund is designed to support commercially-viable agriculture businesses in the Beira corridor in Mozambique which benefit smallholder farmers and local communities. Proposals are now invited from entrepreneurs with business proposals which meet the funding criteria as described on the BAGC website. Amounts of up to $500,000 per business opprtunity are available. The deadline for the submission of funding applications is 15 April 2011.

17 March 2011

Acumen Fund raises assets in East Africa to $25 million

The Acumen Fund, a non-profit venture capital firm, will double its assets under management in East Africa to Sh2.1 billion ($25 million) in the next two years.

The organisation, which targets institutions that have a potential to make social impact when choosing companies to lend growth capital, has invested $12 million in East Africa and another $48 million in social projects for the poor in India and Pakistan.

The focus of the new investments in East Africa will be in food and nutrition, microfinance, health, water and sanitation, housing, agriculture and energy.

Biju Mohandas, the regional manager, said on Wednesday the firm is about to seal a deal with a microfinance institution. He did not reveal the name of the institution.

“With regard to agriculture, we are looking at nutrition, tissue culture and artificial insemination,” Mr Mohandas said.

Early this year, the organisation along with Root Capital, signed a $2.2 million (Sh187 million) financing deal with a Ugandan cotton ginnery, deepening regional investments by the firms.

The Ugandan ginnery will create jobs for an estimated 32,000 small scale cotton farmers in Uganda.

The company on Wednesday further deepened its social impact projects by signing an agreement with the KCB Group charity arm, KCB Foundation, which will sponsor the first Acumen Fund East Africa Fellows Programme aimed at training 20 emerging leaders in Kenya, Uganda, Tanzania, Southern Sudan and Rwanda.

The foundation donated Sh16 million for the training programme.
“The objective of the programme is to build an entrepreneurial pool of talented leaders who have the financial and operational skills to build strong organisations and the moral imagination to create a more inclusive economy,” said Susan Omanga, the KCB Foundation chairman.

The training targets people carrying out compelling projects with large social impact, passion for the region and a proven track record.

Since its founding in 2001, Acumen Fund has invested more than $40 million in companies that provide access to health, water and sanitation, energy, among others to low-income consumers in south Asia and East Africa.

10 March 2011

High Food Prices And Popular Uprisings – Is Ghana at Risk?

The following is an extract from Peace FM Online. The full article is available here
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The ongoing popular uprisings in North Africa and the Middle East poses the question if other developing countries, including Ghana, may experience similar or other forms of uprisings in the light of the imminent global food crisis of 2011. The question on everybody’s mind is if the revolutions and protests in North Africa and the Middle East can and will spread to other developing nations, including Ghana.

Similar circumstances in Ghana

It is clear that there are corresponding factors between the countries where the revolutions and protests are taking place and Ghana. Some of these include:

Poverty – Although Ghana has been hailed to have made great progress in reducing poverty, 30 percent of its population (approximately 7.8 million people) live on less than US$ 1.25 per day. However, according to the UNDP’s International Human Development Indicators about 46 percent of households are poor or deprived.

Unemployment and youth representation – The youth in Ghana younger than 30 years make up 60 to 70 percent of the population, while those between 15 and 25 make up 25 percent. With an unemployment rate of more than 25 percent in this segment, it means that Ghana is sitting with more than 6 million young and unemployed people.

High food prices – Food prices in Ghana have been spiraling upwards. This trend will increase due to the latest global food crisis and due to the fact that Ghana is highly dependent on imports of especially cereals such as rice.

High food prices – The straw on the camel’s back in Ghana?

There is little that any government can do about food price volatility and food crises such as the 2008 and 2011 crises – the last of which will hit Ghana in the soon. The 2011 food crisis is a global problem that requires both long-term strategies and short-term initiatives.

Long-term strategies

The world agrees that the best protection for developing countries is to become self-sufficient (as far as possible) in terms of food production. The GoG stated that they are pursuing this objective, and plans to make Ghana self-sufficient in terms of rice production within two to three years.

Local production only caters for between 10 to 30 percent (no one really knows the true status) of local demand. To produce the deficit of 70 to 90 percent locally within two to three years is just not possible due to various factors.

The truth is that the dream of self-sufficiency can only be reached in ten or more years if, and only if, massive commercial farming is introduced and millions more is invested in the agriculture in terms of:

- Quality seeding programmes;
- Irrigation systems;
- Mechanisation;
- Farmer education;
- Fertilization;
- Creation of markets.

The conclusion that must be reached is that Ghana is indeed at risk.

Ghana sits with millions of unemployed youth without hope, millions of people are reeling under high food, utility and fuel prices, corruption in the government and judiciary continues as a matter of course and the government seemingly does not care.

The chance of a revolution similar to those in Tunisia, Egypt and Libya is slim. Uprisings in a so-called democracy such as Ghana is much more likely to take the form of more and more activists who will come forward to expose the non-caring character of the NDC led government, peaceful demonstrations and eventually a silent revolution at the ballot box.

Ghana will be going to the polling booths again in less than two years. High food prices and the lack of political will by the government to support its people will definitely play a major role in the outcome of the 2012 elections.

3 March 2011

Food prices still climbing

Global food prices increased for the eighth consecutive month in February, with prices of all commodity groups monitored rising again, except for sugar.The FAO Food Price Index averaged 236 points in February, up 2.2 percent from January, the highest record in real and nominal terms, since FAO started monitoring prices in 1990.