Established in 2009, AgDevCo’s vision is a thriving commercial African agriculture sector that benefits people, economies, and the environment. The organisation contributes to this goal by providing investment capital and technical assistance to grow sustainable and impactful businesses across the agricultural value chain. In doing so, it aims to promote resilience, gender equality and the production of better-quality, more nutritious food.

This new funding builds on the original endowment funding provided by the UK government which helped establish AgDevCo over the past decade. This endowment has provided capital to agribusinesses that have directly created or sustained more than 15,000 jobs and to work with 750,000 smallholder farmers to help increase their income and improve their resilience to climate change. It has also allowed AgDevCo to build a capability and track record to the point where it can secure external investment capital.

In welcoming the investment, Keith Palmer, AgDevCo’s founder and Chairman, said: “Securing investment from CDC, Norfund and DFC is a major milestone in AgDevCo’s history. It is a strong endorsement of AgDevCo’s team and our strategy. We are excited that our vision is shared by our new funders, who recognise the important contribution that AgDevCo investments can make to productivity, sustainability, and inclusivity in Africa. Their funding marks the beginning of a partnership in which AgDevCo will use its sector specialism, drawing on our new funders’ networks and resources, to increase the number of impactful investments in African agriculture.”

UK Minister for Africa, Vicky Ford, said: “I am proud to see how AgDevCo’s investing has boosted sustainable agriculture across Sub-Saharan Africa over the past 10 years, including deepening impact on smallholder farmers and SMEs. This new investment will bring continued growth, by enabling agribusiness SMEs to expand, improve farmer incomes, create new jobs and strengthen climate resilience across Africa.”

Tenbite Ermias, CDC’s Managing Director for Africa, said: “This investment reinforces our long-term commitment to investing in key sectors in Africa including agriculture, which is critical for creating jobs, promoting gender equality and supporting people to build a better life for themselves and their families. Furthermore, it reflects our continued focus on climate finance which is central to our new strategy over the next five-year period, to support emerging economies that are most vulnerable to the impacts of the climate emergency.”

Ellen Cathrine Rasmussen, Executive Vice President of Scalable Enterprises in Norfund, said: “Norfund is very pleased to partner with AgDevCo to deliver on our joint mission: to create jobs and improve lives by investing in businesses that drive sustainable development. A thriving commercial African agriculture sector is vital for economic growth and job creation. More than half of Sub-Saharan Africa’s population work in agriculture, yet Africa does not produce enough food to feed the continent. The investment in AgDevCo will create jobs, increase food production, improve climate change resilience, and promote gender equality. The AgDevCo team’s skills, networks and achievements are impressive – and we look forward to working with them.”

Algene Sajery, DFC’s Vice President of External Affairs and Head of Global Gender Equity Initiatives, said: “DFC is thrilled to support AgDevCo with a $20 million loan to bring additional capital to smallholder farmers and agricultural businesses in Africa, promoting food security for lower-income communities across the continent. DFC’s loan, alongside financing from our partner DFIs, will enable AgDevCo to link more farmers to markets and create jobs for underserved populations, with a focus on women farmers.”

This independent, third-party funding will accelerate the expansion of Bowery’s network of smart indoor farms beyond the East Coast and brings its total debt and equity capital raised to more than $647 million — representing the strongest institutional backing in the Controlled Environmental Agriculture industry. KKR’s credit investment follows Bowery’s $325 million Series C funding in 2021 led by Fidelity Management & Research Company LLC.

The Company also announced today that it is building two new state-of-the-art farms serving the Atlanta, Georgia and Dallas-Fort Worth, Texas metro areas. The farms will create more than 200 year-round green jobs across both markets and provide locally grown produce to a population of 20 million and 16 million within a 200-mile radius of Locust Grove, Georgia and Arlington, Texas, respectively. Both farms are expected to open in the first quarter of 2023.

The two new farms, leveraging billions of data points collected from previous farms, will feature industry-leading tech innovations resulting in efficiency improvements to all elements of the grow environment, from LED lighting to water recapture to climate control, ultimately improving quality and yield. These farms represent a recommitment to Bowery’s sustainability goals; the company plans to use power from 100% renewable sources.

“We’re thrilled to announce our expansion beyond the Northeast and Mid-Atlantic regions,” said Irving Fain, CEO and Founder of Bowery Farming. “KKR’s support is a testament to the proven success of our business model and a strong vote of confidence in our technology leadership and ability to address critical challenges in the current agricultural system. There is enormous economic opportunity that comes with supporting our mission to democratize access to local, pesticide-free Protected Produce, and now we are ready to continue our growth more rapidly.”

The new financing will also provide resources to accelerate advancements in farm design and the BoweryOS, giving more communities access to a reliable supply of locally-grown produce, year-round. Bowery’s proprietary farm design and technology have been a key priority since the Company was founded and are at the heart of its efficient and scalable business model. The BoweryOS, the central nervous system of the business, integrates software, hardware, sensors, computer vision systems, AI, and robotics to orchestrate and automate the entirety of operations. Each new farm comes online in record speed, collectively benefitting from the power of the network and its billions of data points.

“We are excited to support Bowery’s pioneering efforts in vertical farming, which are directly contributing to the resiliency of our food supply,” said Michelle Hour, Director at KKR. “We believe that Bowery has the right commercial model, technology and team to capitalize on the rapidly growing consumer demand for sustainably-sourced food, and we look forward to helping the Company continue to innovate and scale to benefit communities across the United States.”

Bowery has continued to grow at a significant pace in 2021 and achieved a number of milestones; highlights include:

• More than doubling revenue
• Opening Farm X,  a state-of-the-art innovation hub for plant science in Kearny New Jersey, expanding R&D capacity by nearly 300%
• Transforming an industrial site in Bethlehem, Pennsylvania into a technologically advanced smart farm
• Breaking ground on two additional large-scale commercial farms in Locust Grove, Georgia (located in Henry County near Atlanta, home to rapid population and job growth) and Arlington, Texas (located in the center of the Dallas-Fort Worth Metroplex, a rapidly growing technology and manufacturing hub)
• Expanding our reach to more than 800 stores through a partnership with Wakefern, the nation’s largest retailer-owned cooperative, including brands such as Gourmet Garage, Shoprite, Fairway, The Fresh Grocer, and Dearborn Market

According to the US National Weather Service’s Climate Prediction Center, Sierra Leone received an unprecedented amount of rainfall this year – three times the normal seasonal rainfall. Such torrential rains are a clear sign of the changing climate. In August 2017, at the height of the rainy season, Freetown received an unprecedented average of 539,9mm of rainfall. With its land size of 356,9km2, Freetown had an average of 190 million cubic meters of rain water to drain. This extreme volume of water, combined with human factors like encroachment on natural environment such as creeks and wetlands, which are the natural drainage and storage systems for flood waters, as well as construction on flood-prone areas and inefficient drainage systems, among other factors, cumulatively precipitated this disaster.

In early 2017, new data from the UK Met Office, the United Kingdom’s national weather service, and the US National Aeronautics and Space Administration (NASA) show that the earth’s temperature has increased to about 1,1°C above pre-industrial levels. This is dangerously close – just 0,4°C away – from the 1,5°C threshold set by the Paris Climate Change Agreement to prevent the worsening effects of climate change. At this rate, the vulnerability of Africa’s coastal cities is unprecedented. Sea level rise is projected to hit coastal cities – 14% higher than the global average by 2100 for the fast approaching over 4°C warming scenario. The impact will stretch far and wide beyond Freetown to expose millions to risk of flooding. By 2050, high numbers are projected in coastal cities of Mozambique (5million), Tanzania (2million), Cameroon (2million), Egypt (1million), Senegal (0.5million), and Morocco (0.5million). Such flooding will reverse economic and development gains with the ensuing health impacts and damage to infrastructure, loss of tourist sites and disruption in food supply. It will also expose the populations to elevated food prices, loss of livelihoods and strife.

As far as ecosystems degradation is concerned, Africa loses up to USD68 billion annually. This means that the continent’s natural buffer against such impending climate change effects is being lost at a rate of about USD180 million daily.

The science is clear. The escalating climate change knows no boundaries, and this is coupled with an increasingly degraded environment. Countries across Africa need to urgently address these dual challenges if we want to forestall similar disasters in future.

This is the logic behind the universal, global response to climate change that has been called for under the Paris Agreement. Sierra Leone, classified as the third most vulnerable country to climate change, stands to benefit from being part of this global collective action – and it is among the countries that have ratified the Paris Agreement, demonstrating its resolve to combat climate change. In fact, Africa as a whole has shown global leadership in responding to climate change.

The good news is that practical solutions have been successfully applied across Africa. In Rwanda’s Geshwati area, a land suitability and use map is informing policy decisions to relocate vulnerable communities from previously encroached natural environments and high-risk areas to safer habitation areas. Considering that agriculture is the backbone of these communities, this plan is also informing on ecosystems-based adaptation (EBA) agriculture techniques that the communities can safely engage in for their livelihoods without degrading the area. Simultaneously, the plan is guiding the restoration of previously degraded catchment areas using EBA techniques like agro-forestry and the planting of indigenous trees, among others, to stabilize soils and slopes and to regulate flood waters. This has eradicated landslides that were once a common phenomenon in the area.

A similar two-pronged strategy has been successfully applied to build resilience in Mozambique’s coastal communities that were highly vulnerable to coastal flooding. For example, an investment of USD120 per person to rehabilitate depleted mangroves and establish crab farming restored mangroves. These have become natural buffers against coastal flooding while simultaneously preventing future encroachment by providing alternative livelihood activities away from the mangroves.

Sierra Leone and other at-risk countries can benefit from similar strategies that restore degraded ecosystems, allowing them to act as a buffer to the compounding effects of climate change. Creating sustainable alternative livelihood activities away from risk-prone areas can also help prevent possible future encroachment, thus preventing the degradation of natural ecosystems. After all, natural ecosystems are our best bet against mounting climate change-driven disasters.
Maps of projected changes in Northern Hemisphere seasonal mean surface air temperature from the late 20th century to the mid-21st century, based on SRES emissions scenario A1B photo credit WikiCommons
We must fight the trend of urbanisation

Africa’s cities face the fastest pace of urban population growth globally. This growth, however, does not reflect positively on economic growth, which is a key enabler to building climate resilience. For example, the World Bank notes that African cities are almost 30% more expensive than other countries at similar income levels. Housing is 55% more costly and food prices are 35% higher than in other low and middle-income countries. Considering the high unemployment and underemployment, the majority – more than 50% – of urban dwellers end up living in slums. Sierra Leone, which faces an urbanisation rate of 2,9%, has 75,6% of its urban population in informal settlements. These urban poor stand out as the most vulnerable, something that needs to be addressed urgently.

To address this, a key area is diversifying and decentralising socioeconomic growth opportunities away from cities. This is critical to eradicate the allure of cities as being the only areas where one can access income opportunities. It is vital to decongest cities and curtail the growth of informal settlements that are vulnerability hot spots.

Focusing on the catalytic area of Ecosystem-based adaptation (EBA) Driven Agriculture and industrialisation powered by clean energy offers an opportunity to diversify income opportunities to sustainable sectors of EBA-driven Agriculture & Clean Energy at a minimum. Cumulatively, this amalgamation is projected to create an agro-industrial sector worth up to USD1 trillion by 2030, while ensuring ecosystems are taken care of and carbon is offset to ensure climate resilience. It is such diversification that will open up rural Africa, where 70% of agriculture takes place, to industrialisation and the creation of economic opportunities to relieve the pressure on urban areas.

How to make it happen

Making this paradigm shift happen requires a collective undertaking. It will take the intervention of both state and non-state actors, as is called for in section 5 of the Paris Agreement. Mutual partnerships to bridge policy and operational gaps will have to be formed. Through the Ecosystem-based Adaptation for Food Security in Assembly (EBAFOSA), countries and stakeholders are engaging to bridge critical gaps. Among the intervention areas that are being prioritized is the harmonization of policy across complementary ministries, such as the ministries of agriculture, industrialization, land, energy, trade and roads, among others, to ensure that their policies complement the establishment of clean energy-powered agro-industrial zones in rural Africa as special enterprise zones and centres of sustainable jobs creation. For example, through EBAFOSA, Sierra Leone is harmonizing finance, industry, energy and agriculture sectoral policies to establish tax concession incentives for agro-based industries that are powered by clean energy in rural areas. These are set to attract investment to these areas to fuel job creation and take the pressure off urban centres like Freetown.

Another area is affordable financing. To fuel the growth of sustainable businesses outside cities, EBAFOSA is also bridging financing gaps to spur entrepreneurship in these catalytic sectors in rural areas. Kenya provides an example on this. In Makueni County, which is the first county to legislate a climate change fund to domestically finance climate actions, EBAFOSA Kenya is facilitating mutual partnerships between the county government and the private sector actors to ensure that this fund is partly used to de-risk private-sector lending along the sustainable agriculture led, clean energy-powered agro-value addition chain. Working with select micro-financiers, the government of Makueni County is developing a risk-sharing facility by providing a monetary deposit as security to cover default risk and unlock up to 10 times the securitized amounts for lending to entrepreneurs along the sustainable agriculture-led clean energy-powered agro-value addition chain. This risk-sharing facility is reducing the cost of capital and incentivising private sector actors engaged along this chain – from farmers, distributors, marketers and advisory service providers – to capitalize their businesses and create sustainable jobs at the sub-national level to lure people away from crowded cities.

Also an important area where harmonization can happen is in the building of multi-stakeholder, complementary partnerships to bridge policy and operational gaps towards sustainable rural industries. In Cameroon, EBAFOSA is catalyzing partnerships at policy and ground level towards linking off-grid small-hydro directly to power cassava and Irish potato processing in rural areas into varied product lines. These are then linked to markets and supply chains across the country, using ICT mobile apps. A total of 10 youth groups engaging in ICT, clean energy and marketing have been engaged, creating green jobs for approximately 100 young people. More than 500 women now have access to value-addition services As a result they have cut their post-harvest losses to enhance their income stability and the community’s food security. Such gainfully engaged people will not be lured to cities in search of a livelihood.

Working together towards a common goal

“Traveling is learning,” says an African proverb. Sierra Leone and other at-risk countries stand a real chance of forestalling similar disasters by domesticating the above solutions that have been successfully applied by their counterparts across Africa. EBAFOSA, through its modus operandi of ‘innovative volunteerism’, offers an opportunity for country stakeholders to convene their respective capacities for mutual partnerships towards a common end. The solutions are known and we have the means to implement them. Let’s rise and act in the best interests of Africa’s present and future generations.

Never in Africa have these words uttered by Nelson Mandela, an African icon, rung as true as they do presently.

We are two years into the implementation of the sustainable development goals (SDG) to achieve food security, combat poverty, create jobs, enhance equality and peace, enhance resource efficiency, combat climate change and protect the environment as critical priorities in Africa.

The writing is on the wall. And just as colonial oppression drove our founding fathers to launch the independence struggle, today the urgent need to accelerate the continent’s socioeconomic transformation beckons us all, as citizens of the current generation, to action. The time to do the right thing and act is now and in so doing, the next generation of continental icons will emerge.

Unlocking the enigma of Africa’s next icons

Three distinctions position clean energy and Ecosystem Based Adaptation (EBA) Driven Agriculture as catalytic sectors in Africa.

First is economic inclusion. Agriculture is the most accessible economic sector that employs the majority of Africa’s work force, at an average of 64 percent across the continent. Maximizing the productivity of this sector means enhancing income and economic opportunities for the majority in the continent.

Secondly, Africa holds a comparative advantage in terms of resources, with 65 percent of the world’s uncultivated arable land and a 300-million-strong middle class demanding more value added and differentiated agro-products and projected to grow a food market worth $150 billion in the next 13 years. This represents a significant domestic consumer market for growth of local value addition agro-industries. On energy, is the abundant renewable energy potential including hydro estimated at 1852TWh annually, 3 times the continent’s current demand, and the best solar resource in the entire planet. By leveraging these resources in complementarity, the region can establish global competitiveness, and create the much needed jobs.

Third, focus on policy and non-policy investment to maximize productivity of these sectors serves the leading socioeconomic development priorities of food security, enhanced income and job opportunities. To maximize this productivity, development in these sectors needs to be considered as complementary and not in silos as classically approached.

This amalgamation will potentially maximize productivity of agriculture by cutting post-harvest losses (PHL) largely driven by lack of value addition. It will incentivize use of EBA and clean energy to offset carbon and enhance ecosystems, thus further cutting crop losses due to climate change and those due to ecosystems degradation. Amalgamation will also maximize productivity of clean energy development by diversifying application beyond domestic use to include productive use in agro-processing and value addition.

For example in Kenya, estimates show that cumulatively, on-farm value addition using solar powered, efficient micro-irrigation is saving farmers over $10,000 annually in operating costs relative to using conventional fossil fuel powered, non-efficient farrow systems. As a result farmers are generating up to $30,000 per acre annually. What is needed for impact across the continent are policy and non-policy incentives and investments to upscale this paradigm. It is in this upscaling that the long-awaited solutions to sustainably accelerate socioeconomic transformation will emerge. And in the process, create the next generation of continental icons.

Moving from talk to action – The Ecosystems Based Adaptation for Food Security Assembly (EBAFOSA)

EBAFOSA is already committed to upscaling through innovative volunteerism. This volunteerism seeks the application of physical and non-physical resources at one’s disposal – especially professional skills, organizational and professional networks, and ongoing initiatives – to build mutual partnerships with complementary actors at policy and operational levels. That’s to enhance the respective business or organizational objectives, like expanding market share, transferring skills and technology, or operationalizing policies, but aligned to the shared EBAFOSA strategic objective. This strategic objective is to bridge policy and operational gaps to maximize the productivity of both clean energy and nature-based, EBA-driven agriculture to sustainably accelerate socioeconomic transformation and achieve the SDGs.

Through innovative volunteerism, EBAFOSA is maximizing agricultural productivity. These innovative volunteerism efforts are being applied at the EBAFOSA pillars: amalgamation; policy harmonization; standardization; innovative financing, and ICT as driver of partnerships. To date, a number of achievements can be recorded across Africa.

Amalgamation, where clean energy expansion is tagged directly to powering value addition of sustainably produced agro-products (rather than undertaking them in silos) is the EBAFOSA foundational pillar. For example in the northwestern part of Cameroon’s Jakiri municipality, EBAFOSA is catalyzing partnerships at policy and ground level towards directly linking off-grid small-hydro to power cassava and Irish potato processing into varied product lines, and linking these to markets and supply chains using ICT mobile apps.

This is not only offsetting carbon in energy generation and building ecosystems resilience, but creating income opportunities along the entire agro-value chain and ancillary chains of clean energy and ICT. A total of 10 youth groups engaging in ICT, clean energy and marketing have been creating green jobs for approximately 100 young people. Over 500 women now have access to value addition services and as a result have cut their PHLs to enhance income stability and the community food security.

On policy harmonization to maximize productivity, EBAFOSA is achieving this through ministerial-level collaboration across ministries of agriculture, environment, energy, industrialization and others that are forming interagency policy task forces. These policymakers are further joined by stakeholders from private sector and the development community to share knowledge and experiences in aligning policy – all achieved through innovative volunteerism.

The EBAFOSA Sierra Leone task force has started building on some ongoing policy initiatives across four complementary ministries. A key focus for the Sierra Leone task force is tax concession policy for agro-based industries in rural areas. These are set to incentivize investment in clean energy power plants dedicated to adding agro-value near farming areas, and the task force work is another example of what innovative volunteerism is doing at policy level.

On innovative financing, EBAFOSA is reducing key factors of climate risk (driven by climate change-induced crop failure) and financial risk (driven by repayment defaults) to catalyze affordable private-sector lending along the EBAFOSA value chain.

For example, in Kenya, EBAFOSA Kenya stakeholders are working with the Kenya county governments to leverage county climate change funds for additional private sector resources. In the pioneering Makueni County, the fund is setting aside 50 percent of the portfolio so it can securitize up to 10 times the amount in private banks. These securitized monies will be loaned through low interest microfinance institutions, as a priority to entrepreneurs engaged in actions that optimize the agro-value chain using EBA and clean energy. Therefore, they indirectly finance the upscaling of EBA-Driven Agriculture and clean energy agro-value addition to create multiple low carbon, higher order income and job opportunities.

On ICT as a driver, the EBAFOSA-driven ICT app called EdenSys is enabling farmers to use their mobile phones to access advisory services, to access inputs including clean energy, and to connect to markets where they can price and sell their products among other key actions.

Going forward, a dedicated service to finance products and services along the entire EBAFOSA chain called M-eBAFOSA is being developed and this will be a one-stop-shop financing module. It’s a doorway that links end users and clients interested in financing along the EBAFOSA chain, to the relevant product and service providers also within that chain, be it advisory services or technology for EBA/clean energy, EBAFOSA compliance standards, or finance providers.

These are samples of how EBAFOSA is upscaling the paradigm that will potentially create the next generation of icons across the continent. Innovative volunteerism provides an opportunity to engage more people to cash on this paradigm, and be on track to clinching the prize of next generation continental icons.

Conclusion

“When you follow in the path of your father, you learn to walk like him.” This Ashanti proverb provides a lesson for Africa’s next potential icons. The first generation of continental icons arose out of solving Africa’s main challenge at infancy – the struggle for self-determined rule. Their dedication and determination to liberate the continent from the shackles of colonialism is what elevated them to status of icons.

At present, Africa faces the urgent need to accelerate socioeconomic development sustainably and catch up with the rest of the globe in actualizing the SDGs and implementing the Paris Climate Change Agreement. Innovative volunteerism towards maximizing productivity of the continent’s catalytic sectors of EBA Driven Agriculture and Clean Energy stands out as an opportunity to accelerate this development.

Learning from the first generation of icons, our dedicated and determined efforts in operationalizing innovative volunteerism make possible this generation’s ascent as “continental icons” of Africa’s future. This is our time as the current generation and Innovative Volunteerism through the framework of EBAFOSA provides the opportunity to do so.

By Dr. Richard Munang

However, an assessment of the continent’s progress in combating climate change brings to mind a popular African proverb: “A large chair does not make a king”—in other words, huge implementation challenges remain. Africa’s policy makers, however, are eager to meet these challenges, believing that achieving the objectives of the climate change deal could unlock the continent’s socio-economic potential.

Signed in late 2015, the Paris Agreement entered into force on 5 October 2016. One month later, at the COP22 (Conference of the Parties to the United Nations Framework Convention on Climate Change UNFCCC) in Marrakech, Morocco, world leaders formally adopted the Marrakech Action Proclamation, which recommitted parties to full implementation of the Paris Agreement. And implementation has since started.

As of April 2017, of the 143 countries that have so far ratified the agreement, 33 are in Africa, including Benin, Burkina Faso, Cameroon, Chad, Ethiopia, Gabon, Gambia, Kenya, Nigeria, Somalia, Tunisia, Uganda and Zambia. That is 60% of the total number of African countries.

Beyond the ratifications, many countries have also fulfilled a key requirement in the agreement by formulating their Nationally Determined Contributions (NDCs). The NDCs are the countries’ individual efforts to achieve climate change goals. In their NDCs, the majority of African countries indicated plans to prioritize climate proofing development activities, especially in economic sectors such as agriculture and energy.

An example of climate proofing in the agriculture and energy sectors is the restoration of ecosystems, a development that is already gathering steam on the continent. Agenda 2063—a set of aspirations formulated by the African Union (AU) to point the way to prosperity on the continent—also highlights ecosystem restoration as a way to catalyze socio-economic development.

The AU maintains that by applying ecosystem-based adaptation in the agriculture sector in combination with clean energy, countries can add agro-value chains, spur food security and increase economic opportunities along the value chain, while simultaneously lowering carbon emissions and conserving ecosystems.

Currently, Africa’s development challenges are many. One serious disadvantage is that more than half of its 1.2 billion population lives on less than $1.25 per day—the standard threshold for absolute poverty. Also, about 60% of Africa’s unemployed are youth. Food security is also a problem: a quarter of Africa’s population goes to bed hungry, while more than 200 million Africans suffer from severe malnutrition.

Africa’s strengths

To respond to these challenges while implementing the Paris Agreement, experts say African countries should maximize the potential of key sectors capable of boosting socio-economic development. In other words, the focus should be on agriculture, food production and clean energy, among other sectors.

Africa’s strengths lie in its immense natural resource potential and other ‘sweet spots’, including having 65% of the world’s arable land and 10% of its inland freshwater resources. The continent’s renewable energy potential can be realized through hydro as well as solar power. Harnessing these resources in a sustainable way will boost Africa’s development.

Agro-value chains in Africa, if properly harnessed, can reduce poverty two to four times faster than any other sector, according to the World Bank. The agricultural sector’s projected value by 2030 is $1 trillion, and this sector could potentially provide 17 million jobs, says the Bank.

The Paris Agreement accentuates the opportunities in Africa’s economic sectors; what remains is for countries to implement the agreement with full attention to domestic development needs.

Ecosystem-based adaptation

The UN Environment, which promotes sustainable environment through sound policies and practices, is providing technical and other forms of assistance to African countries implementing the Paris Agreement to enable them to adequately address socio-economic challenges, particularly food insecurity and unemployment, as well as macroeconomic growth.

The Ecosystems Based Adaptation for Food Security Assembly (EBAFOSA) is one of the initiatives to power sustainable agro-industrialization. EBAFOSA is facilitated by the UN Environment supported by the AU and state and non-state actors, including private-sector partners. Ecosystems-based adaptation for food security consists of methods of agricultural production that promote conservation and sustainability through integrated management of land, water and living resources.

Many of the 40 African countries implementing EBAFOSA are successfully using a combination of policies and other operational interventions to address socioeconomic priorities, offset carbon emissions and protect ecosystems.

In the Democratic Republic of Congo, for example, a group of young agri-preneurs (agricultural entrepreneurs) are using clean energy to process cassava (an indigenous climate resilient crop) into flour. They then package and standardize the flour before selling it. An agri-preneur can rake in up to $4,000 weekly. This business model reinforces the overarching argument for green initiatives, which is that it can be a win-win: protecting the environment can also benefit the bottom line.

A boost for SDGs

A green initiative such as that of the Congolese agri-preneurs will contribute to Sustainable Development Goal (SDG) 13 (combating climate change), SDG 7 (affordable and clean energy), and SDGs 1 and 2 (tackling poverty and boosting food security).

In Kenya, the use of information and communications technology to garner pertinent information for financing purposes is increasing agricultural production and promoting a clean energy value addition. Through EdenSys, an end-to-end agri-business management app for mobile phones and computers, enterprises engaging in EBA and clean energy agro-business activities can post their financial records online and use them to apply for loans. A number of microfinance institutions are providing these loans, which indirectly contributes to the SDGs pertaining to climate change, clean energy, the elimination of poverty and food security.

In Makueni County in eastern Kenya, the UN Environment is helping local authorities create a climate change fund. The plan is to make the fund a financing pool for climate resilience activities, particularly those focusing on ecosystems-based adaptation for food security. The fund will be the first of its kind in Africa.

Makueni County’s climate fund goal is to set aside 50% of its portfolio as collateral for loans of up to 10 times the security sum. Enterprises engaging in ecosystems-based, adaptation-driven agriculture and clean energy value addition could benefit from such loans.

While Africa may have lagged in development in the past decades, the Paris Agreement provides an opportunity to accelerate socioeconomic development. Instruments such as the global SDGs, the AU’s Agenda 2063 and the Paris Agreement are creating the policy framework and operational paths to sustainable development, experts say.

So far Africa’s climate change implementation activities are encouraging. The questions are how much longer countries can maintain the momentum and how much support, especially financial, will come from abroad. On these, the jury is still out.

By: Richard Munang and Robert Mgendi

FinComEco, a fully integrated Financial & Commodities Ecosystem launches today providing services, financing, capacity building and enablement solutions.   The ecosystem will drive improvements in food security, economic diversity and financial inclusion through a socially responsible commercial delivery partnership. The goal is a sustainable and increasing improvement in the sophistication and living standards of smallholder farmers and their families in developing countries brought about by a venture, which links agriculture to the latest financial technology. It will initially focus on Africa.

“Creating markets, developing infrastructure and providing financing for farmers are key ingredients for transforming agriculture in Africa. These factors were necessary for transforming agriculture into a wealth-creating sector, generating income opportunities for farmers in rural areas .” – The African Development Bank (Note1)

Rt. Hon Mark Simmonds, Chairman of FinComEco, former UK Foreign & Commonwealth office Minister with responsibilities for Africa, the Caribbean, UK Overseas Territories, International Energy and Conflict Prevention, comments, “It is important to recognise each African country is unique with individual economic, political and social drivers.” He added “With FinComEco I believe we have a detailed strategy to support, improve and facilitate the full agricultural value chain improving lives, creating jobs and alleviating poverty.”

FinComEco will encourage growth by connecting the farmer with the exchange, financial infrastructure and national economy. This supply to demand chain also includes small-scale traders, brokers, storage, transportation, shipping, banks and buyers including multinationals. This will enable smallholder farmers to get a better price for their produce, and provide opportunities for further income growth, opening alternative added-value opportunities including e-commerce enabled enterprise.

FinComEco has already successfully proven this concept in Malawi at the Agricultural Commodity Exchange for Africa (ACE) through the GMEX Group. During 2016 substantial benefits were delivered to smallholder farmers with an average 31% increase in income from use of warehouse receipts and better price transparency with 47,000 registered to receive the latest market prices on their mobile phones.

FinComEco will either establish or reinvigorate local commodity exchanges underpinned by trading technology, electronic warehouse receipts and a complete mobile banking solution. It will also enable trade across multiple regions and deliver a holistic secure cloud-enabled financial agri-ecosystem in partnership with development organisations, governments, research bodies and the private sector.

Hirander Misra, Founder and Deputy Chairman of FinComEco and CEO of GMEX Group commented, “The aim of FinComEco is to match exchange trading capability, including derivatives, to physical growers. Also to add value through enabling manufacturing, support services and delivery contributing to additional local employment.” He added, “The initiative will allow smallholder farmers to thrive, enabled by best of breed technology, standards and inputs (including seeds, fertilisers and pesticides). This is coupled with a unique Agri-finance business model to solve credit and financing issues underpinned by improvements in logistics and warehousing.”

Steve Round, Director of FinComEco, CEO at Saescada and Chair at The Big Issue Foundation and Ecology Building Society commented, “There are massive financial inclusion and food security issues across the developing world with not enough being done in a cohesive fashion to address some of them,” he added, “I am delighted that our mobile electronic banking and payments system can add real value, in this unique integrated solution, to many millions of farmers delivering against many of the United Nations Sustainable Development Goals.

FinComEco is currently being syndicated out to strategic investors. Additional announcements on this and further Board and Management appointments will be made in due course.

Almost all of Botswana’s US$14.79 billion GDP is made up from the mineral extraction industries, with over 50% coming from diamond export revenues in the mineral sector, followed by livestock trading and others.

The challenges

The country is ranked 149 among 188 global economies in the World Bank’s ranking for competitiveness for doing business, which measures the ease of starting and run successful enterprise in Botswana.

Some of the most noteworthy challenges experienced by SMEs are inadequate marketing skills, business premises and other start-up business problems. This is according to  A 2002 research paper “Government Policy and Entrepreneurship Performance“ by the Department of Accounting and Finance at the University of Botswana.

In a 2012 editorial by the Sunday Standard, editor Outsa Mokone said  ”[Botswana's] regulatory framework is not only outdated but also excessive, intrusive, tedious and outright unfriendly”, and that It takes two full months to register and start operating a business in Botswana.

The country has an unemployment rate of only 18%, which is marginally better than its SADEC neighbors of South Africa where it is at 25%, Namibia at 29%, or Zimbabwe which is unknown.

The successes

Writing in the Washington Post in November 2014, the Head of Stanbic Bank in Botswana, Onkabetsi Morapedi said there was a noticeable growth, particularly in the last five years, and an increasing number of SMEs in the country.

“More opportunities have arisen in time, largely in the form of tenders or purchase orders,” Morapedi wrote.

And an overview of the country by the World Bank released in April 2014 shows that  Botswana has rapidly grown into becoming one of the fastest growing economies and moved into the ranks of upper-middle income countries from being one of the poorest countries in Africa since independence from Britain in 1996.

We look at the five ways Botswana stakeholders are assisting the country’s SMEs:

1. Government financial intervention and targeted interventions are working to assist a number of qualifying and value-creating SMEs. According to the Department of Industrial Affairs website, its mandate is to be the leading industrial development entity and support upcoming and expanding small ventures with financial assistance in industries like manufacturing, tourism, agriculture and other industries with fixed capital investment of between P75 000 and P2 million.

Policies like the Local Procurement Preference Scheme which encourages the development of manufacturing industry in the country and the Credit Guarantee Scheme which provides guarantees and loans to citizen-owned businesses and individuals.

2. Quick turnaround time in SMEs insolvency is what Botswana is best known for when it comes to supporting SMEs, according to research by Consultancy Africa Intelligence, a South African-based research and analysis institute. The institutes’ 2012 report shows Botswana ranks first on the continent for resolving insolvency and features well regarding recovery rate.

3. Diversification of agricultural products in the minority industries like agriculture such as manufacturing by-products like tanning, the process of treating animal skins to produce leather is a relatively new concept in Botswana, but that will propel the country’s industries forward.

This is according to the Organisation for Economic Co-operation and Development, an international economic organisation that stimulates economic progress and world trade, in their findings on the African Economic Outlook of 2008. Entrepreneurs have been encouraged and incentivised by government to look into agricultural product diversification as it opens up new markets, new economies and job creation.

4. Institutional support agencies address the need for coherent and holistic support for the development of small, medium and large scale enterprises through the soft window and package offered through the subsidiaries.

The Department of Industrial Affairs and Small Small Business Enterprise in Botswana, in their official website, claims to streamline SME support from institutions like the Local Enterprise Authority and Enterprise Botswana, which promote and facilitate entrepreneurship and SME development, skills education from the Department of Vocational Education and Training and the Botswana Bureau of Standards, for quality assurance of SME-manufactured products. But their relative success is yet to bear real fruits.

5. Coordination of SME policies administered by various stakeholders within government and between government and various stakeholders in the economy encourages government to play a leading role in buying locally produced products from SMEs, the Botswana Institute of chartered Accountants said in 2013. Presenting a research paper ”Promoting the Growth of Small and Medium Enterprises” at the Africa Congress of Accountants, the president of BICA Tshego Modise said these initiatives are led by Citizens Entrepreneurial Development Agency, Botswana Innovation Hub and the Botswana Institute for Development Policy Analysis. Modise further encouraged successful businesses to be show-cased as exemplary models.

By Siphelele Dludla