May 24, 2013

Commentary - Supporting Business-led Agricultural Development in Africa

This post is part of a series produced by The Chicago Council on Global Affairs, marking the occasion of its annual Global Food Security Symposium in Washington, D.C., which was held on May 21st. For more information on the symposium, click here. Follow @globalagdev and #globalag on twitter to join the conversation.


By Helen Mant

Helen Mant is Vice President at the Initiative for Global Development (IGD), a nonprofit that engages a global network of corporate leaders to reduce poverty through business growth and investment in Africa.

At the Initiative for Global Development (IGD), we believe business-led development will have the greatest socio-economic impact and be the most sustainable over time, since, by making products and services accessible to those in frontier markets, poverty will be reduced based on economic growth, not development assistance only. This is particularly true in agriculture, as companies increase investments in inputs and training for farmers, processing capacity, and marketing and distributing, in the process transforming subsistence, small-scale farming into commercial enterprises.

While companies are prepared to lead in agriculture investment, many of the challenges-inadequate infrastructure, poor policy environment, and a shortage of viable investments-require alignment with the work of donors, nonprofits, foundations, and investors. To address the challenge of building value chains that center on the business case while collaborating with other stakeholders, IGD, at our recent Frontier 100 Forum in Cape Town, launched IGD AGINVEST.

IGD AGINVEST is a completely new approach to economic development, as it flips the model to one that starts with the expansion strategies of IGD’s unique network of investors and operating companies, all of which have the vision, innovation, in-country operational expertise, and capacity to play a transformative role in African agribusiness. Establishing a commercially viable value chain based on our members’ investment priorities, from the farm gate to the store shelf, IGD’s agriculture team also identifies the capacity and investment gaps within the value chain, utilizing our extensive contacts with donors, foundations, nonprofits, and other commercial organizations to identify partners to fill the gaps. By placing stakeholders from many different sectors around a full value chain, we translate the high-level commitments of those organizations into actionable and measurable development and investments. As IGD is facilitating these value chain-based partnerships, we will also be capturing the social and economic impact through our igdIMPACT, a business-oriented impact measurement framework, allowing the partners to quantify lessons learned and hone in on best practices.  

The same week IGD launched AGINVEST in Cape Town, I attended a number of events where the sentiment of prioritizing business-led development was echoed, including the Grow Africa Investment Forum and the “New Africa: From Growth to Jobs” report launch IGD co-hosted with Business Action for Africa. In the report, IGD Frontier Leader James Mwangi, CEO and Managing Director of Equity Bank Limited, described how his business has grown to nearly 8 million consumers while being a leader in developing the financial services sector. With Equity Bank’s mission to be financially inclusive, especially focusing on low-income consumers, in ways that are both socially and economically empowering, Mr. Mwangi wrote: “Using innovative financial products and services supported by social impact programs like financial literacy training for youth and women, we have enabled growing numbers of previously unbanked customers—from smallholder farmers to women entrepreneurs—to access the capital needed for a better life and future, driving business expansion at home and helping spark broader economic growth throughout the region.”

An example of our approach, and the value of cross-sector collaboration, is illustrated through our work with IGD member Seed Co Limited, Africa’s largest proprietary seed breeding, production, processing, and distribution group. Seed Co is a founder of the Last Mile Alliance, an innovative model that brings together commercial partners (providers of high-quality farm inputs, financial services, and insurance), existing agro-dealers, foundations, and donors to create a cost-effective rural distribution network to reach smallholder farmers in Tanzania, delivering both commercial success and development impact at scale. IGD has supported the Last Mile Alliance by connecting Seed Co to potential corporate partners and donors, advising on development proposal writing and positioning, integrating impact measurement into the concept and planning, and communicating to a range of external audiences the value of the Last Mile model and its potential for replication.  This collaborative effort is expected to reach 100,000 smallholder farmers with improved inputs and training through the initial 20 distribution centers, increasing food security and resilience through tripling crop yields, while also allowing Alliance partners to reach new customers in remote rural areas.

By collaborating with other commercial partners, donors, and foundations, the Last Mile Alliance has been able to create a value chain that is commercially viable while improving the economic situation of those all along the value chain, including smallholder farmers, agro-dealers, and processers. Through IGD AGINVEST, we welcome the support of additional partners, from all sectors, to assist in transforming African agriculture by building business-led value chains that sustainably result in the greatest socio-economic impact.

About

The Global Food and Agriculture Program aims to inform the development of US policy on global agricultural development and food security by raising awareness and providing resources, information, and policy analysis to the US Administration, Congress, and interested experts and organizations.

The Global Food and Agriculture Program is housed within the Chicago Council on Global Affairs, an independent, nonpartisan organization that provides insight – and influences the public discourse – on critical global issues. The Council on Global Affairs convenes leading global voices and conducts independent research to bring clarity and offer solutions to challenges and opportunities across the globe. The Council is committed to engaging the public and raising global awareness of issues that transcend borders and transform how people, business, and governments engage the world.

Support for the Global Food and Agriculture Program is generously provided by the Bill & Melinda Gates Foundation.

Blogroll

1,000 Days Blog, 1,000 Days

Africa Can End Poverty, World Bank

Agrilinks Blog

Bread Blog, Bread for the World

Can We Feed the World Blog, Agriculture for Impact

Concern Blogs, Concern Worldwide

Institute Insights, Bread for the World Institute

End Poverty in South Asia, World Bank

Global Development Blog, Center for Global Development

The Global Food Banking Network

Harvest 2050, Global Harvest Initiative

The Hunger and Undernutrition Blog, Humanitas Global Development

International Food Policy Research Institute News, IFPRI

International Maize and Wheat Improvement Center Blog, CIMMYT

ONE Blog, ONE Campaign

One Acre Fund Blog, One Acre Fund

Overseas Development Institute Blog, Overseas Development Institute

Oxfam America Blog, Oxfam America

Preventing Postharvest Loss, ADM Institute

Sense & Sustainability Blog, Sense & Sustainability

WFP USA Blog, World Food Program USA

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