By Kimuri Mwangi
Winners from the CGIAR Food Systems Accelerator’s first cohort of agribusinesses from East and Southern Africa have been announced. The program supports agribusinesses in their climate-smart solutions to the farmers that they work with within their supply chains as well as to the broader ecosystem.
“We thought of how we could attract more capital into agriculture. I think everybody agrees in both the private and public sectors that this is a priority that has a huge impact economically and socially. There are still some challenges however around catalyzing that finance, particularly from the private sector. This is because of the risks in agriculture around production coming from climate and other risks so we have developed an acceleration approach that has been adjusted to the agriculture sector to sort out that risk to help money flow into agriculture and this is the Food Systems Accelerator,” says Mercy Zulu-Hume, Food Systems Accelerator Programme Lead.
She adds that the program focuses on Eastern and Southern Africa and as a pilot, they worked with four countries in the first year namely Kenya, Rwanda, Uganda and Zambia. Out of 849 applicants, 10 were chosen for the program. Four were from Kenya, two from Rwanda, two from Uganda and two from Rwanda.
“Today we’re having a pitch day where investors, banks and donors will sit with these businesses, interact, match make and have discussions about investments. For over six months we’ve offered technical assistance both on the climate and financial side. This includes how you position your business to investors on the specific things that they’re looking for. In essence, we are linking them with very expensive consultants that would be difficult for them to get that kind of knowledge from. We are taking that off their balance sheet and providing that knowledge to them. We will also give a risk grant to help them after they’ve gone through the program to scale their solutions,” opined Mercy Zulu-Hume. She was speaking at the CGIAR Centre in Nairobi on 26th October 2023 where the pitching took place. The Food Systems Accelerator program is funded through CGIAR’s Ukama Ustawi initiative and led by the International Water Management Institute.
Hauke Dahl, the Scaling Lead for Eastern and Southern Africa at the International Water Management Institute (IWMI), says that they provide science-based evidence for sustainability impact for the private sector and they can showcase that through scientific innovation connected with the private sector they create business models, processes and practices that contribute to the sustainable development of African food systems.
“Based on our long-term experiences we are trying to replicate some of our successful investment strategies. The agribusinesses that we are working with could be able to access some kind of funding but the major challenge with that kind of funding is that it could not work for them. This is because finding finance out there that is aligned with the business model of an agribusiness is quite a huge task. This is another thing that actually contributes to the default rate of agribusinesses for not being able to pay their loans and that’s why again they are perceived as a risk,” says Peter Kirimi, Snr. Financial Inclusion Manager IFDC-2SCALE.
The winners were Forest Africa (Zambia) who walked away with twenty thousand dollars, Yellow Star Food Processors (Uganda) Ltd. won eighteen thousand dollars while The Insectary Kenya Ltd walked away with twelve thousand dollars.