SDGs in Africa #1 : Agriculture, Nutrition and Food Security

As I&P and FERDI recently published a study exploring the connections between the impact investing industry and the newly defined Sustainable Development Goals, we will be exploring the main development issues identified in the report: Fighting Poverty and Inequalities, Agriculture, Nutrition and Food Security; Healthcare, Water and Sanitation; Education, Energy Access, Infrastructure and Innovation; Sustainable Cities and Environment and Biodiversity.

Find more on the study "Investing in Africa's Development"

We will start with the issue of Agriculture, Nutrition and Food Security. Investing in agriculture is one of the most effective strategies for economic growth and poverty reduction in rural areas. The SDGs emphasize the need to ensure food security and improved nutrition, as well as guarantee incomes for small-scale farmers through sustainable agricultural practices.

Context

Africa contains 60% of the world’s uncultivated arable land, approximately 70% of the population is directly employed in the agricultural sector, which accounts for approximately 30% of the region’s GDP.

Most countries in Africa exhibit a large, under-resourced subsistence agricultural sector characterized by low productivity. Approximately 21% of Africa’s population is malnourished.

Financial Needs

USD 46 billion per year are needed in order to reach SDG 2. UNCTAD (2014) projects that 75% of agricultural investments can be privately financed, mainly investments to increase the productivity of commercial agriculture.

Impact investors' contribution

Many impact investors have investee companies in the agriculture sector. Some impact investors focus exclusively on this sector, including Injaro, AgDevCo, Agri-Vie, Doreo Partners, Root Capital or Voxtra to mention just a few.

Impact funds can contribute to SDG 2 in many ways by investing across the entire value chain, from farming companies to food processing, seeds, soil health products, crop protection companies, etc. A few examples:

• Alterfin grants loans to MFIs who in turn offer microloans to small local businesses and farmers
• AgDevCo has invested in EFTA Ltd, a Tanzanian finance company which provides SME businesses with equipment leases
• Injaro targets individuals who earn a daily wage of USD 2 or less; and smallholder farmers who cultivate less than 2 ha of land and provide/derive products/services to/from their investee companies. For example, Injaro has invested in SeKaf, a Ghanaian-based company that has built on a strong impact story and actively signed on 22 shea‐nut collector‐villages under its Ecocert/Organic certification

Further Reading

FAO (2015). “The State of Food Insecurity in the World”

UNCTAD (2014). ”World Investment Report 2014”