January 25, 2021

By Susan Payne, Holistic Agricultural Investments Group

From its early stages only 10 to 15 years ago, large-scale agriculture in Africa continues to develop each year to include many burgeoning operational projects, frequently supported by international investment and often in previously unproductive regions. While this growth has happened at not-quite-ox-pace speed, the development of agriculture on the continent has been increasingly spurred as a global sweet spot due to its temperate climates, soils providing a year round growing season and access to willing and available labour. As in all emerging markets, I expect that a higher level of investor attraction to, and confidence in, what Africa offers will result in a J curve whose eventual sharp uplift, when it happens, will be at an accelerated pace.

Food security and impact investing attracted me personally to work in Africa over a decade ago. As the co-owner and operator of farms in Africa, Holistic Agricultural Investments Group is a permanent capital structure that secures and develops under-utilised or distressed farmlands, increasing food, jobs and community support in the regions where we work. We have made investments which we are building up across the agri value chain as part of our portfolio of farming assets, with opportunities for vertical integration in the current projects. We put our money where our aims (and mouths) are in order to mobilise sites into productive food generators. Site locations are key, including as a minimum access to plentiful water sources, markets and good infrastructure.

Unbelievably, Africa continues to import US$40 billion tons of food per annum when it could, with financial support and investment in SME’s, become an active provider of food globally. Limited investment goes a very long way on the continent, and we regularly seek to partner on exceptional projects with groups that are interested in impact investing. Through these partnerships, we share our vision in producing, processing and distributing food, the result of which is reviving local communities. Projects and investments can be large or small, either as a share in the overall diversified portfolio, or focused on a single project to suit investors interests, which can be satisfied by a multitude of really exciting local opportunities.

Our farms, ranging between 3,300 and 6,700 acres, create substantial employment, which numbers increase alongside growing productivity. Our employees are often young and dynamic, with a large portion of female workers who are reliable and dedicated to their jobs. The farms grow a variety of foodstuffs, including bananas, cotton, sugar cane, wheat, maize, vegetables and peanuts, all for local consumption. While we favour biological assets, which are higher yielding and lower risk, we also recognise that certain basic crops need to be provided locally, like row crops and vegetables, hence the combination. We work with smaller, local groups, including villages and NGO’s, and also larger groups, including large international corporates and governments. Agricultural management experience aside, I rank local knowledge and personal relationships as imperative in doing business anywhere in Africa, where obstacles to execution are regular and delays frequent. Our management team has worked on the continent for over 30 years and speaks a variety of languages, including English, Afrikaans, Portuguese, and Shona, all of which are vital in moving projects forward.

At our sites in sub-Saharan Africa, our staff is hired locally and trained in-situ, and we also regularly take on nearby agricultural college students to provide them hands-on experience. Over the past decade, we have promoted the “impact” part of “investing” across a number of areas, installing village water pumps for people and cattle, discing land to assist local growers, teaching farmworkers to read and write in classes on-site, as well as repairing village classrooms, providing trainers, sports kit and bras for distribution locally, arranging sports camps for schools and food for orphanages and providing micro loans to employees.  There is always more to do, and initiatives launched are not for lack of ideas but simply limited by resources: local bank rates are prohibitive and upliftment therefore takes place where we see the greatest need as funding becomes available.

There will be a time, in the not-too-distant future, when Africa becomes more mainstream and the reality of what it offers will outweigh its detractions and increase its appeal to more widespread investment. In the meantime, agricultural investment here is not an overly crowded space. As I see large international groups, like Heineken, Tongaat Hulett, and the Norwegian government populate the areas close to our farms, however, it not only reminds me that we have been early movers, but that the picture is changing rapidly and will look considerably different 10 years from now, especially with the advent of renewable energy, which dramatically reduces costs. “Impact” benefits all ways, and can be equally positive for the investor, the immediate community, and the wider populations that benefit from increased food security. I expect Africa’s exports to the UK, the U.S. and the United Arab Emirates, to name a few, will grow considerably over the coming years.

Patience is vital in Africa, and, despite the regular background noise that business builders face on the ground, the greatest impact is now. I have lived through many extreme economic cycles in global emerging markets in my career and believe Africa’s time as a major international agricultural destination is coming, evolving year by year, reliant and underpinned by local women and investors looking to make a genuine difference alongside long-term profits.

ABOUT SUSAN PAYNE

Susan Payne has worked in global emerging markets for 30 years and in African agriculture for the past decade.  www.holistic-investments.co.uk

*All views, data, opinions and declarations expressed are solely those of the author(s) and not of Global AgInvesting, GAI News, GAI Gazette, or parent company HighQuest Group.