Agribusiness as a Catalyst for Rebuilding the Economy

By Emmy Chirchir, Africa Enterprise Challenge Fund

Agribusiness as a Catalyst for Rebuilding an Economy

When conflict breaks out in a country, the economy is quickly brought to its knees. It disintegrates the structures and systems in society; it disrupts economic activities and livelihoods. Businesses and investors shut down. Once peace is restored it may take a long time for them to re-establish.

In Africa for example a majority of the population ceases to engage in any economic activities most important of which is agriculture and consequently there is low food production. Charlotte Petri Gornitzka, Director General of Sida acknowledges this: “Although 75 percent of the population in sub-Saharan Africa depends on agriculture for food and for income, the availability of food is still very uncertain and productivity remains low. Companies that could help develop and invest in agriculture are reluctant because of the high risks.” Catalyzing economic growth

Despite the high risks of doing business in countries that are emerging from conflict, these same countries present an opportunity for investment. TheAfrica Enterprise Challenge Fund (AECF) is a mechanism that invests in businesses that would otherwise not be successful without its funding because of the risk involved, among other reasons. “Investing in the agribusiness sector and funding innovative ways of providing rural financial services in countries that are emerging from conflict is one of the ways of rebuilding the economy. It also provides a source of livelihood for the population”, Hugh Scott, the AECF director.

With support from the Swedish International Development Cooperation Agency (Sida), AECF has opened a new competition especially for countries that are emerging from conflict. The focus countries for this competition are: DR Congo, Sierra Leone, Liberia and Somalia/Somaliland.

Calling on DR Congo, Sierra Leone, Liberia, Somalia/Somaliland

In this competition, AECFwill co-fund successful applicants with grants of between US$250,000 and US$1.5 million. Business ideas across the whole agricultural value chain and in all sectors including livestock for example production, processing, input supplies, and logistics as well as rural finance, information and other related service sectors are eligible.

The competition is open to for-profit companies only, whose ideas will have an impact on the rural poor, increase employment and productivity. African and international companies are invited to download the application form from our website ( and to apply. The applicant can be from anywhere in the world but the project must be implemented in one or more of these countries: DR Congo, Liberia, Sierra Leone, and/or Somalia/Somaliland. The competition will close on
15th June 2012.

For enquiries on the competition please do not hesitate to contact the AECF adviser: je**********@ae********.org" target="_blank">Jenny Lofbom . For general information on the AECF, please send an email to in**@ae********.org.

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2 Responses

  1. The AECF’s intention to help the poor in Africa by funding “business ideas across the whole agricultural value chain” is laudable.  People must have food and work.  The term agribusiness, however, creates concern.

    Agribusiness can be defined any way a country or development agency chooses.  Normally, however, the term does not apply to small farms and cottage-style food operations.  It is a term typically used for large or medium-scale farms and food processing activities that rest on standardized methods from existing science and technology, and that feed a large if not international food economy.

    Given where agribusiness is in the developing world today, all the intricate and unanswered questions it has put on the table, the powerful stimulation it has given to the local and organic food movements in the U.S. and Europe, and especially the challenges the West is having with obesity and chronic disease, particularly in the United States, it seems wise for  the AECF to consider carefully its definition of agribusiness and what types of private enterprise it will choose to fund.

    Method matters and quantity affects quality.  Small scale food production uses methods that enhance soils, engage people as owners rather than merely employees, and puts less heavily processed food products into the local marketplace for better health outcomes.  This is the motivation behind that segment of the USDA that supports the Know Your Farmer, Know Your Food programs, the Farm to School movement as well as many private efforts to rebuild local food systems in the U.S.

    The developing world seems a rather appropriate place, if not a perfect place, for developing local food systems.  In the interest of healthy food, energy-saving technologies, local ownership of natural resources, and the future stability of war-prone economies, we can hope that AECF will consider funding those businesses who hold a socially responsible intent is to help build health and stability on the back of an agriculture that nurtures and equally values human and economic health.  

    As we are painfully learning here in the West, health and agriculture and economy are inseparable in the long term.

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