The agrifood sector stands at the heart of Africa’s economic vitality, employing 62% of the workforce and sustaining nearly a billion people (FAO, 2023a). While the African agrifood sector is projected to become a trillion-dollar market by 2030, it simultaneously grapples with several challenges (World Bank, 2022). The continent’s rapidly expanding population (projected to double by 2050), a heavy reliance on food imports, and the pressing threat of climate change, present key threats to the continent’s food security and nutrition, economic growth, and livelihoods (World Bank, 2022). To address these challenges, Africa’s agrifood sector must adopt an approach that ensures a healthy, sustainable, equitable, and efficient transformation.
Investment and Development Opportunities
Recent years have witnessed an uptick in global investment targeting Africa’s agrifood sector, recognizing its potential as a hub of opportunity. Many development organizations and impact investors are actively building funds to catalyze investments and deliver climate- and nature-positive outcomes in the sector. These include key players like the United States Agency for International Development (USAID), European Investment Bank (EIB), International Fund for Agricultural Development (IFAD), ResponsAbility, Clarmondial, and Acumen. Notably, a growing trend among these funds is the integration of more and more commercial capital.
Investors, traditionally focused on financials and company data, are increasingly interested in impact narratives and data. Many investors and funds are now mandated to concentrate on climate and nature impacts, yet the project pipeline is constrained, and the available data and capacity for impact and climate risk assessment are limited (OECD, 2022).
A Strategic Partnership: CLIC and ImpactSF
In response to these evolving needs, the Climate Shot Investor Coalition (CLIC) Agrifood Investment Connector (the Connector) and the CGIAR Hub for Sustainable Finance (ImpactSF) have formed a strategic alliance in the context of the Accelerating the Impact of CGIAR Climate Research for Africa (AICCRA) project. The collaboration aims to rigorously quantify and assess climate and nature-related risks and impacts of agribusinesses operating in Africa’s agrifood sector. These evaluations provide a clearer insight into the benefits and opportunities of climate and nature-positive initiatives, enabling investors to identify and prioritize their investments more effectively.
Recently, CLIC and ImpactSF assessed eight African agribusinesses for their climate risks and impacts, in preparation for a showcase at a dedicated climate and nature Agribusiness Dealroom session, organised in collaboration with AGRA, at the 2023 African Food Systems Forum (AGRF) in Tanzania.
For further details on the assessment process, please refer to the CLIC-AICCRA Info Note.
Outcomes at AGRF and post-AGRF
Throughout the five days at the AGRF Summit, the eight agribusinesses actively engaged with various investors, including organizations like USAID, resulting in over 30 on-site meetings. A notable outcome of these interactions was a business partnership between one of the agribusinesses and a major commercial bank.
Post-AGRF, several agribusinesses engaged with investors in various stages of the funding process. One agribusiness has initiated an application for grant funding from the UNFCCC Adaptation Fund, while several others have entered due diligence processes with venture capital providers and international impact investors. In addition to these developments, two agribusinesses, Agrosahas International and Miyonga Fresh Greens, received invitations to present their businesses at pitch events: Africa Climate Tech Pitch Day and AfricArena. Notably, Miyonga Fresh Greens was recognized at the AfricArena event, winning the ‘Best Climate Tech Start-Up’ award; a testament to the climate and nature risk and impact assessment work conducted.
Reflecting on Our Experience
This process highlights the importance of developing robust, science-backed methods to measure and evaluate climate- and nature-related risks and impacts. In our review of data and literature, we encountered the inherent complexity of impact measurement in agriculture, which underscores the necessity of a detailed and comprehensive scientific approach to avoid greenwashing.
Farmers’ and investors’ day jobs are intensive and leave little time and resources to measure environmental and social impacts. CLIC and ImpactSF are jointly developing simple, yet robust methods to measure and articulate the climate and nature impacts of agribusinesses. We are thereby targeting several key objectives: supporting these businesses in adopting and effectively utilizing these methods, guiding them in cost-effective data collection, and facilitating connections with suitable investors.
Fostering strategic partnerships across various actors, from science and finance, is imperative to support the thousands of small enterprises that will deliver the sector’s contribution. Such collaborations facilitate resource sharing, innovation, and best practices, collectively contributing to the sector’s resilience and growth.We are actively seeking to partner with other organizations and initiatives working in the area of climate- and nature-related risk and impact measurement. Together, we can leverage diverse expertise and insights to inform and enhance sustainable investments in the agrifood sector for impact at scale.
Get in touch with us:
ClimateShot Investor Coalition (CLIC): clic@cpiglobal.org
CGIAR Hub for Sustainable Finance (ImpactSF): pipeline.impactsf@cgiar.org
