Proven power of philanthropists
Blossoming business network helps East Africa
Philanthropic donations enabled Wageningen University & Research (WUR) to help owners of small and medium enterprises (SMEs) in East Africa build up a network in the agri-food sector by setting up the African Agribusiness Academy (AAA). This is proving good for both the entrepreneurs and for rural communities. “The income of more than one million small farmers has gone up by a third,” says Bram Huijsman, former director of Wageningen International at WUR. He has been involved in the AAA since its inception in 2008, together with former Wageningen Ambassador Piet Heemskerk.
WHY THIS RESEARCH
Local economies in Africa can benefit from a stronger supply chain linking farmers to the market. Encouraging entrepreneurship and collaboration means food products can be made accessible to local inhabitants and the producers become less dependent on large-scale export.
Thanks to this project, independent local networks of business owners have formed in several African countries who help one another to bolster the local economy and improve the position of farmers.
A fine example of the kind of thing the AAA makes possible in East Africa was a week-long get-together that took place in the Ugandan capital of Kampala in early October 2018. This saw 150 local agribusiness entrepreneurs come together at their own expense to share knowledge and experience, and make trade deals worth over 1.2 million dollars.
The AAA is a network of SMEs in the agri-food sector in East Africa, set up in 2010 at the initiative of the Wageningen Ambassadors and WUR. Thanks to Food for Thought (2013-2017), a University Fund Wageningen fundraising campaign, the initial business club was expanded into an autonomous member organisation led by an African team. Philanthropic partners (private donors, foundations and companies) invested two million euros in the new organisation, the Dutch government doubled that amount, and AAA members themselves contributed in money and in kind.
An African farmer with his harvest. Photo: Shutterstock
The money was used to help AAA members with business plans, training and engaging WUR experts to support the establishment and expansion of the network. At the end of the project, the organisation, which has been completely autonomous since the end of 2017, received a further one million euros from the Dutch government (the Directorate-General for International Cooperation).
FIFTEEN BUSINESS CLUBS
The AAA is now active in six countries – Kenya, Uganda, Tanzania, Ethiopia, Malawi and Rwanda. A secretariat in Kampala led by director Farid Karama steers the organisation and supports the country branches. Fifteen business clubs are up and running in the six countries, where members get together and where training and workshops take place.
Karama, a Ugandan, has been a member of the AAA since 2011. He was enthusiastic about the entrepreneurs’ network and their capacity to help each other grow from the start. The AAA has changed the lives of many entrepreneurs he says. “They gained access to financing through better business plans. Between 2013 and now, companies have grown by an average of 30 per cent thanks to deals among them, improved marketing, branding, and support they got in financing and management. Strong mutual trust has grown too, making it possible to share knowledge, carry out joint marketing and buy packaging together.”
Network activities run by the African Agribusiness Academy in East Africa. Photo: AA-Academy
The AAA may be a business association, but its ultimate goal is “to contribute to economic growth and improving farmers’ incomes and food security in Africa,” says Karama. One condition for membership is that the entrepreneurs work with small, local farmers. That approach, stimulating rural development by supporting SMEs in the agri-food sector, appears to work. “In the period since 2013, the income of more than a million small farmers who supply AAA members has gone up by 35 per cent.”
“Large sums have been invested in the AAA project, but if you look at the impact it has already had on farmers, that is certainly justified,” says Bram Huijsman, former director of Wageningen International at WUR. He came up with the idea of the business club in 2008, and has been involved in the AAA ever since, together with former Wageningen Ambassador Piet Heemskerk.
ENTREPRENEURS DICTATE THE PACE
“We wanted to stimulate entrepreneurship in Africa in the supply chain between farmers and the market,” Huijsman adds. “The SMEs form a crucial link in that chain. We initially thought that this was such a good idea that it was bound to take off. But that is not how things work. Building up a member organisation is a long-term process. You cannot go faster than the local momentum. The entrepreneurs have to build it up themselves. We coach, but they have got to do it. So they largely dictate the pace.”
Local economies in Africa can benefit from a stronger supply chain linking farmers to the market. Photo: AA-Academy
The development of AAA has gained momentum. As of 2019, the AAA has 260 paid-up members. Karama’s ambition is to grow to 500 members in 2020, initially in the current six countries, but farmers in Ghana, Zambia and Nigeria have shown interest too. AAA also recently started offering funding for loans of between 2000 and 20,000 dollars, without requiring any security. The money for this comes from a number of philanthropic partners who contributed to the Food for Thought project.
Another sign that the AAA has reached maturity is its growing influence. The organisation is recognised by the governments of the six East African countries as a representative of SMEs in the agri-food sector. “We join the conversation about agribusiness policy, entrepreneurship and trade issues,” Karama underlines. “Many people and organisations follow us and appreciate what we do. Our visibility is growing.”
This is a revised version of an article that previously appeared in Wageningen World.