Commerce and conservation in Africa

A conservation lodge in Namibia

Much of Africa, you may be surprised to learn, is growing faster than the US. The economies of Kenya, Ghana, Botswana, Rwanda and Tanzania all grew by at least 4% last year. (US GDP growth was 1.7 percent.) But while modernization is lifting millions of Africans out of poverty, unchecked growth — of farms, ranches, mining and infrastructure — threatens Africa’s unsurpassed wildlife and wild places.

Can commerce and conservation coexist in Africa? A nonprofit called the African Wildlife Foundation (AWF) has set out to prove that they can do better than co-exist: It is going into business for itself to demonstrate that thriving commercial enterprises, if run right, can help protect wildlife and their habitat.

Last year–its 50th anniversary year–the foundation created an  investment company called African Wildlife Capital to raise money from investors in the US to support conservation-friendly businesses in Africa. African Wildlife Capital has raised about $3 million, all of it through its own board, and so far it has invested in three projects–an avocado farm in Tanzania, a livestock operation in Kenya and a tourism lodge in Namibia.

I met recently with Patrick Bergin, the foundation’s chief executive, to talk about the nonprofit’s decision to move into what is often called impact investing.  Bergin, 48, who grew up in Illinois farm country with eight siblings, joined the Peace Corps after college and has worked for the AWF since 1990.  The nonprofit has a budget of about $25 million and about 175 employees, most in Africa. Headquarters are in Nairobi.

Originally, the group focused on educating and training Africans to better protect wildlife. But it’s no longer enough, Bergin told me, to “go out to rural communities and wag their finger at people and say, you must understand that wildlife has economic value.” Most rural Africans are subsistence farmers, and they know wildlife as pests. “A couple of elephants in your maize field could destroy your crop in half an hour, and your family won’t eat,” he said. If people need more land to grow crops or graze cattle, they may have little choice but to encroach on forests. In recent years, the foundation has trained farmers to increase their yield, or made grants to help create new businesses, such as a goat farm or a tourism lodge, to help local people earn a better living, and thus prevent habitat destruction.

African Wildlife Capital will scale up those efforts. The company raised the money, in units of $250,000 each, from family foundations and high net-work individuals. Investors are promised a 3 percent return. “We’re looking for impact-first investors,” Bergin said. The fund expects to make loans of between $250,000 and $1.5 million to small and mid-sized businesses, beginning with agriculture and tourism.

Its first and biggest investment, a loan of about $950,000, went to the Rungwe Avocado Co., which has put together a network of about 2,000 farmers in the southern highlands of  Tanzania. It’s near a national park that boasts 45 varieties of orchids (!) and a small primate known as the kipunji, a species of monkey discovered less than a decade ago. As Patrick explained it, the company has farm which grows avocado seedlings, which are then sold to other farmers, which return the crop to the company’s packing plant. It made deals with British retailers Marks & Spencer, Sainsburg and Tesco to buy the avocados. In return for the loan, African Wildlife Capital obtained promises from the parent company and the farmers, who pledged to avoid poaching or cutting trees for charcoal.

Men with avocado trees in Tanzania

The other two investments are smaller. African Wildlife Capital loaned about $250,000 to a community-owned conservation lodge in Namibia, which needed capital to expand. It also made a loan of about $250,000 to the Ol Pejeta Conservancy in Kenya, for the operation of a cattle ranch.

The goal of all three investments is to underwrite businesses that provide people with good livelihoods and thereby ease pressure on nearby wild lands and wildlife.

“Most of the communities we work with are land rich and cash poor,” Bergin says.

It’s too soon to say whether these investments will pay off–for the businesses, for investors, for African workers and for the wildlife. But the model makes sense, and, unlike traditional philanthropy, it has the potential to scale.

Photo credits:

Namibia Grootberg Lodge by Philippe Clairo www.philippephotography.com

Men and Avocado Trees in Tanzania by Carolin Schmidt

 

Comments

  1. Lewis E. Ward says:

    Wonderful to hear about real success and sensitivity to the natural environment. Only through understanding and working with complex factors can we begin to develop conservation efforts that are commercially and culturally viable. Here is an article from Yes about some of the political, cultural and ecological problems. The Dark Side of the “Green Economy”
    http://www.yesmagazine.org
    Why some indigenous groups and environmentalists are saying no to the “green economy.”

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