By THE AFRICA BAZAAR Staff Writer
July 10, 2014
International Finance Corp., a member of the World Bank Group, said it is teaming up with Global Agriculture and Food Security Program (GAFSP) to support the expansion of tropical fruit production and processing operations in Malawi.
The partners plan to invest $10 million in Malawi Mangoes operations, with each contributing $5 million to the project. Additional $5 million funding from the Dutch development bank, FMO, through the Dutch government fund FOM-OS, will bring the overall investment to $15 million.
The partners said the funds will go toward buying equipment, building a plant, including an expanded nursery, a new 1,200-hectare plantation, installation of climate-smart drip irrigation technology across the new farm and nursery, as well as expanded ripening chamber capacity and a second processing line at the processing facility.
Although it has always been a means to provide food security for households, agriculture and agri-business in sub-Saharan Africa within the last decade has caught the eyes of international and domestic investors looking for alternative investments opportunities that can yield high returns. Aside from the oil energy sector, agriculture is the fastest growing sector on Africa, presenting huge opportunities for both farmers and big agribusinesses.
Emerging middle classes in developing countries are also boosting demand for fruit juices and drinks. Malawi Mangos aims to meet this demand by increasing sustainable production and processing.
The organization plans to scale up operations and exports, bringing more jobs to the rural community and increasing opportunities for farmers to supply fruit to the company through its smallholder outreach and development programs.
The company also plans to increase employees fourfold over the next four years to about 2,600 full time staff. During this time, it also plans to increase the number of farmers who supply fruit to the company to approximately 6,000.
Malawi is one of the poorest countries in the world and 80 percent of its citizens live in rural areas. However, with the right investment and government program, the country only needs investment and access to markets to become a regional leader in high-value horticultural production and processing.
This current investment from IFC and FMO will put Malawi Mangoes on the path to achieving its goal of becoming a leading agro-processing company in Africa over the next five years.
German Vegarra, IFC’s regional head of manufacturing, agribusiness and services said, “Malawi is one of the poorest countries in the world, and 80 percent of its citizens live in rural areas. Sustainable agribusiness is an opportunity for developing countries to diversify exports, generate foreign exchange, transfer core skills, create jobs, and reduce poverty.”
Linda Broekhuizen, FMO’s chief investment officer said, “With this new investment Malawi Mangoes can start benefiting from economies of scale while at the same time empowering local people thus having a tremendous positive impact on the local rural employment in Salima District.”
Helping small farmers gain access to finance, agricultural inputs like seeds, and improved infrastructure is part of IFC’s strategy for improving food security and rural incomes. So far, in 2013, it contributed $4.5 billion to agriculture-related investments.
This funding makes it possible for IFC to invest in riskier projects with strong potential to promote food security and reduce poverty.
GAFSP was established in 2010 as a partnership among the governments of Canada, Japan, the Netherlands, the U.K. and the U.S to provide funds that aid alleviation of hunger and poverty among poor developing countries. The company takes up where emergency and recovery assistance leaves off, targeting transformative and lasting change in agriculture and food security within poor countries.
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