You probably read this Reuters story on Monday. In the unlikely event that you didn’t, we shall quote it extensively here.
“Cattle have long been considered a measure of wealth across Africa – but it is not just farmers cashing in.
“A pioneering app in South Africa lets investors, eager to benefit from rising global beef demand, buy shares in a cow from their mobile phone for as little as 576 rand ($41) [Shs51,800]
“Self-styled “crowd-farming” company Livestock Wealth connects investors with small-scale farmers via its “MyFarmbook” app, where they can buy their own cow and receive interest rates of between 5 per cent and 14 per cent depending on where they put their money.
“Launched in 2015 with 26 cows, the project now includes more than 2,000 cows and has taken in 50 million rand (Shs2.6b), with 10 per cent of investors coming from outside South Africa.
“Groups of investors can buy a whole cow, while individuals can purchase shares in a pregnant cow or young calf.
“We can link small scale farmers to big markets by introducing private capital into the growing phase,” said 38-year-old Livestock Wealth founder and CEO Ntuthuko Shezi.
Beside bringing affordable capital into the livestock sector, such approaches allow people who want to be farmers, but don’t have the time and resources, to do so. Indeed “MyFarmbook” creator Shezi has his eyes on where the jackpot is. He is planning to expand his business into the produce market after launching a vegetable growing system.
In the long-term, for a country that has so many advantages of soil, weather, and arable land like Uganda, it could become a continental economic power by taking these kinds of approaches to creating prosperity, than the now-you-see-it-now-you-don’t-see-it bet the Kampala government has placed on oil.
With Africa’s exploding population, and nearly all countries on the continent importing large amounts of food because they can’t produce enough,including mangoes, tomatoes, and even ginger – Uganda could make a killing.
To do this, it needs to undertake something its peers have not done yet. First, pass a law that aggressively protects investors in such schemes, and punishes heavily managers and founders who steal the money. If I wanted to invest in Robert Kabushenga’s Rugyeyo Farm in Wakiso District, if he opened it to public participation, it would be a great help if there was something more than our friendship to ensure I will get money back. The country would also have to modernise the laws on insurance, and create instruments that allow such risky and very lucrative investments to be covered.
But that is only part of the story. As East Africa’s emerging agricultural powerhouse, a feat Uganda has achieved without much government investment (the State mostly puts its money in partisan and inefficient “wealth creation” schemes), it still boggles the mind that the country doesn’t have a commodity exchange where agricultural products are traded for the whole world to come and buy.
If thousands of investors are going to put their money in funds for agriculture, it is likely to succeed if they can see that there is a transparent market where the produce is sold.
Time for a Uganda commodities exchange is long overdue, but again, this is not something that the government should do. The best approach would be to put out an international tender, and sweeten the deal so that world leaders like the Chicago Board of Trade, or New York Board of Trade can find it sufficiently attractive for them to make an Africa entry.
But even all that is not enough. Already, even with the food we produce, some farmers lose up to 60 per cent in post-harvest mishandling and lack of storage. The Uganda Farmers Federation tells us in that some cases, losses in mangoes, oranges and pawpaw crops could reach up to 80 per cent of total production.
There is need to build up storage, and food science. There are growing local efforts to do the former, but they are petty. They are nothing like the industrial scale storage needed, and with the science, it is almost non-existent. If I were the President (thankfully I am not), I would get the billions being invested in developing a passenger car, and throw it into these projects, then have the car looped on to the end to develop a vehicle solution to transport the produce from this farming network.
This storage is something that can best be done through a cooperative structure, but not the old state-controlled ones infested by political appointees.
Finally, we need radical solutions to ensure an ecology that supports this. Uganda’s forest cover has fallen from 64 per cent in 1900 to 9 per cent today, and in the lifetime of Ugandans who are teenagers today, most of this country could turn into desert. Even God will soon not be able to farm profitably in Uganda.
Mr Onyango-Obbo is the publisher of Africa data.
visualiser Africapedia.com and explainer site. Roguechiefs.com.