How African agribusinesses can attract new investment by leveraging impact measurement in climate adaptation
The absence of standards for impact measurement highlights the need to develop and strengthen capacities for private sector actors to articulate and report contributions to climate change adaptation and climate-smart agriculture.
The technical support provided by AICCRA partnerships through its accelerator programs in Zambia, Senegal and elsewhere has equipped small and medium enterprises (SMEs) in the agribusiness sector with the skills necessary to identify, prioritize, and track CSA activities, integrate them into their business models, assess financial viability, and assess impacts on end-users, especially farmers.
Building on its success in Zambia in 2022 to boost private sector investment in smallholder agriculture and scale climate-smart agriculture (CSA), similar Accelerator Programs have been launched in 2023 in Senegal with the Gender-Smart Accelerator, and in Kenya, Uganda, Zambia, and Rwanda through the Food System Accelerator under the sister CGIAR Ukama Ustawi Initiative.
These accelerator programs leverage cutting-edge scientific innovation to make SMEs investor-ready. Through tailored technical assistance, participants develop competitive business plans that show clear value to farmers and the environment, and ultimately pitch their concepts to win de-risk grants and additional investment from investors involved in the program.
An innovative approach to measuring impact
AICCRA's technical assistance for accelerator participants extends beyond business readiness, focusing also on impact measurement and tracking. In this approach, over the course of six months, SMEs collaborate with scientists to distill the social, economic, and environmental impact of their investments, in a climate change context. Rooted in user-centered design and based on holistic impact management, this approach leads to the development of CSA impact pathways that offer a dynamic vision for change. These impact pathways articulate a coherent narrative about the business’ impact on climate-smart agriculture pillars including:
Improved farmer productivity and food security;
Enhanced resilience and adaptation to climate;
Climate change mitigation - and key actions and results to achieve these.
Impact pathways have practical applications as they directly align with the business value proposition and serve as cornerstones for defining fit-for-purpose key performance indicators and metrics. In addition, impact pathways facilitate the uptake or a more adaptive management strategy, empowering SMEs to pivot as needed towards new impact or outcome areas, incorporate additional core activities, and effectively respond to evolving, unforeseen future circumstances. In a combination of self-guided learning activities, interactive learning sessions, one-on-one dialogues, and drop-in “lab sessions,” this technical assistance model created an environment for shared learning and growth for each accelerator cohort.
Why the need for enhanced capacities for impact measurement and tracking?
Information on the performance of adaptation investments can help businesses grow and thrive in various ways. Measuring and tracking their social, environmental, and economic impact on smallholder farmers is crucial for SMEs to build accountability and transparency, ensuring sustainable practices. Impact tracking can help quantify the benefits, fortify supply chain resilience, attract additional investments, and refine business models, fostering overall improvement and competitiveness.
The absence of standards for private sector actors to articulate and report specific contributions to climate change adaptation and CSA highlights the need to develop and strengthen capacities in this domain. Science plays a pivotal role in establishing robust frameworks and methodologies for effective measurement and reporting, providing a foundation for informed decision-making. Commencing this journey with SMEs is logical, given their widespread presence across Africa and their direct engagement with smallholder farmers, who are often the ultimate beneficiaries of these investments.
What have we achieved so far?
In 2022, under The ACCRA Accelerator Program in Zambia, fourteen SMEs received training on measuring CSA performance, developing impact pathways, and articulating and including relevant tracking indicators. Building on these valuable learning experiences, in 2023 the initiative expanded to a new cohort of ten SMEs under the separate but related CGIAR Food Systems Accelerator program.
The technical support equipped SMEs with the skills necessary to identify, prioritize, and monitor CSA practices, integrate them into their business models, assess financial viability, and evaluate impacts on end-users, especially farmers. Testimonials from participants emphasize the program's impact on changing mindsets and building skills, driving financial viability and ultimately having positive impacts on end-users. George Maina from Shamba Records Ltd. in Kenya shared that:
“[Before the trainings], we had different interpretations of how to measure our impact. Through the program, we were able to get a deeper understanding of what our impact can mean in the short-term and in the long-term. We’ve been able now to make our impact journey more elaborate and more specific. In terms of social impact, we’ve been able to monitor yield all the way to improvements in income and livelihood. In terms of environmental impact, we’re using crop calendars, to support monitoring and improving management of soil health along the process.
She added that:
"We try to provide feedback to the farmers in terms of the short-and long-term effects. The painpoint-output-outcome structuring was very helpful, it gives you a good clear thought process. At the end of the day, it’s a business, so you can only handle so many things, but having this framework helps to give you direction in the day-to-day and connect to the longer-term impacts. The overall program is an eye-opener, it opens your mind how your business can become more sustainable considering your impact.”
The program provided technical support as well as facilitated cross-country exchange, amplifying benefits beyond the AICCRA project's ‘focus’ countries of Senegal, Mali, Ghana, Kenya, Ethiopia and Zambia.
Specific opportunities were created for SMEs to build their networks, engage in convening spaces, and gain value from accessing both peers and experts to build awareness and shift mindsets around opportunities moving forward. Safina Mukagatete from AGGREGATOR TRUST LTD, Rwanda reflected that:
“Within the team, now we have the skills and knowledge we need [and it was key] to learn from others that are doing [CSA] in different countries [and hear about] some of the practices and investments that would be around to support them in different ways - like having greenhouses, having cheap irrigation systems, focusing on regenerative agriculture.”
Lessons for future endeavors
As we reflect on the journey of these accelerator programs, it's clear that the synergy between scientists and agribusinesses holds immense potential for transforming African agriculture. The strides made in impact measurement and business readiness underscore the importance of continuous innovation and collaboration. At these trainings, one-to-one engagements and visualization tools proved effective, fostering skill development and networking. The challenge ahead lies in deploying indicators cost-effectively to track impact, a vital yet resource-intensive aspect that remains to be addressed.
While these experiences were positive, challenges in the short timeframe for support and unique business models surfaced. Recognizing the need for tailored assistance, AICCRA aims to scale up technical support, deepen collaborations, and further scale innovative engagement methods like "lab sessions." AICCRA remains committed to building further support for SMEs, overcoming challenges, and driving positive change in the agricultural landscape. In the dynamic interplay of science and business, the future looks promising as we collectively strive to enhance the lives of small-scale producers across the continent.
Authors
Andreea Nowak - Alliance of Bioversity - CIAT
Heather Zornetzer - Glocolearning
Sabrina Trautman - KandS Collective