When Organic Africa’s Chief Executive, Dominikus Collenberg, founded the company in Zimbabwe in 2007, his initial objective was to prove the positive impact a small enterprise could have on vulnerable local communities.

That goal has been well and truly achieved. Leaning on his experience in organic farming, Dominikus has created a business that now works with 4,500 smallholder farmers and 7,000 wild collectors, boosting their incomes by 40% on average. And he’s not stopping there. “From the very start our intention was to always have a positive social, environmental and economic impact,” he explains on a video call from Organic Africa’s HQ in Harare. Key to this is focussing on commodities that are in high demand internationally and could be processed locally

“We decided only to produce things that could be distilled, pressed, dried or sorted so that more of the value created stays in the local area. We have processing centres in rural areas, often in some of the poorest places in Zimbabwe.”

The wider economic activity these centres stimulate is often transformative says Dominikus, who has seen struggling villages grow into more economically diverse and prosperous places, because of the jobs and raised incomes they provide.

The centres process commodities such as rosella, which is used as an ingredient in health drinks and foods, and for skincare products. Organic Africa introduced rosella to Zimbabwe in 2011 and it has become one of its core products. Rosella is relatively new to the country, which has given Organic Africa the opportunity to work with its farmer suppliers to ensure the crop is harvested, dried and packaged in a way that meets organic certification standards, opening the door to more lucrative markets.

Part of the company’s success is its eye for opportunities like this, and the ability to match what can be grown in specific areas of Zimbabwe with undersupplied international markets.

Another example is stinging nettles used for herbal teas, says Dominikus. As rates of production have dropped in Eastern Europe, Organic Africa has enabled farmers in Zimbabwe to fill the gap. The company also harvests and processes African bird’s-eye chillies, not for hot sauces or homemade curries, but for a medical products manufacturer which uses them to generate the heat in heat plasters. “Because we can produce chillies to a certain specification without using additional chemicals they meet European legislation for medical applications,” says Dominikus.

The demand for these kinds of high-quality products means large international buyers are willing to enter into long-term agreements with Organic Africa to secure the supply they need. In turn, Organic Africa provides its smallholder farmers and wild collectors with the economic security that is so often lacking in vulnerable regions.

In practice this delivers two transformative benefits, says Dominikus: “Number one, a family who works with us earns 40% more cash income than those that don’t. Number two, we offer them a contract to the end of the next season, so they know what they will be earning in a year’s time, rather than going to market and finding the price is depressed. In a country which suffers from price volatility, this provides the certainty they need to build their lives on.”

To ensure new crops can be viably grown in local conditions the company runs test trials, it also has a training centre where lead farmers can develop organic growing techniques and skills. Here they are introduced to the numerous crops Organic Africa processes, taught how to cultivate them and shown how to use the company’s traceability app. They then share this information with other farmers in their area who supply Organic Africa.

¹ The information provided herein is an opinion of the authors and does not represent the position of the Common Fund for Commodities or any of its Member States. The Information is not intended for distribution or use in the US and any jurisdiction or country where it is illegal or unlawful to access and use such information. The Information does not constitute investment advice and the Common Fund for Commodities denies all responsibility for consequences of acting upon the Information. The use of this information in making financial, management or other decisions of material significance is expressly prohibited. The Common Fund for Commodities disclaims all responsibility if you access or download any Information in breach of any law or regulation of the country in which you reside and shall not hesitate to invoke articles 42 et seq. of the Agreement Establishing the Common Fund for Commodities, which grant the Common Fund for Commodities immunity from jurisdiction.

The opportunity

Small and Medium-sized Enterprises (SMEs) in developing countries play a critical role in linking small farmers to highvalue markets. However, these agri-SMEs face challenges to fulfill this role due to a lack of capital and knowledge. This limits their ability to invest in expansion and productivity improvement, increasing incomes and creating jobs needed, often being the only formal employers in rural areas.

ACT Fund investments will drive profitability, enhance incomes and strengthen resilience in times of global market volatility. They will also drive the transition to climateresilient regenerative agriculture and focus on providing liquidity (the single biggest barrier to growth) to high potential agricultural SMEs

ACT’s combined offering of short-term liquidity, long-term investment capital and technical assistance unlocks the potential of agri-SMEs to be the backbone of rural economies and ultimate drivers of positive change in agricultural value chains.

Inclusive regenerative agriculture is at the heart of ACT’s transformative investment thesis. It drives economic, environmental and social impact. It offers a holistic approato farming which not only regenerates soil health but also revitalizes local communities and enhances positive effects on biodiversity conservation.

ACT will build upon the CFC’s three decades of experience financing commodity value chains, backed by its commitment to contribute USD 20 million in first-loss capital and offering expertise in Impact Investment and Technical Assistance management. ACT will have direct access to CFC’s proprietary and established deal flow which includes more than 400 loan requests per year.

Investment model

ACT will deliver an attractive balance of impact and returns to investors offering returns ranging between 1%-5%, coupled with high levels of verifiable impact. ACT will invest in established SMEs with annual revenues of over USD 1m through a range of short and long-term loans. This will primarily be in the form of trade finance, working capital and Capex loans, but ACT will also deploy smaller amounts of quasi-equity. The portfolio will be supported by USD 20 million of first-loss capital committed by the CFC, de-risking investments in ACT and demonstrating CFC’s strong commitment as sponsor and advisor to the fund.

The information provided herein is an opinion of the authors and does not represent the position of the Common Fund for Commodities or any of its Member States. The Information is not intended for distribution or use in any jurisdiction or country where it is illegal or unlawful to access and use such information. The Information does not constitute investment advice and the Common Fund for Commodities denies all responsibility for consequences of acting upon the Information. The use of this information in making financial, management or other decisions of material significance is expressly prohibited. The Common Fund for Commodities disclaims all responsibility if you access or download any Information in breach of any law or regulation of the country in which you reside and shall not hesitate to invoke articles 42 et seq. of the Agreement Establishing the Common Fund for Commodities, which grant the Common Fund for Commodities immunity from jurisdiction.