NFTs Can Fight Poverty
NFTs, or non-fungible tokens, have taken the world by storm as an efficient way to invest and make a profit. In contrast to the also widely known cryptocurrencies such as bitcoin, each NFT is one of a kind, with unique pre-installed code and data. NFTs are not in typical commercial transactions. They are more like art pieces that people can sell, trade or buy. Since bidders and buyers use crypto graphics as displays of wealth and to represent property rights, it might be surprising to think that NFTs can fight poverty.

Twitter CEO Jack Dorsey sold his very first tweet as an NFT for $2.9 million with the intention of donating the sum to GiveDirectly, a charity that supplies cash to various communities in extreme poverty around the world. Pioneering this wonderful use of the NFT, Dorsey conveyed his profits to the Africa Relief Charity through GiveDirectly in March 2021.

What is GiveDirectly?

Paul Niehaus, Rohit Wanchoo, Jeremy Shapiro and Michael Faye founded GiveDirectly in 2008. As the name might suggest, this organization provides direct money transfers to families in need worldwide, especially in African countries.

GiveDirectly operates in Uganda, Kenya, Rwanda, Liberia, Malawi, Morocco, Mozambique, DRC, Togo and the U.S. So far, this program has distributed millions of dollars to 20,000 people within 197 villages and surveyed an extra 100 villages to act as a control group for research purposes.

On top of one-time donations, the charity offers various useful programs and opportunities. One of GiveDirectly’s most beneficial schemes is its Universal Basic Income program, through which willing donors may donate $1 per day per individual.

Donors have the option of supporting one individual, three individuals, 10 people or an entire village. Some recipients will collect ongoing payments for 12 years, making this a great giving opportunity for those who have just scored big with an NFT jackpot.

NFTs, Millennials and Charity

Most, if not all of the time, NFTs sell for large sums of money, leaving the seller with an instant and enormous growth in their wealth. NFTs typically range in price from almost millions to millions of dollars. According to Morning Consult, millennials are the generation most involved in collecting and selling NFTs; a shocking 23% of those involved in NFTs were millennials.

Additionally, millennials suffered the most financially from the COVID-19 pandemic because they also experienced the 2001 recession and the Great Recession. Between the Great Recession and the recession that the pandemic caused, millennials are no stranger to money shortages. They are either on an ongoing job hunt, just lost their job or are unlikely to see a raise. Consequently, it is no surprise millennials swiftly took advantage of the NFT money-making format.

Urging NFT sellers to give to reliable charities like GiveDirectly is thus one avenue through which NFTs could have a significant impact on global poverty. An increasing amount of millennials are telling miraculous rags to riches stories, similar to the stories of the most charitable celebrities and millionaires.

Since competitive bidding systems determine NFTs costs, it is easy to wait for an NFT to reach an exorbitant price. Mike Winklemann sold the most expensive NFT for $69 million. The craziest bids amount to sums the average millennial may never see in their entire lifespan.

Celebrities who come from humble beginnings are the ones who donate the most, most notably Brad Pitt and Kanye West. With this empathy toward the experience of living in a state of prolonged scarcity and uncertainty, along with Jack Dorsey and his sold tweet’s respectable example, more and more NFT sellers may use their gains to aid in fighting poverty.

How NFTs Can Fight Global Poverty

A rapidly increasing number of millennials and zoomers are gaining a keen interest in NFTs, so it is valuable to have conversations with peers about what the funds could go towards, such as charitable endeavors. The young populace in the United States should know that NFTs can help in the fight against poverty.

– Fidelia Gavrilenko
Photo: Flickr

Global poverty and social innovationAlthough the world was inching closer to eliminating global poverty prior to COVID-19, the pandemic’s lasting negative impacts exacerbated global poverty conditions all over the globe. COVID-19 was expected to push up to 115 million more people into extreme poverty in 2020, adding up to about 150 million by the end of 2021. However, there is hope for the resolution of global issues with the intersection of global poverty and social innovation. Stat Zero Ventures brings this intersection to life.

Stat Zero Ventures

With the prominent negative impacts of COVID-19 on poverty, the economy and ways of life, it is more important than ever to address the impoverished conditions that affect millions around the world. Combining entrepreneurship with issues of global poverty and social innovation, Marquis Cabrera, a leader in social innovation, launched a movement to accelerate progress toward poverty eradication.

Stat Zero Ventures uses innovative methods, including technology and venture capital, to aim for a world without poverty, pollution and diseases. Providing feasible solutions, the organization sponsors specific projects to accelerate these social goals. “Stat Zero Ventures invents, builds and invests in tech-enabled impact ventures” with the support of investors, international government agencies, celebrity offices and Fortune 100 companies.

Addressing Global Issues

Based in California, Stat Zero runs by the motto that “zero is the greatest number.” In other words, the company’s mission is to achieve a world with zero poverty, zero diseases and zero pollution. Through partnerships with a variety of organizations, Stat Zero supports impact ventures with diverse social, economic and environmental purposes.

At the intersection of global poverty and social innovation, Stat Zero unites governments with impact investors and social entrepreneurs who come together to solve pressing issues around the globe. Global issues of interest range from poverty alleviation to sustainability, with main focuses on “healthcare, energy, climate and sustainability, education, national infrastructure and social programs.” Thus far, Stat Zero has recycled more than 40 tons of plastic for carbon reduction and has given more than 100,000 people access to “digital medicine and finance” in the United States, Africa and Asia-Pacific.

Extended Reach

Additionally, the organization has extended its reach to include the goals of zero illiteracy and zero inequality. When choosing to invest in a social venture, Stat Zero ventures looks at the financials of the partnering company, assessing potential risks, the feasibility of the intended solution and whether the venture aligns with the “zero” mission.

Stat Zero provides industry experience to government authorities in China, Switzerland, Canada and Mexico. This expertise guides advice on environmental, social and corporate governance (ESG), investing in best practice strategies to rebuild local economies in these countries.

Technological Innovation and Global Poverty

Uniting challenges of global poverty and social innovation advances the ability to address issues of poverty, social equality and sustainability through creative outlets. Stat Zero forges strong technological partnerships with investment firms that allow for innovation of ideas that limit waste, build wealth and advance healthcare and educational access to those in poverty.

Advanced technology has the power to change the world, as seen over the last century of industrialization. Through greater access to information and resources as well as innovative, creative ideas, solutions are forged. With operations such as Stat Zero, partnerships have the ability to use advancements to achieve desirable social outcomes such as eradicating global poverty or increasing overall sustainability practices.

-Kylie Lally
Photo: Unsplash

The Benefits of Investing in Women
Gender equality, or rather a lack of gender equality, is not simply a historical problem. To this day, women all around the world face inequality. One of the most notable issues pertaining to gender inequality is the gender wage gap. Its impacts affect not only women but society as a whole. To end the gender wage gap and other inequalities, society must start to recognize the benefits of investing in women.

The Gender Wage Gap Explained

There are two types of gender wage gaps. The controlled wage gap refers to when a man and a woman have the same exact job in the same exact industry with the same exact qualifications. In this situation, as of 2021, women earn 98 cents per $1 that men earn. This seemingly small upfront difference builds up over time, and the pay discrepancy leads to very dissimilar outcomes for these two genders.

An uncontrolled wage gap is the second type. The uncontrolled wage gap refers to the overall difference between men’s and women’s wages. It does not matter what job it is, what industry one works in or if one works full- or part-time. The measurement takes into account how much each worker makes on average per hour each year. This gap is much more prominent—a woman makes 82 cents to a man’s $1 as of 2021.

Companies provide several “justifications” for why women receive less pay than men within the organizations, but actual reasons include employers’ implicit biases, a wage penalty that accompanies motherhood and a higher likelihood of women working part-time. This is based on if women have the opportunity to obtain higher-wage jobs within such companies. Often, women are unable to attend school to receive the qualifications necessary for high-skilled work.

These inequalities in labor compensation become more glaringly obvious when it comes to unpaid labor. Women are more than twice as likely as men to participate in unpaid work. Notably, the most frequent unpaid jobs women take on are domestic work and child care. In impoverished communities, women must sacrifice their education to fulfill the expectation to manage the household and raise children.

The Importance of Investing in Women

Beyond equality, investing in women provides a multitude of economic benefits. The unpaid labor women often take on can actually hinder the economy. Economists estimate that unpaid domestic workers—if paid—could constitute approximately 40% of a nation’s GDP. A lack of education for women also plays a role in stunting economies. When women receive education, economies tap into a whole new sector of individuals that bring new, innovative ideas to the table, which help economies grow. Further, studies show that for every 10% of girls enrolled in school in a developing country, the GDP increases long-term by 3%.

In addition to paying women for labor and educating women, it is imperative to give women advancement opportunities. Women make up approximately half of the agricultural labor force but less than 13% of landholders globally. If women obtain the same amount of land, technology and capital as men, there could be an estimated 30% increase in food production. In this way, empowering women could help to substantially reduce world hunger. On the more industrial side, studies show that both efficiency and organization significantly increase when three or more women enter senior positions at companies.

A Better Society For All

Decreasing the wage gap begins in three main areas: women’s unpaid work, education and health. When women in developing countries receive aid and money, the aid does not stop at just the direct beneficiary. Women are likely to extend the benefits to those around them; women tend to invest their earned money into their children’s education and health as well as their own. Giving women financial tools has economic gain for all and promotes economic justice.

The best way to ensure a fair economy is to invest in women, particularly in developing countries. Women should have the opportunity to work the same jobs, receive the same qualifications and have the same economic opportunities as men. Society’s way forward is through taking advantage of the benefits of investing in women.

– Becca Blanke
Photo: Flickr

Adjuvant CapitalGlenn Rockman and Jenny Yip are the leaders of Adjuvant Capital, an investment firm focused on public health. In February 2021, the firm announced a $300 million venture capital fund. The reason for raising this large amount is because the world is in great need of medical technologies and supplies and Adjuvant Capital wants to ensure those resources are accessible. The fund specifically works toward underprivileged and developing countries to ensure that those who would not otherwise have access to certain medical advances are getting the care they need. Multiple investors have pledged money to this fund, including the Gates Foundation, pledging $75 million to the venture capital fund.

The Venture Capital Industry

The venture capital industry has long since been overlooking new technologies in the medical field but Adjuvant Capital looks to change this in order to get the necessary medical resources to the people that need them. By investing in various companies, increased production will arise for new medical technologies that can help prevent or manage medical issues, from rare diseases to global pandemics. Many of the Adjuvant Capital investors are also contributing scientific advice and research as well as financial aid in order to cultivate the growth of wide-reaching medical resources.

Adjuvant Capital

The co-founders of Adjuvant Capital, Kabeer Aziz and Charlie Petty, have been global health investors in the past. Partners Rockman and Yip also have investment backgrounds, with Rockman being a former member of the Global Health Investment Fund. It is clear to see that these backgrounds have had a lot of influence over the firm’s current venture fund and can be seen further as Yip used to be a part of the Gate’s Foundation’s strategic investments group. The Gate’s Foundation is responsible for about 25% of the venture capital fund.

Although based in the United States, Adjuvant Capital commits to the most promising technologies globally, with investments in NigeriaBangladesh and China, among others. Recent financings include Beijing-based Yisheng Biopharma, which looks to resolve critical supply issues in the rabies vaccine market.

Medical innovations have been overlooked by investors for a long time, which is why this venture capital fund exists. Mark Suzman, CEO of the Bill and Melinda Gates Foundation, is quoted saying “there is an important role for investment capital to play in stimulating innovation and making markets work for the poor so that everyone has the chance to live a healthy, productive life.”

The investment into these innovations will not only help the underprivileged but it will create an effect that reaches everyone and promotes public health as well as growth. Among others, investors in the fund also include the Children’s Investment Fund Foundation, the Ford Foundation and the International Finance Corporation (IFC).

The Road Ahead

Adjuvant Capital’s investment fund could possibly produce life-changing healthcare solutions that have the potential to create significant global social impact. Adjuvant Capital is committed to ensure global access to healthcare and health equity worldwide. The ultimate goal is to bring quality healthcare to all by creating affordable, effective solutions that everyone has access to, regardless of income, region or socioeconomic status.

Grace Aprahamian
Photo: Flickr

 

The Philippines' Improved Economy
The Philippines is a developing nation located in the East Asian Pacific region. Although the nation is still developing, the Philippines economy is improving exponentially. According to the World Bank Group, the country is experiencing increased urbanization and the middle class of the country is growing. Businesses have experienced notably positive performance in the past few years. Real estate, finance and the insurance industry are all areas where the economy is having exceptional growth. However, the COVID-19 pandemic has slowed the economic growth of the Philippines. If the Philippines contains the virus on both a domestic and global level then the economy of the Philippines will rebound in late 2021 or 2022. The Philippines’ improved economy occurred in several ways.

Investing in Agriculture

Agriculture accounted for about 25% of the Philippines’ GDP in the 1980s. However, only 9.3% of the agriculture industry contributed to the economy in 2018. Yet, the agriculture sector employs about 25% of the Philippines’s workforce. Some important agricultural goods from the Philippines include coconuts, rice, corn and pineapples. In recent years, the agricultural sector’s low rate of growth has contributed to poverty and unemployment.

As a result, the government has begun supporting the Philippine Department of Agriculture’s programs. Some of its programs include improving food security within the nation. The World Bank’s Philippine Rural Development Project is providing external support to the agricultural sector. This project aims to improve infrastructure that is vital to agricultural production. Furthermore, improving agriculture is vital to the economy.

Improving Industry

The industry sector has been another contributing piece to the Philippines’s improved economy. Currently, this sector has currently been able to employ 18.4% of Philippine workers. Additionally, the Filipino government is attempting to increase the amount of foreign direct investment. It also plans on achieving this goal by working to improve the infrastructure of the nation. This will then attract the attention of possible investors. Manufacturing is another important industry in the Philippines. The Philippines is home to a variety of metallic resources. The mining industry itself has already brought different mining companies to the Philippines to conduct business. Mining businesses working in the Philippines include BHP and Sutimo Metal Mining Co LTD.

The Growing Service Sector

The growth of the service sector is another contributor to the Philippines’ improved economy. Around 60% of the Philippines’ GDP comes from this sector. In addition, the service sector also employs about 56.7% of people in the Philippines’ workforce. One vital part of the service sector includes business process outsourcing (BPO). The Philippines has an extremely large BPO market due to the United States aid.

The Philippines’ improved economy is noticeable in several ways. First, the income-per-capita saw an increase of 17% from 2016-2018. Additionally, the unemployment rate has decreased as a result of foreign direct investment into the country. The Philippines has become the 13th largest economy in Asia. Despite the challenges, organizations like EY and the World Bank note that the Philippines has the potential to have a flourishing economy.

– Jacob E. Lee
Photo: Wikipedia Commons

African American investorsMobile banking has had a dramatic upsurge in Kenya. Nigerian states need innovators for energy companies. Namibia and Ghana require finance reform for corporations. The housing construction market in Africa is booming. These are all opportunities encouraging African American investors to provide capital for the dynamic upsurge in venture capital and profitable markets in Africa. According to Andy Ingraham, president and CEO of the National Association of Black Hotel Owners, Operators & Developers, the wealth of Africa lies significantly in the hands of African Americans. He notes that more African Americans are doing more business with the Caribbean and Africa and are also partaking in philanthropic ventures.

African American Investments in Africa

There are two highly effective ways African Americans can boost Africa’s economy and create significant income. Does the potential business seek to export and import goods or seek to open and invest in production manufacturing on African soil? Danladi Verheijen, managing director at Verod Capital, a leading investment firm in Lagos, Nigeria, advises that “the bigger opportunity is being able to set up local businesses in Africa to make and produce locally manufactured products.” Consequently, this action results in increased local employment and self-sufficiency.

Choosing the right African region is also a significant factor in successful business operations. Rosa Whitaker, the first assistant U.S. trade representative for Africa, suggests that “There is much synergy between Africa and African American business because the region is growing in precisely the areas where African American firms are competitive.” Since African American companies made an estimated gross profit of $21.8 billion in the U.S.  industrial service sector in 2013, there is a greater chance a higher profit is obtainable in Africa where consumerism and competitive states are favorable.

Famous Investments

Ethnically from Senegal, Akon migrated at the age of 11 to New Jersey. Today, known as a multimillionaire artist and entrepreneur, Akon has invested $6 billion into Cadastral de Mbodiene park, along Senegal’s coastline. He aims to build a futuristic crypto city for people of all social classes. This investment will drape West Africa with significant economic progress, increasing employment and decreasing poverty.

Mark Anthony Hernandez and his team of African American investors arrived in Uganda with $300 million, seeking to share their business knowledge and boost the country’s health and real estate sectors. The team plans to invest in neurosurgery while expanding residential and commercial estates for the citizens.

As Liberia is seeking to increase its tourism sites, BET founder, Robert L. Johnson, partnered with Liberian officials and other investors to build a four-star hotel in Monrovia, the capital of Liberia. Through the project, he hopes to boost the country’s tourism industry and encourage other communities of color to focus their investments on Africa’s rising economy.

Inequality in the US

Due to the issue of African American equality in the United States, many critics argue that reparations on all aspects of Afro-American lives require reconstructive attention before African Americans can further progress elsewhere in the world. Furthermore, African Americans report having no or very little knowledge of the conditions in Africa.

Mass incarceration in communities of color holds a heavier weight against African American business prospects, according to Michelle Alexander, a highly acclaimed civil rights lawyer, advocate and legal scholar. In her book “The New Jim Crow,” Alexander highlights the long sequence of racial caste systems placed upon minorities, specifically black and Hispanic men. This has resulted in decreased growth in capital, corporations, family connections and the ability to vote. This reality is clear in many black families whose opportunities to invest shrink when receiving a sentence through unfair prosecutions or arrests.

The Road Ahead

Although it is important to see the hurdles set against the rise of African American businesses in the United States, it is equally important to provide capital to African regions that have opened their borders to African American investors. Large corporations with a high interest in emerging markets are encouraged to send workers abroad and gain experience, supporting growth in the United States and Africa.

Ayesha Swary
Photo: Flickr

investing in BrazilThere are numerous reasons to invest in foreign aid in general. That can include partaking in growing the global economy, promoting international human rights and opening donor countries to potential investment returns. What makes Brazil a particularly good market to invest in is its promising role in the global economy. There are several reasons why investing in Brazil is beneficial.

COVID-19 Response

As of January 2021, Brazil has the third-most COVID-19 cases worldwide. The Brazilian economy was not in its best shape at the start of the pandemic because it has not fully recovered from the 2014-2015 recession. This made the economy vulnerable to precarious economic shocks that resulted in increased poverty, unemployment and small business fragility.

The COVID-19 pandemic has left countries like Brazil with possible lasting economic damages. Many emerging and developing countries rely heavily on foreign aid for financial and humanitarian support. Offering foreign aid to Brazil will not only help pave the way for a domestic post-COVID recovery but also alleviate some of the negative impacts of the pandemic through humanitarian benefits.

Diversified Opportunities in Emerging Markets

The Brazilian economy is classified as an emerging market. Emerging markets are economies that are transitioning into a developed economy. Since the launch of the MSCI Emerging Market (EM) Index in 1988, which measures portfolio performances of emerging markets, investing in emerging countries proved to create new and diversified opportunities outside of common markets.

Market Expansion and Economic Growth

Since 2016, Brazil has shown an increase in GDP growth with approximately a 1.3% increase. In 2020, Brazil fell back into recession because of COVID-19. However, Brazil’s economy displayed growth and has played an important role in the growth of the Latin American economy as it makes up 35% of the Latin American GDP. It is approximated that the Brazilian market reaches 900 million consumers in just the Americas.

On how quickly the Brazilian economy rebounded, Bloomberg reports boosted domestic demand and exports with a 9.47% rise in economic activity index from July to September of 2020 in comparison to the previous months.

As Brazil recovers from COVID-19’s economic impact, it leaves opportunity for foreign investors to take advantage of Brazil’s growing market, especially with its low interests. Some of Brazil’s profitable sectors include real estate and agricultural goods like coffee, sugar cane, corn and soybean. Participating in these sectors expands Brazil’s domestic market and hence the world market size.

Geographical Location

Especially for the United States, Brazil’s proximity allows easier trade. For other advantages, Brazil’s geographical properties for the agriculture sector also make its commodities attractive. Approximately 28.7% of land is used for agricultural production which makes up more than 4% of the annual Brazilian GDP. Following China, the United States and Australia, Brazil has the fourth-most amount of agricultural land.

Foreign Investment Returns

Encouraging enterprises to invest in foreign aid can ultimately result in great returns. A common type of foreign aid for these corporations is Foreign Direct Investment (FDI). Through FDIs, corporations can potentially gain lasting interests, multinational consumers and flexible production costs. This type of foreign aid also brings developing countries like Brazil innovative technology, investment strategies, jobs and infrastructure from investing corporations of developed nations.

Foreign investment is critical to developing and emerging markets. Investing in Brazil promotes development and sustainability and also benefits foreign investors greatly. Furthermore, foreign investment assists economic recovery following unforeseen economic shocks like that of the COVID-19 pandemic.

Malala Raharisoa Lin
Photo: Flickr

Silk InvestSilk Invest is a private equity firm founded in 2008 that invests in emerging markets that demonstrate the potential for long-term economic growth. The largest private equity fund managed by the firm is called The Silk Africa Food Fund. Investments made from this fund target companies involved in food processing and distribution throughout Africa.

The Silk Africa Food Fund

The fund was started in June 2012 and focuses primarily on businesses that distribute food to African consumers. Countries that attract investment the most are those which are institutionally and politically stable enough to support long-term economic growth. Silk Invest is distinct from many other foreign investment funds that support the effort to reduce hunger in Africa in that it does not target agriculture but rather the distribution of food to consumers.

The three largest investments the fund is involved with are Nigeria’s Sundry Foods Limited, Ethiopia’s Nas Foods Plc and Egypt’s El Rashidy El Asly. Of these three, Nigeria’s Sundry has seen the most significant success and expansion following its partnership with Silk Invest.

The Success of Sundry Foods Limited

The company runs the popular restaurant chain, Kilimanjaro, as well as bakery and food catering services throughout the country. When Silk Invest first gave funds to Sundry in 2012, the company had seven restaurants open and a revenue base of around $3.4 million. In 2020, just eight years later, Sundry has 40 restaurants and a revenue base of around $34 million. The entrepreneurial effort of the company’s founder, Ebele Enunwa, has been instrumental in this progress.

Sundry is a company firmly rooted in supporting its fellow local businesses. Instead of setting up in the more commercial capital of Lagos, Enunwa established headquarters in Port Harcourt where he is a local entrepreneur. Its management team consists of local hires and its supply chain uses locally sourced raw materials, including chicken and rice from rural areas.

Sundry’s Impact and Potential

Sundry Foods Limited represents an example of the enormous potential which exists for businesses in developing nations when the proper investment is made. By providing capital to Sundry, Silk Invest gave the company the tools it needed to expand its operation. By doing so, Sundry has not only offered an improved service to consumers throughout Nigeria but has also stimulated its broader community’s own economy by maintaining a steady and even increasing demand for local products.

The impact made by Sundry’s growth is palpable. Over the last 10 years, the company has created over 2,000 jobs. Silk Invest’s Africa Food Fund is hugely impactful in the effort to reduce poverty in developing nations not only because of the direct benefit the invested capital provides to individual businesses but also because of the economic growth created in broader communities as an indirect result.

The Importance of Investing in Africa

This impressive progress was all stimulated by a $2.4 million investment. The high return for Silk Invest demonstrates that funding businesses in developing countries is not only beneficial to the growth and development of those businesses but is also a practical and sound investment for the firms offering the capital.

Investing in the effort to reduce world hunger presents impactful and beneficial opportunities for all parties involved. By establishing the Africa Food Fund, Silk Invest has committed itself to this effort while simultaneously supporting developing economies.

– Haroun Siddiqui
Photo: Flickr

Impact Investing in RwandaImpact investing is a growing industry with huge potential for combatting poverty around the world. The practice consists of firms and individuals directing capital to businesses and enterprises that have the capacity to generate social or environmental benefits. Traditional businesses tend to avoid such investments due to the high level of risk, low liquidity and general difficulty to exit if returns are not satisfactory. Most impact investing is done by particularly adventurous capitalists as well as nongovernmental organizations (NGOs) that aim to create social change. Impact investing in Rwanda, in particular, has yielded positive results.

AgDevCo

AgDevCo is an example of a social impact investing firm that aims to invest with the intention of reducing poverty and increasing opportunity in developing regions. Based in the United Kingdom, AgDevCo was incorporated in 2009 and has engaged in numerous projects since.

The firm’s specific area of investment is in African agriculture, where it believes that impactful investments have the potential to be a significant force in reducing poverty. The firm is currently investing in eight different African countries. Its portfolio includes $135 million worth of funds in 50 different companies. These investments have engaged more than 526,000 customers and have created or sustained more than 15,000 different jobs.

Uzima Chicken Limited

One of its investment projects is a partnership with the East African poultry company, Uzima Chicken Limited. Uzima Chicken produces and distributes the Sasso breed of chickens. Sasso chickens are resistant to disease and can feed through scavenging. These beneficial traits make Sasso chickens particularly useful in the struggle to reduce poverty in East Africa.

In 2017, AgDevCo invested $3 million to support Uzima’s establishment in Rwanda. As a result of the investment, Uzima gained funds necessary for rapid operational growth as a domestic producer of poultry. This is in line with the government of Rwanda’s strategy to achieve poultry self-sufficiency in two to three years. Uzima has also been able to expand into Uganda, where its business is rapidly scaling upwards.

The Uzima Business Model

The Uzima model of business involves the employment of company agents who raise the chicks for six to eight weeks before selling them to low-income households in rural areas. Such a model provides benefits to farmers, who can increase income through the sale of the more valuable Sasso chickens, as well as the agents.

Agents typically make a 25% profit from selling chickens. A survey of Uzima agents found that, on average, 27% of household income came from selling Sasso chickens. By providing a reliable source of extra income for employed agents, Uzima helps to alleviate the burdens of poverty for these people. As of 2017, the efforts had created 150 new jobs, 40% of which are held by women. Rwandan women have benefitted significantly from Uzima’s employment with 64% of women agents reporting that the income they earned from selling Sasso chickens led to a positive change in the decision-making power they had in their households.

Impact Investments for Poverty Reduction

Uzima’s Sasso chickens grow faster, live longer, produce more eggs and have higher market prices. They are disease-resistant and thrive in local, rural conditions. Out of all the customers buying these chickens, 54% live below the $2.50 poverty line. AgDevCo investment gave Uzima the capital necessary for operational expansion, and as a result, a greater quantity of impoverished people in East Africa could buy superior chickens and increase income. Uzima’s business also has clear potential for women’s empowerment, making it a great tool in the effort to reduce poverty and inequality in the region.

The impact investments made by firms like AgDevCo have clearly measurable impacts in impoverished regions, particularly noting the success of impact investing in Rwanda. This makes impact investment firms an important part of the global effort to reduce all poverty.

Haroun Siddiqui
Photo: Flickr

prosper africaAfrican markets claim six out of 10 of the fastest-growing economies in the world. Africa’s middle-class is likely to have an annual household consumption of $2 trillion before 2030, and by 2050, the U.N. predicts that Africa will be home to one-quarter of the world’s population. Prosper Africa is an initiative that strengthens U.S. investment in Africa.

US-Africa Ties

Nations such as Germany and China are competing for investments in Africa in preparation for its burgeoning role in the global economy. In the past 20 years, the United States has also attempted a number of initiatives to expand U.S.-Africa economic ties. Unfortunately, results have been modest because the focus has been on Africa as a foreign aid recipient rather than a strong future trading partner. However, Prosper Africa’s latest initiative, set to launch in 2021, offers hope for a more engaged economic partnership between the U.S. and Africa.

Prosper Africa

Prosper Africa was launched in December 2018 to “vastly accelerate” U.S.-Africa trade and investment through the coordination of 17 U.S. agencies and departments. This mutually beneficial endeavor not only opens market opportunities and grows Africa’s economic sustainability, but also protects the United States’ interests in the competition against other nations’ involvement in Africa.

Far from being a foreign aid program, Prosper Africa’s official website acts as a one-stop-shop for U.S. and African businesses and investors. It offers toolkits for African businesses and investors seeking to export or invest in the United States and vice versa for U.S. businesses and investors seeking to become involved in Africa. According to the website, Prosper Africa represents “a new way of doing business” through its portfolio of support services. To date, the initiative has serviced more than 280 deals valued at more than $22 billion. In keeping with its expanding ambitions, Prosper Africa’s budget request for the 2021 fiscal year rose from FY2020’s $50 million to $75 million.

Prosper Africa: 2021 Plans

On Nov. 17, 2020, USAID announced a new Prosper Africa trade and investment program for 2021. Valued at $500 million over five years, its goal is to expand Prosper Africa’s services. The four project objectives are increased trade, increased investment, improved business environment and providing support for USAID and Prosper Africa. A strong emphasis will be placed on private investment. By 2026, the program is expected to raise billions of dollars and create hundreds of thousands of jobs in both Africa and the United States.

It is still uncertain exactly what this program will look like. The program’s blueprints from Feb. 2020 describe its implementation approach fairly loosely. It aims to be flexible in shaping private sector demands concerning the facilitation and brokering of deals. Most of its transactions will take place directly through the firms and actors involved.

In addition to Prosper Africa’s website toolkits, local offices and trade hubs will provide further customizable services to align with the needs of different sectors. Some examples of services include investor matchmaking, transaction facilitation, targeted reforms and export support. Resource allocation will be determined by impact potential. Opportunities within the private sector will comprise the majority of activities and projects may be funded by grants or subcontracts. Throughout its services, Prosper Africa encourages African states to support economic transparency and rule of law.

Prosper Africa’s Chances of Success

Because Prosper Africa is effectively a harmonization of 17 U.S. agencies and departments, success largely comes down to effective cooperation. However, the initiative’s goals vary in difficulty. For example, Prosper Africa has already made impressive strides in streamlining its toolkits and providing specific U.S. services to aid transactions. However, more long-range goals, such as procedural reform and transparency, sector expansion, the rule of law and improving business environments may prove more challenging to achieve. However, from an economic standpoint, it is certainly encouraging to see Prosper Africa approach U.S.-Africa relations as an equal, viable trade partnership rather than merely an aid recipient.

Andria Pressel
Photo: Flickr