In recent years, African economy has seen efforts to transition toward greener models, thanks to the expansion of circular economy from the developed world, and the adoption of sustainable development policies globally. Known to have the second-largest landmass and stretching to approximately 8,000 km – 5,000 miles –, Africa possesses immense and diverse resources, largely unexploited. As climate crisis and Covid-19 threaten not only the livelihood of inhabitants of the continent, but also that of their environments, it becomes crucial to pay closer attention to the importance of biodiversity in trending socio-economic activities. Particularly, foreign partnerships for the development of agrihood and home biogas projects are increasingly determinant for Africa’s economic transformation and climate adaptation and mitigation. The present piece discusses the impact of current foreign partnerships for investments in agrihood and home biogas in Africa, and how corporate governance plays a central role in promoting sustainability and profitability.
Outlook on Agrihood and Home Biogas Investments in Africa
Agrihood is a socio-economic system that integrates agrarian activities into residential neighborhood. According to the Urban Land Institute, investing in agrihood presents various benefits ranging from sustainable socio-economic and environmental well-being to return on investments. While the term “agrihood” was first used around 2014, some features of agrihood were already present in African cities and particularly in their slums long ago, largely restricted to family units. In Kenya, like in many other sub-Saharan African countries, Various low-income families grow crops within portions of their own lands, and they harvest products – such as corn, cassava, or tomatoes – that were either consumed directly in the household, or sold at marketplaces, or it was – for most part – a combination of both. Although this household-based economic activity still maintain a traditional approach, it gradually increased in scale while changing the appearance and life of many slums on the continent. However, economic hindrances of the current pandemic added to environmental devastations caused by climate change have limited the resilience capacity of many African households, and increased risks of long-term food insecurity.
The latter circumstance gives the opportunity to rethink partnerships between foreign advanced businesses, local businesses and governments – for housing and agricultural services, financial aid, and technological advancement. In fact, foreign partnership for agricultural transformation is no stranger to African economic life, as it has seen the engagement of various international actors – including the Bill and Melinda Gates Foundation, Rockefeller Foundation, USAID and UKaid among others – in the Partnership for Inclusive Agricultural Transformation in Africa (PIATA) in recent years.
As agriculture is merging continuously with social life, agrihood is presented as a more organized approach to promote both sustainable households and agrarian businesses in Africa. Traditional partnerships often result in forced displacements of people living in outskirts of African cities or in rural areas by local authorities, to exploit their lands for privatized agrarian projects. This causes a considerable dispossession of lands and loss of income in poor households, which in turn fuel public anger and reprisals. Thus, considering alternative and more inclusive initiatives such as agrihood investments become crucial in the development of partnerships for African agricultural projects, and ensuring that the livelihood of local inhabitants remains a priority.
While international collaborations for agrihood projects are yet to receive a booming attention on the continent, it is clear that it presents better sustainability features – in terms of food security and empowerment of smallholder farmers, and housing – than traditionally harmful partnerships. Agrihood projects such as the Crossways Farm Village (a 520-hectare “rural new town” set to support about 3000 individuals in communities of Thornhill, South Africa) was depicted as a first success of its kind in the country. According to Dr. Chris Mulder, founder and CEO of CMAI Architects, Crossways is designed to promote a circular economy, as its mission focuses on sustainable rural development, food security, poverty alleviation and training, and job creation. Unlike South Africa, many sub-Saharan African countries are short on technical, technological and financial assets to bring such innovative projects to life; therefore, this creates avenues to push foreign partnerships in the region.
In sub-Saharan Africa today, firewood and charcoal are still largely consumed as fuels for cooking in low-income households. This was exacerbated by the surge in gas prices, forcing households and small local businesses to emphasize these traditional uses. Needless to say, these are unsustainable uses, and rather harmful in many ways for the environment and its inhabitants. However, they are also the most accessible and affordable means to produce the needed energy. Considering these risks and the rapid progression of climate crisis, it becomes urgent to invest in cleaner, sustainable and affordable solutions such as home biogas.
Biogas, in a general sense, is a mixture of various gases, mainly carbon dioxide (CO2) and methane (CH4), extracted from organic wastes (plants, foods, manure, crops) then converted into bioenergy. As such, home biogas is basically the application of this process for household utilities (electricity, heating, water system and cooking). Unequivocally, there is a perfect chemistry between backyard agriculture and home biogas, where one produces sustainable foods and the other converts organic wastes into energy. According to the Organisation for Economic Co-operation and Development (OECD), African cities will be home to “an additional 950 million people” by 2050. With this prediction, the growing African population is likely to increase dramatically its demand of food, housing and energy in coming years.
While biogas was already in use across many households on the continent decades ago, it is still not as widely used as charcoal, firewood or petroleum. Nevertheless, it is crucial to recognize that investments in home biogas, along with other partnerships for the development of renewable cities, have already changed the life of about 142,000 inhabitants in cities such as Cape Town (South Africa), Kampala (Uganda), Dakar (Senegal), Yaoundé IV (Cameroon) and Tsévié (Togo). HomeBiogas LTD – an Israeli-based company – has been involved in several international projects to advance biogas systems in over 110 countries, among which African countries. Recently, the Company won a United Nations contract to supply biogas systems for the treatment of organic wastes at refugee camps on the continent. Implicitly, this comes as a humanitarian call for responsible investments in Africa’s future, as to combat global environmental and health challenges. HomeBiogas LTD’s services have impacted the life of about 6,000 families across Africa and Asia, resulting in clean cooking, waste managed and trees saved (about 526,554 yearly). With the current dangers of the Covid-19 pandemic and climate crisis, it is clear that smarter investments are most needed in large and fragile regions of the world.
An Opportunity for African Tourism Market?
From another angle, agrihood and home biogas investments equally generate an opportunity to revive – and transform – the tourism market in Africa. In fact, these come as a means to address harmful effects of climate change and the Covid-19 pandemic on Africa’s economy, particularly on tourism. According to the UNWTO, in 2020 and 2021, African tourism suffered respective declines of 74% and 77%. Furthermore, the industry had an estimate of 12.4 million job losses and a deficit of about $120 billion in 2020 – noting that this economic sector already constituted approximately 7.1% of Africa’s GDP in 2019. That being said, it is in the best interest of local stakeholders to boost partnerships with responsible foreign investors in order to propel agrihood and home biogas investments. In this sense, this could create opportunities for sustainable development on the horizon, as well as eco-friendly and attractive spaces. It could trigger a revolution for African ecosystems and residential designs at a larger scale, but also a lucrative engagement for the African tourism market.
Climate change, and recently the Covid-19 pandemic, have prompted the need to incorporate ESG (Environmental, Social, and Governance) principles into national and international partnerships, especially for businesses in the most vulnerable regions of the world. In this respect, it is safe to say that investments in agrihood and home biogas are growing in importance in Africa, but do not seem to reach a large audience rapidly. As there are limited information on the subject, it creates uncertainties about the extent of their undertakings across the continent, yet it promises to create avenues to propel discussions around sustainable and profitable economic partnerships in the future.