The $3.35m investment with Citrum will go towards rehabilitating banana production at a farm that is now growing grapefruit and oranges.
UK development finance institution Africa Agriculture Development Company has invested $1.5 million in Citrum, which manages two small farms in southern Mozambique.
Through a partnership with the Government of Mozambique and a team of ag-focused local investors grouped under the name Nika, AgDevCo’s investment will support the efforts of Citrum to rehabilitate banana production on a farm currently focused on growing grapefruit and oranges. A $1.85 million investment makes Nika the majority shareholder in Citrum, with AgDevCo holding a significant minority stake in the company and a Mozambican government holding a less than 10 percent share.
AgDevCo analyst and project lead Jean-Baptise Inmatte told Agri Investor that previous attempts to grow bananas at the farm suffered from poor irrigation and fertilizer scheduling. In addition, the plantations were poorly spaced, he said, with fewer than the 2,300 trees per hectare that the organization sees as an optimal production level.
The investment will allow Citrum to purchase new irrigation equipment, build a ripening facility and help farmers cover losses incurred during the time it takes for banana production to increase, according to Inmatte.
Plans call for the bananas to be sold in local markets and exported to neighboring South Africa. The investment will support 140 jobs in Mozambique, with stipulations that call for key roles at the farm, including general manager, to be held by women, according to the firm.
Inmatte said that while there has been one instance of the Panama Disease soil pathogen found in northern Mozambique, neither Citrum’s banana plantation nor any of its neighboring banana producers have been infected with the blight. Because the disease can spread among banana farms relatively easily, Inmatte said efforts to prevent its progress have catalyzed collaboration aimed at enhancing biosecurity, both among producers and at the government level.
“We have commissioned a consultant, an agronomist, to work on that [preventing infection with Panama Disease]. We worked with one of the big experts on banana in Southern Mozambique and the risks of Panama Disease in Southern Mozambique are extremely low,” Inmatte said. “It’s on our radar, because we work in bananas, but it has nothing to do with Citrum so far.”
Since entering the country in 2009, AgDevCo has invested about $23 million across more than 15 projects in Mozambique, linking more than 105,000 local farmers to markets and resulting in an increase in income of $103 per smallholder, according to its website. Its investments have included soy processing business So Soja, seed processing, packing and marketing-focused Phoenix Seeds and avocado farm Westfalia Fruto.