Bwamanga talks Africa and agri investment

Daniel Mouen Makoua and James Tyner reveal how they are developing the business and overcoming investment challenges.

Bwamanga is a Sustainable Investment Advisor which seeks to extract value from agricultural projects. The company focuses on food security as central to its projects and is currently developing farming projects in Ghana, Senegal and Nigeria. Bwamanga already serves as an advisor on agricultural policy in two Nigerian states.

Daniel Mouen Makoua, CEO and Founder and James Tyner, CFO and Head of Strategy and Planning, spoke to Agri Investor about developing the business and overcoming investment challenges.

What are the challenges of investing in Africa?

Daniel Mouen Makoua
Daniel Mouen Makoua

Tyner: There are multiple! Some of our investment is into greenfield projects, which have more unknowns than an established operation, so we need to ensure there is minimal risk to our investors when we produce a business plan. There are also the political and financial risks, and global warming also poses a major challenge so we have to look to develop projects where water is available.

Mouen Makoua: Rivers are key criteria in seeking a location. We are currently in discussions about acquiring land with a water source that leads into the Volta River for our project in Ghana, for example. Another challenge is the landscape because we need the land surface to be very flat.

As James mentioned, the political environment can be a key risk as it impacts a project’s operational risk. Other risks are associated with inputs such as fertiliser and seeds because these can fluctuate in price depending on the wider commodity markets. In Africa, supply chain management is critical and so we always invest in small amounts and never everything all at once.

In terms of securing capital and favourable financial conditions, we have looked for government input in the past. In Ghana, for example, the government provides a tax holiday of up to five years for investments into the agriculture sector so we have a strong incentive to promote agricultural production by the governments of Ghana, Nigeria and Senegal.

Why have you chosen to invest into Ghana, Senegal and Nigeria specifically?

Mouen Makoua: There are a number of factors that have driven our regional focus. On the demand side, the region is in close proximity to a large pool of Africa’s overall population so it is important to ensure proximity to sources of food demand. The emerging middle class in the region will also drive demand.

On the production side, the region has a large supply of arable land with access to water. We also have an intimate knowledge of the region which helps us to execute the right approach and connect with the local community through small farmer or outgrower schemes linked to our projects.

These three countries also display pro-business policies, strong economic growth and political stability.

James: There is also good rainfall in this region.

What strategy guides your investment approach?

James Tyner
James Tyner

Mouen Makoua: The long-term theme that informs our approach is the food security theme and the long-term opportunity provided by sustained demand for food is one of the reasons why I established Bwamanga after several years working for AXA Rosenberg as chief investment officer. Because of this issue of food security, we are focusing on the production of food crops such as cereals and legumes to sell to local markets and the region more widely.  We will also consider the production of cotton and sesame as a means to diversify our risk and capture the export market.

We also believe that involving the local community in an inclusive manner is beneficial to our business and local area. This inclusive approach will involve establishing small farmer or outgrower schemes whereby we sell their produce along with ours into the market. This helps to ensure the alignment of our project with the local community.

Tyner: Uplifting and stabilising local communities is a big part of our strategy and part of what attracted me to Bwamanga as a business because it is a sustainable model and one that I experienced successfully when working on a gaming reserve in the past. We are focusing on Senegal and Ghana for farming projects. In Nigeria, we mainly have an advisory role.