How Many Businesses will you invest in and get up 30 times the Money you put in? Those Legitimate Businesses are not too many Right?
Environment Experts and Entrepreneurs say one of those highly profitable sectors is Restoring Drylands especially those in Africa.
This claim was made at the just ended Global Landscapes Forum ,a digital conference that ran from 2-3 June 2021 and highlighted the urgency to Restore Africa’s Drylands.
In one of the Sessions, Venkat Iyer who is the Manager, Restoration Finance for the World Resource Institute, WRI’s Global Restoration Initiative,GRI drew from WRI studies to say that
“Restoring Africa’s drylands is a major economic opportunity. With every $1 invested you can get $7-30 in economic benefits”
And since there are high returns in Land Restoration, Venkat posits that it would be a good area to invest because
“65 % of Africa’s Land is degraded which is a problem imperilling food security and it’s an economic development Challenge as well. 30 -60 % of African Countries’ GDP is from Agriculture which remains an underinvested sector”
Though some investors have committed more than $15 billion to AFR100 (the African Forest Landscape Restoration Initiative) and the Great Green Wall through 2030 Experts believe billions of those dollars need to be directly invested in entrepreneurs and community organizations with the necessary long-term vision, local knowledge, and technical expertise to transform Africa’s drylands.
In my quest to understand more on how investors can cash-in-on this investment opportunities and why some Institutional investors are feet dragging, I wrote to Vekat who sent me the Roots of Prosperity , a WRI 2017 report.
In the report it was estimated that
Restoring 150 million hectares of degraded agricultural land could generate $85 billion in net benefits to national and local economies, and provide $30–40 billion a year in extra income for smallholder farmers and additional food for close to 200 million people.
As for the reasons some businesspersons don’t want to pump in the Cash in Land Restoration, the Report holds amongst many other factors that many restoration projects have very long investment horizons of 10 to 20 years because restoration is a multi year process.
The Report also states that Many restoration projects are too small to be attractive to institutional investors. They may require only $1–10 million in capital, while institutional investors often look for minimum investment sizes of at least $50–100 million.
Roots of Prosperity did not also fail to recommend that Economic analysis can document successes, help prioritize projects based on specific objectives, and estimate the effects of restoration on job creation, GDP growth, poverty alleviation, food security, and greenhouse gas emissions. Analyses should cover not only restored sites but also their surrounding areas, so that conclusions can be drawn about the impacts at the landscape level.
And for governments to increase investments in forest and Land Restoration, the report recommends the removal of perverse incentives—such as agricultural subsidies—that make it profitable to degrade land and introduce new mechanisms that incentivize restoration.
The Report further recommends the Integration of restoration actions into many government bodies—such as ministries of agriculture, finance, energy, and the treasury—because land generates benefits for many areas of the economy and should not be treated as a purely environmental concern.
And away from that WRI report and back to the Forum, Speakers whose partnerships help fund and implement their projects, shared their success stories in Land Restoration.
Peace Grace Muhizi, Africa Project Manager for One Tree Planted – an Environmental non-profit tree planting charity that makes it simply for Anyone to help the Environment by planting trees shared that
“we believe reforestation helps to rebuild forests after fires and floods but it also helps to provide jobs. So we planted 10 million trees in 28 countries across Africa in 2020 with the help of multiple partners”
And one of those partners, Kijani Forestry was part of the Forum. Beau Milliken, Co- Founder and CEO of the Social Enterprise shared how they Combat deforestation through sustainable charcoal production.
Grande Partnership to Unlock Financial Opportunities
Still in the “ Scaling Finance: Restoring Africa’s Drylands through Private Investments and Local Projects” Session, Carol Dieschbourg, Minister of the Environment, Climate and sustainable Development of Luxembourg made a big announcement that will take the Dryland Restoration Plan in Africa forward.
“I am pleased to announce a uniquely powerful partnership between the Grande Duche of Luxembourg and the Global Landscapes Forum ,the Luxembourg- GLF Finance for Nature Platform. The Plaform will Initially Run from 2021- 2024” She Said.
“Fighting Climate change on a Grande Scale does not only require dedication and Political will ,they also need Money, A lot of Money” Minister Dieschbourg added
“The Organisation for Economic co-operation and Development estimates that almost 7 trillion dollars are required every year until 2030 to meet the climate and development objectives. But Sustainable Land Use Sectors are Still underfunded. For example a recent study by the Luxembourg Green Exchange and the Global Landscapes Forum showed that only 3% from the proceeds of the Green Bonds are flowing to these sectors” She says
“It is therefore necessary to shift financial flows to Sustainable Land Use Models That are financially Viable “
The Luxembourg member of Government also unveiled how the partnership will unfold to bring about the required results.
“Our Aim is to mainstream and Accelerate sustainable finance with special focus on nature based solutions, Restoration of Ecosystems, biodiversity, climate change mitigation and Adaptation. The activities include the appropriation of Relevant Knowledge, Content as well as the creation of communication initiatives”
“Establishing Partnerships and Catalysing Impacts in low and middle income countries are among our top priorities “ She stated to show Africa is highly involved in the partnership.
“This initiative particularly focuses on the Global South in order to Build Capacities and Unlock Financial opportunities for the Protection and Restoration of Nature”
By Henry Tataw Ekambi