TIFS Releases Groundbreaking Report on Food Systems Investment in East Africa

“How are investments in food and agriculture in East Africa shaping the future of food systems?”

Transformational Investing in Food Systems (TIFS), has collaborated with 23 fund managers to analyze gaps, opportunities, and the overall role of impact funds in driving food systems transformation.

The organization unveiled a seminal report to assess the impact of funds’ contributions to agroecological innovation in East Africa. The research focused on funds that support food and agricultural businesses in Kenya, Rwanda, Tanzania, and Uganda.

The report recognizes the diverse agroecological practices in East Africa and the presence of regenerative companies engaging in various stages of the value chain. These entities include farmers who employ agroecological, organic, and traditional methods to cater to the market.

They prioritize natural processes, local wisdom, native seeds, and crops, emphasizing farming, aggregation, processing, food production, and nutrition, all rooted in a commitment to ecology and food sovereignty.

It also indicates the challenges for impact investors. The report says often face difficulties when dealing with companies requiring small investments, operating in unfamiliar markets, or adopting unconventional business models and motivations.

The report further shows the role of local intermediaries which are a viable path for investors to allocate appropriate capital to an emerging asset class that delivers transformational impact returns and also identifies various opportunities for investment funds to enhance their investment processes, aligning them with a regenerative, equitable, and climate-resilient food future.

Several recommendations were also identified by the research team including; improving impact thesis: The study indicates that while most funds have a Theory of Change (TOC), it often lacks scientific backing. There is a need for the creation of an agroecological or regenerative impact thesis.

A majority of the sampled funds, especially newer and smaller ones, can strengthen their governance structures and stakeholder engagement mechanisms.

Researchers also called for a due diligence process with well-defined methods for identifying negative impacts should be more widely adopted, along with improved measurement and reporting on these impacts.

To further the field of food systems investing in East Africa, TIFS recommends the development of an investment thesis for agroecology, regenerative approaches, and Indigenous foodways. Building a community of fund managers and catalyzing collaborative actions can help balance impact performance and financial returns.

It is suggested that the impact investing community should collaborate with other stakeholder groups, including governments, international donors, insurance companies, and institutional investors, to create a conducive environment for agroecological and regenerative solutions.

TIFS is a vital impact network comprising investors, funders, intermediaries, and enterprises dedicated to fostering a market that supports a regenerative, equitable, and climate-resilient food future. Special thanks go to TIFS’ partners, Shona, a business development service provider in Uganda, and ISF Advisors, a research and strategic advisory firm.