Alan Kessler (Photo: AAMN)
All Africa Media Network | 12 October 2021 [FR]
How African Agriculture will drive global food and protein security – Alan Kessler
by Allafrica Media
Beginning with an initial farm development in Senegal, African Agriculture, a United States-based Africa-focused company, has embarked on a journey to deliver protein to the world. The company aims to achieve this mission through the enhancement of cattle feed via high nutrition content and fiber alfalfa production, the responsible environmental and employment management of Africa’s abundant coastline, and the deployment of cash flow ultimately into a global program of carbon offsets. Alan Kessler, the Chief Executive Officer and Chairman of African Agriculture, sheds more light on the project and the plans ahead.
Could you give a background view of African Agriculture?
African Agriculture has started at the farm in Senegal, which is our first asset. Our majority shareholder and founder, Frank Timis, has provided us with capital in a very strong asset we are using to create cash flow, and we look forward to expanding our cash flow deployment of African Agriculture in other assets and production opportunities and many other different strategies that we can deploy in direct crops or in agricultural trading businesses.
How truly African is African Agriculture?
The founder and majority investor, Frank Timis, has his background in investment success, many of them on the African continent. Over 95 percent of our employees are African. Even though we are a United States-based company, our entire focus is on the development of the African continent and our first country of operation is Senegal, our next country of operation is Niger. We look forward to expanding throughout ECOWAS and eventually into the SADIC region as well. Our Board of Directors have all had experience on the African continent either by birth or by serving on behalf of the United Nations or US Government in roles with the US State Department in Africa, or have had direct roles in investing institutional capital in Africa. So, I can say to you with a great deal of confidence that our entire focus is in Africa.
You mentioned Senegal as your first country of operation and Niger as the next. Have you opened communication with governments of those countries?
Yes, we have already got the assets, the assets are already operating and they are already fairly far advanced. That’s why we have a very strong legacy of investment with those countries. We look forward to expanding throughout the ECOWAS. We are very focused on developing the economies everywhere we go. We anticipate to expand throughout the continent and we believe that what we are doing will create a lot of jobs, transform water access, food production, and sustainable development. We know we have a very good, strong, sustainable company and we think the impact is going to be felt throughout the continent.
African Agriculture says it was born out of a global necessity for food and protein security for the coming century. To what extent would you say the company is on course towards solving this necessity?
Protein is a necessary component of every diet. It is necessary for children to develop their brain power and bone development. So, we want to make sure there is a balance of protein in every aspect of service to the world’s what would be close to 10 billion people by the middle part of the century. So, we will be producing alfalfa as our first crop in African Agriculture. Alfalfa provides protein to livestock and cattle necessarily for beef production, dairy product production, which will feed into the making of other products. Additionally, it can be used as a biofuel. So, we think we can really drive protein access both domestically and also potentially for export of what we produce. That’s number one.
Our next strategy also involves the production of fish. That will help serve protein directly to the local communities and also potentially for export. So, in terms of serving the global access to protein, we are very comfortable to make that comment.
A lot of our exports would be done through the consumption markets within Europe and the Middle East. I think these would be our first two areas of focus.
You have spoken of alfalfa production as well as fish. Apart from these, what other areas do you see potential for African Agriculture in Africa?
We certainly are looking at expanding our access to other forms of livestock management not just in terms of helping feed cattle. Even in ECOWAS itself, there is so much undernourished cattle that we think we could help. Beyond this, we are also very interested in environmental or urban management space because we think we are going to be able to help. No doubt, it has a huge part in terms of our sustainable approach to managing the food supply and we think we are going to be able to take advantage of a lot of the soil, water and sun resources in Africa which are unique in terms of the land and overall exploration of the continent.
For the benefit of prospective investors, what is your projection in terms of Return on Investment?
We believe we have ROI in excess of 50 percent.
Investors like to weigh the risks as well. What’s your view of the risks vis-a-vis the projected ROI?
Any investment is buying into a company with risks. So, are they risks manageable or are the risks too far to outweigh the returns? What are the true risks and what is the compensatory return? I have mentioned an ROI of over 50 percent. An ROI of 50 percent is certainly going to bring risks, but I do feel a lot of the risks embedded in what we are doing are completely overblown relative to what the outlook is. For example, a lot of the US investors are confident buying into projects and opportunities in, say, California, and in California, their access to water is a systemic risk compared to what we have available to us in Senegal as an example. We have access to tremendous water potential in what we are doing. Unfortunately, with a lot of the US institutions and also European institutions, we do feel the need to disclose that there are many things going on in Africa that they may not see in the context of their daily lives.
Agricultural experts have long been sounding the gong that Africa can feed itself – and the world. Even the World Bank agrees. For instance, the World Bank in 2012 released a report titled “Africa Can Help Feed Africa”. But Africa’s agriculture potential seems to have remained just that – a potential. Why, in your view, is this so, and how can Africa fully unlock its agriculture potential?
I think there are a few ways to answer that question. Number one, unfortunately, a lot of the techniques in management, in the educational aspects of application to agriculture have not quite developed quickly in the African continent. Take the agricultural universities, the agricultural machinery, the agricultural technological development and innovation which, for instance, are fully developed in the United States. So, quickly, we think we are in a position to actually help to bring a lot of that to the African continent and so, in conjunction with the creation of the company, we have started a very exciting deal with Louisiana State University. The strategic partnership will provide African Agriculture with over 2,000 research and educational staff from LSU who will lead training and development programs for Africa, including cutting-edge technology, the most up-to-date crop optimization, and a full teaching curriculum and all necessary instruction. The collaboration will extend to the marine biology institute of the University, as well as environmental, which will govern the reforestation program. This is part of our global approach to development. I think it is important to continue to do technology transfer and skills transfer, and the US government is currently committed to this. Our majority shareholder investor, Frank Timis, is very committed to the development of the African continent. So, I think we still need education and tertiary education is part of what we can do to solve the problem.
The second thing, I think, is the Central Bank lending rates all over Africa. Zambia is an example, where the lending rate is in the 27 percent range. I know the banks in Nigeria charge 20 percent plus or minus. You know, it’s very difficult to go and buy huge pieces of machinery that are necessary to create that efficiency which is such a big component of the farming asset when your capital resources are so difficult and the credit access is so much more complicated. That has been part of the problem thus far and we think we are going to be able to help in that regard.
Another factor is just the inability to access a lot of the foreign consumption markets and optimise crop management, and I think this is where the field of agronomy comes in in terms of what is the optimal crop for the optimal environment in the optimal time of year using the optimal amount of scarce resources. It is done so scientifically given recent advances. Africa has one of the lowest yields in the world even though you have got the best resources – the best soil, the best water and the arable land available globally.
