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Zimbabwe’s renewed focus on food production

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There is a renewed focus on agriculture and food import substitution in Africa. Image credit: Leon Louw for WhyAfrica

Zimbabwe’s renewed focus on food production

In the wake of Covid-19 and because of the crisis in Ukraine, there is a renewed focus on agriculture and food production in Africa. Zimbabwe’s goal of import substitution has delivered positive results.           

The war in Ukraine brought an important reality to our eyes: that there was previously far too much reliance by many countries on the importation of food products, in particular wheat, from the Ukraine.

In Zimbabwe, for instance, prior to the war. “… Russian and Ukrainian wheat accounted for nearly 60% of wheat imports used locally for self-raising flour to make confectionery products”. The disruption to food supply caused by the war – as well as by the supply chain challenges created by the pandemic – has made the world sit up and look at ways of stabilising food supply.

In Zimbabwe, a new focus on increasing local wheat production is showing positive results, and there is a greater consciousness of the need to work towards import substitution, i.e. growing and producing food products locally, rather than importing them.

Investment by private sector (Zimbabwe’s renewed focus on food production)

It is against this backdrop that private equity firm, Spear Capital, has begun to focus on investing in businesses in the SADC region that play a role in the processing of agricultural products for food production.

Their latest investment is into Greenwave Milling, which is involved in the manufacturing, packaging, and distribution of basic food commodities throughout Zimbabwe.

The transaction was made via one of Spear Capital’s subsidiaries, Superior Food Group Africa.

Previously part of the Metro Group, which is already a Spear Capital investee, Greenwave Milling is now a standalone production unit for the group. It manufactures, packages, and distributes a number of basic commodities including roller meal, refined meal, rice, cooking oil, flour, beans, salt, sugar, kapenta (a regional type of dried sardine), soya chunks, and other household essentials.

Under the terms of the deal, Spear Capital via its subsidiary Superior Foods, has provided Greenwave Milling with a substantial debt facility. The funding will be used to purchase raw materials for milling and down packing and to ensure that it is able to meet growing demand for the GreenWave range of products.

“Having been part of the Metro Group success story in Zimbabwe for several years now, we know how much intellectual capital there is in the business,” says Spear Capital Managing Partner, Martin Soderberg. “When some of that capital was used to launch Greenwave Milling as a standalone business, it only made sense to back it too.”

Meeting sustainable development goals (Zimbabwe’s renewed focus on food production)

According to Soderberg, the deal will be carried out in a way that meets Spear Capital’s target UN Sustainable Development Goals (SDGs), including Gender Equality (SDG5), Decent Work, and Economic Growth (SDG8).

Through the investment, Greenwave Milling aims to increase sales and its contribution to the Zimbabwean fiscus.

The investment will further enhance Superior Food’s focus on building a stable food platform in Southern Africa and encourage Greenwave Milling’s ability to meet its financial and SDG commitments.

Through Spear Capital, Superior Food will provide funding to GW Milling, which is currently hard to raise in Zimbabwe, and unlock future growth and working capital. Through its shareholders, Superior Food will assist GW Milling with managing its procurement of raw materials.

Zimbabwe’s renewed focus on food production

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Zimbabwe’s renewed focus on food production

 

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