Chris BishopBy Chris Bishop|November 24, 2022|6 Minutes|In Billionaire Tomorrow

Billionaire Tomorrow

It’s Nuts! Farmers driving Lexus and wearing Rolex.

Low hanging fruit is no good if it's rotten and you can’t sell it. That’s one of the lessons of the supply chain in what should be one of the boom industries of Africa – food production for a hungry world, according to impact investor with a $350 million fund Nimrod Gerber.

It took one piece of new technology to change the game in an industry that supports thousands of farming families across Kenya. It was proof  that the supply chain is king when it comes to growing food.

The farmers grew Macadamia nuts from the two million trees planted across Kenya since the industry took root in the 1960s. The round nuts, rich in vitamins minerals and fibre,  are in big demand these days as they help people lose weight and avoid heart attacks.

The nuts are also grown in China- which largely serves its home market – and by commercial farmers in Australia and South Africa.

Kenya is the only country where Macadamia nuts are grown on a large scale by small holder farmers. They send their crop to a collection and processing centre, run by an outfit Privamnuts 130 km outside Nairobi,  to be prepared for export.

The problem with this supply chain was that it was cash-based and prone to uncertainty and leakage. The owners of Privamnuts  introduced Mpesa into the supply chain –  a way of sending cash securely  through cell phones.

“Mpesa came in more than seven years ago in all the collection centres and took the business a century ahead. There are no leaks and everything is secure, it is more modern than what you can find in some European countries,” says Nimrod Gerber, of impact investor Vital Capital, an outfit with $300 million sunk in projects in Africa, including Privamnuts

“You have small farmers producing organic Macadamia with traceability certificates from Europe. This is exported to the US and Europe. It is a beautiful story.

These are guys who are very, very, business smart and come with knowledge of how to produce and have an effective value chain. If you ask me, this is the best thing that happened;  you see agropreneurs driving in a Lexus and wearing a Rolex!”

Gerber is not your average European-based investor in Africa. He grew up in Israel and, as a young man,  spent three years living in rural Kenya where he learned Swahili.

“My grandmother was from North Africa. Twenty of my 25 nephews and nieces live in Africa. I also spent 10 years in Angola. Both my heritage and future are in Africa!” says Gerber.

Gerber believes that food, along with water and health, is fertile ground for investment in the future of Africa if the supply chain problems can be overcome. Clearly, more food from the red soil of Africa is a no-brainer as the rich northern hemisphere put more and more concrete over their fertile fields threatening scarcity of food.

The recent COP 27 talks in Egypt are also at the forefront of Gerber’s mind. I ask him about Amazon’s founder Jeff Bezos – who has given $10 billion of his fortune to fight climate change – who claims billionaires shouldn’t have to pour money into the cracks left by the rich nations.

“It has to be everyone, there is no chance that government can close the gap by itself. There is little chance that only private money will do that. It has to be a combination,” he says.

“If you look at the data on Africa it says Africa will need at least $2.8 billion over the next ten years to implement the Paris Agreement (2015) You have 50 countries in Africa with only one billion dollars in private investment – is there room to make a change there? I

think yes; it will not be done only by the government.”

Yet Gerber sees a brighter future for investment in a growing and ever-younger Africa.

. “I think if you are in Africa for the long term I think what should be addressed is the basic services and needs and I think the biggest opportunity basically is demographics. So if you look at the next 30 years the doubling of 1.3 billion to 2.5 billion people have more available income and more than a billion people joining the so-called consumer class. I think investing in companies that address these needs of people joining the consumer class. I would say in the  medium and long term that is the biggest opportunity.”