Investment from Malians abroad supports farmers back home

Amid ongoing insecurity, climate change and political instability, Mali faces significant challenges in attracting the investment needed to lift its population out of poverty. In one of the world's least developed countries, where one in five people lives on less than US$2.15 a day, families look to the Malian diaspora as a crucial source of economic support.

Overseas Malians send back over US$1.1 billion a year – remittances that account for over 5 per cent of the country’s GDP and meet the basic needs of countless rural families.

As new generations of emigrants start sending funds home, their investment preferences are shifting. IFAD research has found that, alongside sending remittances and funding social development, more and more members of the diaspora are exploring ways to invest in businesses that yield both societal impact and financial returns – and agriculture is high on the priority list.

This opens a welcome opportunity to channel investment to small-scale farmers and rural entrepreneurs, who need it both to grow their businesses and to build resilience against external shocks. Without this protection, seasons of extreme weather and less predictable rainfalls due to climate change can wipe out the fruits of their hard work.

Ibrahima, the president of a rice producers’ cooperative in Mopti in the Inner Niger Delta region, knows that his community’s prosperity depends on the right amount of rainfall for their crops. “This year we’ve had a lot of flooding, but we’ve also noticed a lot of heat recently,” he says.

But this cropping season, Ibrahima is more prepared for whatever the skies throw at him. That is thanks to Ciwara Capital, set up with support from IFAD and EU funding and entirely owned by members of the Malian diaspora. Ciwara invests in small and medium-size enterprises in Africa including agri-businesses, aiming to raise US$2 million by 2026 and US$10 million over the longer term. In Mali, Ciwara has invested in Zira Capital, an impact investment fund.

Among the new investments of Ciwara and Zira is SOPROTRILAD, a Malian company that provides over 3,000 small-scale farmers with inputs, such as seed and fertilizer, and in return buys the rice they harvest. IFAD’s INCLUSIF project has supported SOPROTRILAD in building relationships with rice cooperatives and introducing them to climate-smart production techniques, such as the System of Rice Intensification (SRI).

Ibrahima's cooperative has signed an agreement with SOPROTRILAD, and despite a steep learning curve, he immediately spotted the potential of the new farming approaches. “It is more beneficial for us,” he says. “For example, for a 0.25-hectare field, we used to use 13 kg of seeds, while with SRI we only use 2–3 kg. SRI uses less water, which reduces the use of motor pumps and saves fuel.”

Meanwhile, production has risen. “Where we harvested between 20 and 25 bags of paddy rice, we now often get up to 34 bags. Although the technique requires more rigour, it is much more beneficial,” explains Ibrahima.

As his rice harvest grows, Ibrahima knows he has a guaranteed buyer in SOPROTRILAD. By reducing the amount of water and other inputs, he is better equipped to withstand periods of drought, while his healthier soil can better resist damage from flooding.

Now, with investment from Ciwara, SOPROTRILAD is building a new rice factory and looking to increase the number of rice suppliers. “With the new factory we're building, we'll need a lot of paddy rice,” says SOPROTRILAD representative Oumarou Amadou Sankaré. “We’re going to try to contact a lot of producers, and this should reduce famine and rural exodus in many areas.”

Investment companies like Ciwara model an innovative way for diaspora Malians to reach out a helping hand to their rural compatriots, close Africa’s financing gaps and channel prosperity to their rural homes. By combining profitability with sustainable development, such capital investments can be a blueprint for Africa’s future growth.

As Oumarou says, “It shows us that these Malians from abroad want to help their country. They’re patriots, they haven’t forgotten us. They can be reassured that we will use their funds as they wish and where they are needed.”