© Root Capital

Theory of change

Simply put, we believe people in rural Africa are poor because they do not have enough money. They do not have enough money because they do not have the opportunity to generate an income. Therefore, the creation of income-generating opportunities is central to the eradication of extreme poverty, enabling people to work their way into sustainable livelihoods.

Like people everywhere in the world, extremely poor African farmers can generate wealth only by using the assets at their disposal. In the case of small-scale farmers, who make up the majority of extremely poor people in rural Africa, their assets are their land, their labour, and their entrepreneurial drive to seek and exploit market opportunities as they arise.

Also like every other person in the world, a farmer in Africa is at the mercy of the business ecosystem in which he or she lives and works. In rural Africa, this often puts farmers at an overwhelming disadvantage due to market failures and infrastructural challenges which effectively block access to knowledge, finance, technology and markets, and keep farmer productivity at one quarter to one tenth of that of farmers elsewhere. Without the products and services they need to make their assets productive – including, crucially, business development and financial services – smallholder farmers remain stuck in a vicious cycle of low investment, low productivity, low margins and low, and sometimes zero, incomes.

But, with the right investment in building the business ecosystem for agricultural value chains, that downward spiral can be turned around. How this can happen, our theory of change, is outlined here.

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