TMG; Zimbabwe’s Diaspora Direct Investment

Over the past six decades or so, there has been various attempts to solve and in some cases to ‘eradicate’ poverty in the developing world; though the issue persists to this day, for the worse, some would argue. The case of Zimbabwe is not very different, though in its three decades of existence it has experienced an almost compressed trajectory that occurred over five decades in most African countries. However, Zimbabwe currently sits at a crossroads, it is beginning to reinvent and reinterpret development in interesting ways, partly due to international sanctions for example, which have limited its financial sources and so other means of growth must be sought. Turning Matabeleland Green is framed along this line of thought, it is an attempt to redefine both the financing and process of development from the ground up based on existing resources and skills. In a nutshell, TMG basically links two communities (the diaspora and rural farmers) in a symbiotic relationship to create a form of “financial accumulation from beneath”, as opposed to the traditional top down “trickledown effect” which was common practice in development.

Zimbabwe’s controversial land reform in the late 1990s transformed the country’s financial and agrarian landscape and brought new players to centre stage, rural small scale farmers; subsequently sparking debates regarding Africa’s food security. There is some consensus though, that Africa’s food supply (at least in Zimbabwe’s case) is largely in the hands of these countless rural farmers. However, do they have the capacity to not only feed themselves but their communities and countries? Though the debate[i] rages on, it is recently understood that while this kind of food sovereignty is possible, it is really “financial sovereignty” that will determine its feasibility; and in Zimbabwe where 70 percent[ii]of its population is rural, developing and financing this largely informal sector is a known challenge.

Meanwhile, the prominence of the diaspora in development has emerged as the latest buzz in the practice and has been welcomed with euphoria as a means of renewing development efforts in the South. Most have pinned new hopes on the potential of the various forms of remittance; financially these are currently estimated at triple the size of official development assistance[iii]. While these figures are positive, I argue that they do not necessarily reflect actual development outcomes for various reasons; for example these are private flows and are not necessarily targeted at development, in most cases they are simply a form of “aid without conditionalities”, which may also lead to financial dependency for the recipients. While most look on how ‘migration can support development’ through remittances for example, this paper is concerned with how these ‘remittances relate to development’; what do these remittances actually do and can they be a source of real development? Many institutions agree that the diaspora can potentially fund development, particularly the informal sector mentioned above, but the loose composition of the “diaspora” themselves make it difficult for institutions to partner with them in a meaningful way, the difficulty is how  to harness these private funds for collective development.

Na Ncube, exec director of The Global Native, discusses TMG at 'Africa In Action' confrence hosted by Comic Relief in Westminster Central Hall.
Na Ncube, exec director of The Global Native, discusses TMG at ‘Africa In Action’ confrence hosted by Comic Relief in Westminster Central Hall.

In this context, Turning Matabeleland Green (TMG), links the power of rural farmers with the development potential of the diaspora through TMG’s Enaleni Community Shares.  Enaleni is an Industrial and Provident Society (IPS) registered in the UK and regulated by the Financial Conduct Authority (FCA), which is able to issue such shares. Opposed to company shares, these are ‘withdrawable’ and non-speculative so they retain their value and the investor can exit at any time. TMG invests these remittances in insured value chain asserts and logistics that earn profit for the diaspora investor while providing infrastructure for rural farmers. This way both make a profit through a symbiotic relationship rather than the traditional one sponsorship which may lead to financial dependency. By appealing to a mass of relatively low paid migrants, TMG simultaneously provides the diaspora a means for building savings while investing at home and reaping better returns with profits between 5 to 7 percent, opposed to current European Bank interest of 2 percent. This form of Diaspora Direct Investment works with the relatively informal nature of remittances yet provides a workable mechanism for the diaspora to invest directly in their communities’ development.

In this fashion, TMG represents a holistic development approach by leveraging rural communities’ human and natural resources as a starting point. It is not a “poverty alleviation project” in the traditional sense, it is a development (and profit generating) model which undergirds the productive potential of relatively ‘poor’ rural farmers. In Zimbabwe, TMG focuses on two aspects, (1) to train farmers in Conservation Agriculture which increases their productivity fourfold at least, (2) provide logistic and market support for rural farmers where traditional funders are ill equipped to venture[iv]. Based in hot, dry Matabeleland, which essentially constitutes a natural greenhouse six times the size of Belgium, TMG focuses on growing “greenhouse crops” like tomatoes which yield better value. For example, a hectare of land produces 1 ton of maize valued at $300 compared to 40-60 tonnes of tomatoes valued at $15,000 on the same hectare. To absorb this surplus and connect the rural farmer to the value chain, TMG has purchased a tomato canning plant which can process 150 tonnes of tomatoes per day, adding value for local and export markets. This operation stimulates other business activities such as transport and inputs which TMG coordinates, driven by The Global Native, a development research organisation formed and run by Zimbabweans in the UK in partnership with Foundations for Framing and Sondelani Ranches in Zimbabwe.

Though there are various examples of diaspora funded development such as Mexico’s 3×1 programme where remittances are leveraged through State funds for local development, this is not applicable in Zimbabwe. Most other diaspora initiatives succeed in merely ‘supporting better lifestyles from outside’ and not actually sparking development in the local context. For example, Manila’s ‘little Italy’[v] where Rome based Filipinos have invested heavily in property development back home. This has been successful in upgrading their houses to villas in some cases, but these developments are now financially dependent on the Rome diaspora for basic upkeep and their traditional farming industry has since collapsed. Therefore the diaspora cannot return home and effectively their remittances have disabled the productive capacity of the small town South of Manila. In the case of TGM, over and above the financial gains afforded through linking the diaspora and rural farmers, the outcome is to contribute towards restructuring and rebuilding the agricultural sector using diaspora input to “spark” this development and in a few years it will cease to depend on diaspora financing. If anything the productive value of agriculture will overshadow the 1.6 Billion dollars currently remitted to Zimbabwe annually (which represents 40 percent of the 2014 national budget). Looking into the future, TMG still envisions this sector as a viable investment portal for the diaspora through direct investment such as one modelled here in Turning Matabeleland Green.

Notes

[i]Central to the Zimbabwean case is the controversy surrounding the land reform itself, which is now generally accepted as permanent despite international reservations, and as such will not be the focus of this brief

[ii] 2012 Zimstats Census http://www.zimstat.co.zw/index.php?option=com_content&view=article&id=65:census

[iii] Rt. Hon Justine Greening MP, Secretary of State for International Development. Speaking at the ‘Africa in Action’ conference organised by Comic Relief through the Common Ground Initiative; 18 June 2014.

[iv]International sanctions and the general mistrust that exists between the State and civil organisations results in a difficult terrain that is best navigated through local kinship networks.

[v] The Philippines: From Rome to Home, IFAD website http://www.ifad.org/remittances/multimedia.htm

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Mbongeni Ngulube

A Mundus Urbano Scholar under the EU's excellency program, Mbongeni lectures at several universities, including the Technische Universitat Darmstadt, Germany; Universitat Internacionale de Catalunya, Barcelona, Spain and University Pierre Mendes, Grenoble, France. He is a doctoral researcher at the Institute for Anthropological Research in Africa located at the Katholieke Universiteit Leuven, Belgium. His current research focuses on the effect of the African Diaspora and Social Movements on development practice and theory. He also regularly engages in conferences, seminars and high profile policy debates, such as the one at the British Parliament’s House of Commons. Ngulube completed and published a co-edited book titled Reflections on Development and Cooperation published and released in January 2011.

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