A (Sunflower) Oil Baron Rises in Tanzania
WHY YOU SHOULD CARE
Because agriculture can make the continent a global breadbasket.
By Anne Kidmose
Growing up, Brigitha Faustin, 32, often visited her grandparents in their village home in the lush, hilly landscape near Mount Kilimanjaro. In her own middle-class home in Moshi town, they prepared their meals with sunflower oil, but in the village, Faustin saw little sign of the thick, yellow liquid. The villagers “boil their food because they can’t afford oil,” she says. When cooking oil is finally available, it has a long life cycle: First, it’s used to fry chicken, then reused to fry fish and later, to boil rice.
“It is very unhealthy,” Faustin says.
Experiencing poverty in the village planted a sense of social justice in Faustin. Years later, she has built a business on sourcing sunflower seeds from 1,200 smallholder farmers — 90 percent of whom are women — to produce affordable cooking oil for Tanzanian families. By cutting off the middlemen, she can pay the farmers four times the usual price of seeds and still compete with the prices for locally produced pure sunflower oil.
“I wanted to make a model that stands out. It is not only about cooking oil but the benefit for the farmers,” she says about her brand, OBRI Tanzania, her voice just as calm as it is steadfast. She seems fully at ease in an unpretentious V-neck, offering her undivided attention — only interrupted by an outburst from her youngest son. The mother of two manages her business from home during her maternity leave.
Faustin is among the African entrepreneurs who are tapping into what economists have labeled Africa’s “new oil” — the soil itself — and changing lives for farmers at the same time. By investing in processing, the agribusiness sector can turn into a $1 trillion industry by 2030, according to the African Development Bank.
In Tanzania, agriculture employs two-thirds of the workforce and accounts for 30 percent of the gross domestic product — which has been steadily growing at more than 5 percent per year. And although the sector is gradually modernizing, many smallholder farmers still live below the national poverty line, and consumers’ increasing demands for processed foods are met by imported goods.
“Processing is critical because the raw materials are not worth much — it all depends on the value you add,” says Michigan State University assistant professor Felix Kwame Yeboah, who analyzes African agriculture and youth employment. For example, the world’s largest cocoa bean producers, Ghana and Ivory Coast, make about $6 billion in a chocolate industry worth $100 billion.
[Female farmers] use their earnings to send their children to school, compared to men who might spend it on alcohol.
Turning the fertile regions of Tanzania and other African countries into food processing powerhouses requires entrepreneurs like Faustin, who realize the market opportunity. “They help invest resources and attract capital,” Yeboah says.
Faustin, who holds a bachelor’s degree in education and a master’s in community development, had not previously delved into economics, until an ordinary day in 2015 when she was looking for cooking oil. Standing by the tall supermarket shelves, she couldn’t help but notice a common denominator: “Ninety percent was imported,” she remembers. The only two Tanzanian brands on the shelf stood at about 5,600 Tanzanian shillings ($2.43) per liter, and Faustin suspected this to be a rip-off.
Startled by the absence of local sunflower oil, she began her research, visiting sunflower farmers and meeting with the owner of a local cooking oil brand. Two months later, Faustin left her job at the World Wildlife Fund, and in April 2016 she was producing her first batch of sunflower oil. What started as a small facility north of Dar es Salaam with two assistants has now grown to a processing facility in southern Tanzania employing seven permanent staff that handles a daily production of 10 tons of pure sunflower oil.
“I’ve seen her starting her business from scratch and she was very determined,” says Faustin’s younger sister Viola Faustin Chuwa. Introducing a new brand of cooking oil to the local market, Faustin went from shop to shop to offer her product, and although she was often turned down, she soon struck short-term deals with convenience stores. “What I learned from her is to never give up,” Chuwa says.
From the store shelf, a liter of OBRI cooking oil goes for 3,700 Tanzanian shillings ($1.61). Although it is only slightly cheaper than competing brands, priced around 5,000 shillings per liter ($2.17), Faustin argues that the price difference does make a “huge impact for low-income consumers.”
While the product is designed to make sunflower oil affordable to a wider range of Tanzanians, the farmers also win. Earning 800 shillings (35 cents) per kilo of sunflower seeds, compared to 200 shillings (9 cents) through middlemen, the farmers are in a better position to send their children to school and tend to their other small businesses, Faustin argues. Working with female farmers creates a ripple effect on the wider community, she says. “They use their earnings to send their children to school, compared to men who might spend it on alcohol.”
Without any formal business training, Faustin has taken courses to learn “the ABC in business” and sought advice from a senior Tanzanian businessman. As a new entrepreneur, attracting investors who have never invested in Africa — and certainly not in a business led by an African woman — has proven one of her main challenges. Now, as OBRI plans to expand to neighboring countries and scale up production by 5 to 10 times, Faustin needs to bring even more investors on board. “It is very hard, but we are still pushing,” she says. “We are stepping out of the box, but we believe it will pay off.”
To divide the workload, she hopes that more young Africans will find prosperity in the soil of their backyard rather than careers abroad. Mentoring other up-and-coming entrepreneurs, she doesn’t hold back from sharing both successes and mistakes — wanting others to steer clear of them. “I believe that Africa has a bright future,” she says, “if we all decide to invest at home.”
- Anne Kidmose, OZY Author Contact Anne Kidmose