Nonprofits Invest in Ugandan Ginning Company

By Jim.Robinson|January 19, 2011

Two nonprofit firms are working to re-energize the cotton industry as a means of assisting cotton farmers in war-torn Uganda. Acumen Fund, a nonprofit global venture firm focused on fighting poverty in South Asia and East Africa, and Root Capital, a nonprofit social investment fund working to help residents in rural areas of developing nations, have invested $2.2 million in the for-profit ginning company, Gulu Agricultural Development Company (GADC).

Many of the residents of northern Uganda are former refugees, and the investment is designed to help the region’s 42,500 small, landholder farmers compete in the global marketplace. GADC is the only commercial ginnery in northern Uganda’s Gulu district. The area is in desperate need of assistance, with a poverty rate of 62 percent–twice the national average–among its 1.4 million residents. Before the 25-year conflict, tens of thousands of subsistence farmers used the income from cotton to provide food, basic medical care and other necessities.

The Acumen Fund (which has $40 million in companies that meet the basic needs of low-income consumers in South Asia and East Africa) and Root Capital (with 35 businesses in sub-Saharan Africa in its portfolio) hope their investment will serve as a catalyst for economic recovery in the region.

GADC will source both organic and conventional cotton, and will educate farmers about ways they can generate income during cotton’s off-season, including growing other high-value crops such as sesame.