Just a quick update from me on this article. My intuition was right. A country shopper ‘refugee’ has dissolved Agrikaab and done a runner with the money. It was to be expected. As a result I have pulled affiliation and obviously, everything in the article below is to be disregarded. I meant to do this some time ago, but life gets in the way, you know.
While the idea was a noble one, it needed to be run by a noble person, and Mohammed is/was not. I do believe that investment in infrastructure is a necessity for the most resource rich continent in the world to stand on its own, I now think it should come from its own people. Not you, me or Mohammed.
Europeans put up food for the winter, which in turn created idle hands through the colder months. Idle hands coupled with the protestant work ethic allowed for the industry of invention to forge the tools which tamed the world. Its now time for other cultures to take these tools and forge their world, instead of leaning everybody else then calling it exploitation.
The Original Article:
Agrikaab is a platform which allows people to make investments in the food security of Africa. More specifically, Somalia and Kenya. And I know what you’re thinking. ‘It’s risky.’. You would be right. And while there isn’t always a direct correlation between risk and reward, the ROI that Agrikaab.com offers is pretty alluring and…pretty risky.
Sporting between 14 and 30% per annum, Agrikaab make a very attractive case as to why you should stake your capital in the agricultural sector of East Africa. Agrikaab has opportunities available in greenhouses, rain collection ponds, retail stores, and camel farms.
Recently, I have decided to put some capital into a couple of opportunities available on their site. I’ll be updating the performance of this investment, my decisions on allocation and give you my overall opinion as it evolves. I normally write about generational wealth, and this definitely isn’t a good family asset.
I’ll also say up front that my opinions are in no way associated with those of Agrikaab. I’m upfront, blunt and honest. My goal is to deliver information for you to leverage in making a decision of your own.
Agrikaab was started by Mohamed M Jimale, who grew up in Somalia living a nomadic life of animal husbandry with his family, who had been doing so for generations. In 2010 he moved to Sweden as a ‘refugee’.
Tangent time: Now this move was a hanging point for me, and I’d tag it as a risk. Now, Sweden is suspiciously far from Somalia for it to be a true ‘refugee ‘move. This makes me think there was a bit of ‘country shopping’ going on. And well, as Sweden has a very left-leaning government that gives away finite resources as though they are infinite…it’s quickly turning into a bit of a crap-hole. This kind of country shopping for not ‘freedom’ but ‘what can I get for free?’ does pose the question of integrity.
Mohamed, at the very least, did not waste this opportunity and wound up working on various projects afforded to him by the luxury of this move. Ultimately, he founded Ari.farm, which in time became Agrikaab. He was motivated by the severe drought that occurred in Somalia in 2016, which impacted the lives of many of his (formerly) fellow nomads.
Agrikaab’s mission is to ‘create a new generation of farmers’. And as a result, they will contribute to food security and create jobs in the process.
How Agrikaab Works
Agriculture is 75% of Somalia’s economy. For the most part, this agriculture is nomadic. Agrikaab seeks to change this by creating a way for everyday people to invest in agricultural projects in East Africa.
Agrikaab provides a variety of opportunities in the agricultural sector. These range from greenhouses to grow and sell produce, camels that provide milk, to rain collection ponds, and recently, a store as well.
What this means for you as an investor, is that you get to select a project to invest in. You then buy ‘units’ in this project. These ‘units’ represented in unique ways for each asset they provide. And these provide a return to you for a period of time, until you receive a 60% profit on your capital. The objective for ROI is targeted at between 14 and 30%, but this is subject to the performance of the investment.
The way the return works is a bit different. Yes, it’s passive, but once you have received your capital back, plus 60%, the investment has ended. So effectively, you get 60% more of your money over an estimated 2.5-4 years, and then Agrikeeb keeps or sells the asset to continue to grow Somalia’s food sustainability.
To help achieve this, there are guards put in place, depending on the investment, but I’ll cover those in the relevant section.
Not Charity – Real Returns
I have never been a huge fan of charity, especially without an actually and objectively ‘good’ cause. After all, if you give a man a fish, he eats for just a day. Not only is this not actually a kindness, you’re also inhibiting the drive of this individual to learn to feed himself, and not providing anything sustainable.
Agrikaab, in my view, approaches this from the same mentality as me. Charity is harmful to developing countries. If food is sent over to feed the hungry, there is no real reason for farmers to develop and work their land. It impacts food prices and winds up creating a chink in the armor that is food security to a nation. Farmers wind up having to walk away from their farms and herds and moving to cities, to get handouts to survive.
On the other side, if financial aid is offered there are a lot of hoops and garnishing of capital that occurs. And the money that actually does make it through does not encourage economic sustainability for a nation.
Instead, by encouraging capitalism and offering an economic incentive, a country can flourish. This comes from rewarding risk and effort, monetarily. Every successful country has made its own way economically, and every impoverished nation has relied on handouts(or succumbed to socialism/communism/marxism). Africa desperately needs to jump on the capitalism bandwagon and take advantage of their low regulation environment and rich resources. Agrikaab, in a small way, will help contribute to this.
The idea behind offering a return on investment is to build a sustainable business that fits into the economy of the relative country it is located in. If these assets are able to offer a form of income(even though its temporary, more later) to investors then they also are able to generate revenue and positive cash flow. And if they can generate revenue, then they can be a form of wealth for a community. This wealth is not only economically by bringing monetary capital in and creating jobs, but also by providing resources that can be leveraged in other areas.
Not only is the ROI from Agrikaab beneficial to investors pockets, but the ROI is also immensely powerful for bringing stability to nations lagging behind the rest of the world is a truly economically stable way.
Agriculture is the foundation of civilization. Without agriculture, we’d still be chucking spears living in small tribes in..Africa…huh. Anyway, despite the fact that this worked for literally most of mankind’s history, we would not have anything akin to the (basically) global civilization with all of its modern marvels today. It frees up body, mind, and people to focus on things that aren’t where their next meals are coming from.
Agrikaab, being agriculturally focused, are thus providing the very backbone of what it is to build economic sustainability to a nation frequently ravaged by droughts and agricultural disasters, being a nation where over half of the population is still nomadic.
Rather than giving money to some charity with short term solutions providing temporary aid, your investment is giving you a return while also providing to the stability and sustainability over the long term for countries.
Like anything you put your financial capital into, this investment comes with risk. You can lose some or all of your capital if a project fails or if Agrikaab folds. While Mohamed seems to have the best of intentions you nor I really know him. This is a new business, in a new field with not a huge amount of history. And Somalia is still, despite being one of the oldest, a very undeveloped culture still rife with tribal warfare
The building the Agrikaab offices were in was bombed, for example. This doesn’t scream ‘moderate-high risk’, it screams, “Get away from me…I have a knife!..and 20% ROI!. COME AND GET IT IF YOU DARE!”
I try my best to make any decision based on empirical evidence. Mohamed, the founder of Agriikaab does have a track record of leaving his place of origin for greener pastures as a ‘pseudo-refugee’. On the surface, objectively, it doesn’t speak well for his character(IMO). Though whether this was him, his parents or if he was just doing what was best for his family, regardless of the expense of others, I can’t say. Plus…you can’t blame him if Sweden will just take country shoppers – it’s their lefty government after all, not the fault of the refugees. So a less of a red flag, more of a greyish-pink one from me.
All this said I have still put a bit of trust in Mohamed and Agrikaab. But this was a limiting factor to the amount I was willing to stake. I suggest you pull your moral compass out(not your indoctrinated ‘ethical’ one) to make a decision on objective risk as well. If you are simply chasing a higher ROI and don’t have the capital to lose, steer clear.
Types of Assets Agrikaab Offers:
There are, at the time of writing, four types of assets that Agrikaab offer. Each of these has particular advantages and risks that come along with it. I’ve broken these down below, and offered my views on them in comparison to the others available.
Camels, or more specifically came farms were the first investment type offered by Agrokaab. Unlike the west, Camels are an integral part fo the food supply chain in East African countries. Typically, herds are owned by nomadic families, who travel across the countryside, grazing them, while breeding, milking and butchering them. Effectively operating their herd as a family business.
Agrikaab offers the opportunity to buy Camels, or more appropriately shares in camel farms, with a minimum investment of 1/3 of a camel. For this, you receive 70% of the revenue generated by the camel(though it’s actually spread across the entire herd). The revenue is generated by selling milk the camels produce to locals.
These investment ‘camels’ vary in price. When Agrikaab started, they were around $900, but at the time of writing, they are $1200-$1500. Included in this price is the cost of purchasing a camel, maintenance and running costs for the farm to get it going.
Like all other Agrikaab investments, the objective is to return your capital to you with a 60% profit. Agrikaab has stated you can expect about 20-30% PA on your investment, barring anything going pearshaped…and let’s face it… It nearly always does.
However, as a way of mitigating risk, if one of the camels can’t breed, or has low milk supply or a myriad of other potential issues, then these costs are spread across the entire herd.
The aforementioned risks include:
- Security: Naturally there is a risk of security for the animals, due to heightened tribal conflicts in the country, not to mention theft or malicious intent.
- Droughts: Water shortages are always a problem, especially in East Africa. Agriculture and animal husbandry is highly reliant on having sufficient water available. Camels are highly drought resistant, thanks to the ability to retain water(no, not in their hump!) and regulate body temperature.
- Disease: Disease can spread quickly in a herd, so proper management is required but the experience staffing teams to manage this threat to the camel’s lives and performance.
- Loss or theft: As camels are raised in a nomadic grazing fashion, there’s always the risk of a camel wandering off, or worse, being stolen. Agrikaab’s staff will do their best to mitigate this from happening, but it’s still a very real possibility.
- Infertility: It happens, some camels just cannot conceive. In this case, the camel will be sold off and replaced, the loss being distributed among the herd.
- Low milk yield: Low milk yields result in poor market value, both in the monetary yield and resell value. If this is the case, the animal will be replaced and the loss distributed among the herd.
- Miscarriage: If a camel hs an unfortunate miscarriage, the losses will be evenly distributed amongst the herd.
- Death: If any camels die for any reason, then the loss will be evenly distributed among the herd.
Camels, being integral to Somalia’s food culture, seem an obvious staple for investment. However, due to the nature of the water stability for the country, and it’s increasing scarcity, the return will probably not be as high as Agrikaab is hoping, due to the risks listed above.
If you’re going to jump on board and have a small bit of capital, then I wouldn’t stake it all on a camel or 1/3 of a camel. If you have a bit to distribute around the various options on the platform, then these beasts may be worth a smaller % punt in your Agrikaab account.
Greenhouses, as you probably know, offer a controllable environment in which to grow plants. In Agrikaab’s case, they intend to use their greenhouses to create a reliable supply of vegetables.
As water is an ever-looming threat to food supply, Agrikaab is installing drip irrigation in order to maximize water efficiency.
I believe where possible, they are using the same land that the greenhouses are situated on for their rainwater collection ponds. This, the greenhouses will also be used to collect rainwater to feed into the ponds.
Greenhouse investments are sold by square meters. The minimum required investment is 20 square meters. Take into note that you are investing in the business, that is to say, the profits on vegetable sales, not the land the greenhouse is on.
For this, you will receive 70% of the revenues generated until you achieve a 60% profit on your invested capital, at which point the investment is completed.
The estimated ROI on a greenhouse is approximately 23% and it should take 3-5 years to complete the investment, unless anything goes awry.
- Security: There’s always the threat of damage to the farms either due to weather or from being caught in tribal conflicts.
- Failed harvests: Experienced agriculturalists are being hired to help increased yields and minimize failed harvests. But there’s always the risk of bad harvest, either form poor seed quality, unforeseen weather or just plain old bad luck.
- Water cost: Where possible, Agrikaab will have a well or a rainwater pond on farms. There will be back up water sources available(especially as more ponds are established). That said, a new drought will impact harvest and water prices that could have severe impacts on revenues.
- Disease: Greenhouses, if not kept in check, can be breeding grounds for diseases and pests. Agrikaab plan on having the correct treatments, pesticides and fertilizers. There’s always an unknown factor, however.
Greenhouses provide a controlled environment in which to grow produce, typically year-round. Most crops you would grow in a greenhouse have a short cycle, meaning that crops can continuously be cycled through.
I do believe tomatoes are being grown in some if not all of the greenhouses, and will serve as a cash crop. This is where I think Agrikaab are making a mistake. Tomatoes, while a delicious fruit, are not terribly nutritionally dense. Tomatoes are a cash crop, but not a necessity. IMO they would be better off growing things that are nutritionally dense ad have a fast turn around. Such as microgreens, root crops, tubers, and brassicas.
I have a lot to say on the subject of garden produce, but I don’t know the East African market or growing climate, or how they value tomatoes. I would have liked to see how they would be improving soil quality too, as they are not using hydroponics. Perhaps there’s some cross collateral possible from the camel farms?
Water security poses a threat too, though drip irrigation is a top-notch way to minimize losses.
All in all, I think this is a better punt that Camel Farms, but probably not as safe as rainwater ponds.
Rainwater Collection Ponds
Water security is an issue for any desert ‘nation'(if you could call Somalia a nation). Creating a way to get and store water in a sustainable manner is an ever-looming problem that every country needs to address for its people.
Agrikaab plan to address this in a fairly simple way. Dig big holes, line them with butanol(food-grade pond liner) and catch rainwater in them during the spring and autumn months. They will then ship it off the villages, towns and nomadic herders in trucks, where it will be sold for a fair market rate.
The rain collected from these will also be ‘sold’ to the greenhouse and camel farms Agrikaab owns, to increase their returns and sustainability.
Rainwater collection pond investments are sold in cubed meters(m3), with a minimum investment of 50m3.
For this, you will receive 70% of the revenues generated by the ponds until you have received your investment capital back, plus a 60% profit. At this point, the investment will end.
The ROI is estimated at 15%(or 20%, it’s unclear), with a timeframe of 2.5-4 years according to Agrikaab, though by my calculations it’s more like 10? So maybe they’re factoring in an increase in the costs of water or something? Not sure whats going on there. I don’t see how your investment compounds, so I can only assume that Agrikaab is going to repay investors by returning capital to them in 2.5-4 years. It’s not made clear.
- Security: East Africa is an unstable place. Conflicts, especially if pond sites are caught in the middle, may result in damages to the sites. While a team will be present, there’s no telling exactly how peaceful things will be at any given moment.
- Rainfall: Rainfall in East Africa is unreliable and unpredictable. If there is too much rain, there may not be enough pond to hold the water, and not enough rain will impact revenues from the project dramatically.
- Theft: The ponds will be monitored by greenhouse staff, that said, thirsty people are desperate people, and there could be conflict over water as it is an increasingly scarce resource(globally!).
I am a huge fan of this approach. Not only is it increasing the reliability of other projects, but it is also helping improve the infrastructure of the country in a sustainable and scalable fashion. Go capitalism!
I do question how they will hand evaporation. I am aware of dark spheres, and pond covers, with the former seeming a logical choice. There is no mention of this on their prospectus, however.
The other concern is the volume of the rainfall being a primary issue. It would be cool to see a project designed for multi-year water caching. Maybe we’ll see solutions to this in the coming years with the growth of Agrikaab?
Agrikaab has plans to open stores to cover a large problem facing farmer in East Africa: the lack of a decent supplier of tools and products.
The Agrikaab store is intending to be a one-stop-shop for farmers to get agricultural supplies, tools, and small equipment.
Feed, seeds, fertilizers, greenhouse kits, tools, and machinery will be made available for farmers to increase their productivity or for other folks to start farms of their own.
Your investment capital will be used to purchase inventory for the store.
Shares are sold in the store with the minimum investment being listed on the relevant store. This indicates a % share of the store revenues you are entitled to.
For your investment, you will receive 70% of the revenues your % share of the store generates, until you receive your investment back, plus 60% profit. Once this has been achieved, the investment is considered completed.
The ROI is estimated at 20% per annum, with the timeframe of the invesment being around 3 years, barring anything going particularly wrong.
- Security: This is a big one. As the stores will be located in population centers, there’s the ever-looming threat of theft, arson and any other number of crimes. This can lead to temporary or permanent disruption to the business. Agrikaab will aim to set up stores in the safest areas possible, but c’mon, it’s East Africa!
- Logistics problems: Getting this to the store in a timely fashion can be an issue. This is due to the cultural climate in East Africa at present.
- Climate-related problems: Droughts, floods, and other climate-related events can impact the revenues of farms, and thus their willingness or necessity to purchases supplies form their farming activities. BUT, this can be looked at the other way around and be a positive thing to increase the requirement for external supplies to feel livestock, or to grow crops.
- Excess inventory: There’s a chance too much stock will be bought(pretty much 100% chance IMO), Agrikaab believe they know the optimal product balance to but, but there are always variables. There is no way they will sell exactly 100% of their stock. They will be sourcing products in demand to minimize this risk.
- Insurance: There are no real insurance providers in Somalia/East Africa at this time, so if something is stolen or if the whole thing burns…well, I’ll let you imagine how well that will work out.
I’m not highly knowledgeable about the economic situation of farmers in Somalia. Then again, I’m not in the business of knowing.
Having this enterprise in Agrikaabs portfolio does give them access to more revenue streams while providing a very necessary service that according to the Agrikaab, does not exist at present. This also grants exposure to a different segment of the East African market giving a bit of diversification.
I’d be concerned with the lack of insurance on the store. Once something is stolen, that’s it, it isn’t coming back. My understanding is that crime is rather high in East African cities, so I wouldn’t have my hopes too high for a smooth store launch, nor continued operations.
For my opening investment, I have bought 200m3 of a Farm Pond in Galkacyo. I decided on this as it is a ground-level investment in a harsh environment that solves a fundamental problem in the agricultural sector – water supply.
This pond will supply other projects run by Agrikaab, so in a sense, it’s ‘selling shovels to the miners in a gold rush’. A hole in the ground is difficult to damage or steal, and security requirements are lower than the other assets on Agrikaabs site.
At this stage, it’s early days, so I am unable to report on any actual earnings, but I look forward to keeping you updated.
Update: Mohammed and Agrikaab are gone, and so is my investment capital. Please be wary of people who do not share the same moral and ethical values as you (and in-fact, HATE you and your moral system).
That’s about all I can share about Agrikaab at the moment. I plan on growing and modifying this page as the company matures, and my investment progresses.
If you do decide to go with Agrikaab, be aware of the risks this platform poses. Take a look at some of the horrendous crimes that occur in this part fo the world, and realize that this is just how their world is.
That said, the ROI is alright(there are better returns with less risk), but the impact is interesting, and I do genuinely believe capitalism is the way to provide sustainability to a region. Not simply give aid which undermines the effort-reward ratio – a key tenet of any viable economic system.
Thanks for reading, let me know your thoughts on Agrikaab below.