The civil war in Sierra Leone lasted from 1991 to 2002. Hamza Hashim explains: "Before the conflict, Sierra Leone exported about 30,000 tons of cocoa a year. But it was on the cocoa fields that the fiercest fighting took place. When the war ended, the cocoa plantations were overgrown, and many cocoa trees had died. No one believed that the farmers would return to the neglected plantations.”
"So, our family business started to pre-finance farmers to revive the cocoa plantations. We gave farmers tools and seeds for new trees. When I took over my father's business, I wanted to make a change. The price of cocoa was determined too much by the traders far away in offices and not by the farmers themselves. They were at the mercy of the middleman, and this often led to exploitation. I decided that all our cocoa should be organic. Not only does it offer better margins, but it is also better for the environment.
Capitol Trading was the first company in Sierra Leone to obtain UTZ certification, a benchmark for sustainable cocoa production. Children are not allowed to work on the plantations and farmers do not use chemicals and fertilisers.
“In 2015, we were also the first in the country to achieve organic certification. The farmers gained an average income increase of 5% to 10% and are assured of regulated purchase. We have now built a factory to keep the first step of the processing process in Sierra Leone itself and not outside. The more we process cocoa in Sierra Leone, the better for the farmers and factory workers.”
Long-term relationship
Hivos-Triodos Fund has built up a long-term relationship with Capitol Trading, the sister company of Capitol Foods. Since 2016, the fund has provided trade finance loans to Capitol Trading for the export of their organic certified cocoa. By providing such loans at the point of harvest, smallholder farmers can be paid in cash, bridging the gap between processing, storage and shipment until payment by the buyer.
The whole sector in Sierra Leone has become fairer and more sustainable. Hamza continues: "Recently we also set up a juice factory. I saw mangoes rotting the ground on many farms. Children were played with them. Now the fruit is converted into juice, and the farmers earn a wage from the fruit. On a recent visit to one farm, I didn't see any children playing. ’Do they miss the mangos?’ I asked. ‘No. They're in school for the first time in their lives,’ said the farmer.” That's the change that drives Hamza.
In 2020, Hivos-Triodos Funds, together with Cordaid, provided a USD 1 million long-term debt facility to Capital Foods, which allows the company to expand its operational and storage capacity. This is instrumental in Capital Foods’ ambition to increase direct sourcing from smallholder farmers and to grow their farmer network to over 10,000 in the coming years.
Explore our impact report ‘Bolstering the food transition’ to find out more about our role as investor in the food transition. The report presents our 2020 results in a context of numbers and stories and showcases our mission to make money work for positive change.