Britain’s foreign investment agency has hit back at concerns it has not risked enough money in Ebola-plagued Sierra Leone by pumping $15m (£10m) into a timber business based in the West African state.
London-based Miro Forestry will use the cash to expand its current operations from 1,700 to 8,700 hectares in Sierra Leone and Ghana. This is the equivalent of nearly quadrupling the number of eucalyptus and teak trees it can plant for timber to around 11.3 million.
This is the CDC Group’s (formerly known as the Commonwealth Development Corporation) first direct investment in a company operating in Sierra Leone, though it did back the country’s first private equity fund in 2009. Last week, The Independent revealed that Paddy Docherty, chief executive at Phoenix Africa, was unable to secure CDC investment for a southern Sierra Leonean rice-producing subsidiary he believes will soon become the country’s biggest food company.
He added that CDC was acting like a typical institutional investor as it wanted “a proven concept”, when it should be looking to use its money as a “catalyst” for growth in poor countries. There have been wider concerns that CDC is being too careful with its investments so as to not be accused of risking losses on taxpayer money.
CDC insiders believe that the Miro investment shows that the organisation is working hard to help Sierra Leone rebuild what was a fast-growing, but delicate post-civil war economy, before the Ebola virus spread so violently last year. Doctors have now got the crisis under control, but the World Bank has estimated that the three countries worst hit by the epidemic - Sierra Leone, Liberia, and Guinea - lost at least $1.6bn of economic growth in 2014.
Sierra Leone’s finance minister, Dr Kaifala Marah, said: “CDC’s investment in our forestry sector… comes at a time when the industry is faced with daunting challenges exacerbated by the Ebola crisis.”
Miro’s chairman, Richard Laing, used to be head-up CDC, which is backed by the Department for International Development and has investments across Africa and South Asia that are valued at £2.5bn. Miro chief executive Andrew Collins said: “Sustainable plantation forestry is naturally a business that can provide competitive financial return, whilst significantly improving the long-term economic, social and environmental position of the rural areas in which we operate.”
The investment will also be welcome in Ghana, where illegal logging helped reduce its forest by 25 per cent. At that rate, Ghana’s forests could completely disappear within 13 years.Reuse content