ABU DHABI // A social responsibility company is planning to set up a sustainable organic farming system in Ghana.
Nahtam will acquire 4,000 acres of land in the capital city of Accra, which will produce food while offsetting carbon production.
"Carbon footprint is a global issue and the simplest and easiest method to offset carbon is to plant as many trees as you can," said George Itty, chief executive of Nahtam.
"Since we are based in Abu Dhabi, planting trees in a desert like the UAE can be very expensive, so you can plant them in Ghana or anywhere else in the world. As long as the trees are there, we are offsetting carbon footprint."
The project will employ 2,000 Ghanaians to work on the land, where 36 villages have already been set up. Crops will include bananas, palm oil, avocados, mangoes and pineapples. The products will be sold locally and exported to countries including the UAE.
"We will also have exotic trees like teak and rubber plantations," Mr Itty said. "Teak is a long-term investment, it takes many years to get the result out of it but we're going for tissue culture, so it won't be that long. Rubber plantations are also something that worldwide investors will get a return on."
Getting the land took a year and is expected to be finalised next month. The aim of the project is to make it 100 per cent sustainable.
"We won't use chemicals," Mr Itty said. "Even the power will be from solar and wind so it will be sustainable."
Work on the land will start in six months and the trees are expected to mature in two to three years.
Food production is anticipated to begin as early as next summer.
"We chose Ghana because it has abundant rainfall and enough sunlight, and trees need sufficient sunlight and water," Mr Itty said. "We have land availability, which is not very expensive, the weather is excellent and we have healthy manpower there who need jobs."
The amount of carbon reduction will depend on each tree.
"Once we decide on the species we will plant, we will be able to find out how much we can offset," Mr Itty said. "But it'll be a huge number."
Experts believe more people are starting to acknowledge the importance of offsetting carbon.
"Although the European carbon market has pretty much collapsed, people recognise that stopping deforestation and replanting forests is very important in tackling climate change in the longer term," said Robin Mills, head of consulting at Manaar Energy in Dubai.
"About 20 per cent of greenhouse gas emissions are from land clearance from deforestation so, although it might not be important for companies individually, it's important from a global point of view."
Mr Itty will invite investors from the UAE to take part in the project in three months.
Nahtam's interests go beyond the environment - the company has also embarked on a medical programme in India.
"We spoke to retired doctors in villages near Kerala and Bombay to find out how many would be available to volunteer to have out-patients," he said. "We want to have clinics and doctors checking, giving medicine and basic health guidance, as well as offering them to big hospitals if there is something chronic."
Although the project is still in its early stages, it is expected to start in a year. So far, more than 10 doctors have been consulted, a few of whom have expressed interest.
"It will take time to motivate and put them together," Mr Itty said.
cmalek@thenational.ae
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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