Crowdfarming, once celebrated as a revolutionary approach to financing agriculture, is now facing a crisis of trust across Africa. Platforms which emerged as champions of smallholder farmers and accessible investments, are encountering operational and financial challenges that have shaken investor confidence. Complaints of unpaid returns, regulatory scrutiny, and allegations of mismanagement have cast a shadow over the promise of crowdfarming.
South Africa’s Livestock Wealth is the latest of such ventures to come under intense scrutiny. Investors have raised alarms over delayed payouts and unfulfilled commitments. Since mid-2024, complaints about the platform have grown, with concerns mounting after the Financial Sector Conduct Authority (FSCA) launched an investigation into its operations.
Despite CEO Ntuthuko Shezi’s initial reassurances, including the publication of email exchanges with the FSCA asserting that Livestock Wealth did not need to register as a financial services provider, recent developments suggest deeper problems. Investors have reported significant delays in withdrawals, with some waiting months without resolution.
A New Zealand-based investor, for instance, recently shared his frustration with local news outlet, Moneyweb: “I submitted a withdrawal request in April 2024, and it still hasn’t been processed. Many others are facing similar issues.” Screenshots of Google reviews reveal a growing chorus of similar complaints, with accusations that the platform resembles a pyramid scheme.
Members of South Africa’s Ngqoda Stokvel are, reportedly, also among those most affected. Having invested over R100,000 ($5,500) in 2022, the group anticipated withdrawing their funds in March 2024. After months of delays, they were promised payments in November and December, but those deadlines also passed without fulfillment. “We’ve been given the runaround. I even visited their offices, but no payments have been made,” stokvel’s chairman, Siza Ziphethe, was quoted as saying.
The FSCA’s investigation into Livestock Wealth is ongoing, with the authority promising a final decision by mid-December. Meanwhile, the platform’s terms and conditions have drawn criticism for disclaiming liability. According to Livestock Wealth, any disputes or liabilities lie between the investors and the farmers, with the platform serving merely as an intermediary. Investors argue, however, that they only interacted with Livestock Wealth and were never introduced to individual farmers or specific assets.
The lack of financial transparency further fuels investor skepticism. Some investors have expressed concerns, claiming that the company’s financial statements are not publicly available, making it difficult to assess its solvency. Additionally, there are allegations that funds are not being managed separately by product, raising significant concerns about the company’s financial practices.
“I have been pleading for over a year to receive my payout for my Connect Garden investment. I deeply regret ever putting a cent into this place. It’s incredibly painful [not] to get your money back, and now they’re ignoring my requests — including those directed to their marketing manager and CEO. I wish I could turn back time and invest in a more ethical organization,” one frustrated investor shared.
Livestock Wealth’s struggles echo broader challenges in Africa’s crowdfarming sector. ThriveAgric, a Nigerian agritech platform, faced its own reckoning in 2020 when investor defaults and operational missteps nearly led to its collapse. The company survived by pivoting away from retail investors to institutional partnerships, securing funding from commercial banks and international organizations like the World Food Programme.
Other platforms have also not been as fortunate. In 2023, Nigeria’s Investments and Securities Tribunal ruled against Agropartnerships, freezing its accounts and deeming its activities illegal. This decision came after several investors mass-reported the platform for failing to return their investments. This has compounded the woes for Africa’s startups desiring to explore the crowdfarming route in the future.
The ordeals of these startups, experts say, may not be coincidental. They could point to a more fundamental problem facing the crowdfarming model in Africa. However, the commonalities in these issues — the human element of financial mismanagement by the companies’ founders — make the situation even more complicated.
A Crisis of Confidence
The rise and struggles of crowdfarming platforms illustrate the complexities of balancing innovation with accountability. Initially lauded for democratizing access to agricultural investments, these platforms now grapple with a crisis of confidence. Investor complaints about delayed payments, opaque financial practices, and regulatory investigations have eroded trust.
As Livestock Wealth awaits the FSCA’s decision, the future of crowdfarming in Africa remains uncertain. For investors, the promise of supporting agriculture while earning returns has turned into an exemplary tale. For the sector to regain its credibility, platforms must prioritize transparency, regulatory compliance, and investor trust. Without these, the crowdfarming dream risks becoming another broken promise in Africa’s financial landscape.