AfDB makes $9 million investment in Nigerian agribusiness vehicle
The fund is expected to deliver strong development outcomes including employment, women empowerment and inclusive growth.
The African Development Bank (AfDB) said on Thursday that $9 million has been approved by the bank as equity investment in the Fund for Agricultural Finance in Nigeria (FAFIN), the agriculture-focused investment fund.
Launched in December 2014, FAFIN provides capital and technical assistance to commercially-viable small and medium-sized enterprises (SMEs) and intermediaries in Nigeria's agricultural sector. The fund provides investment in agribusinesses using a combination of equity, quasi-equity and convertible loan instruments with an outlook for competitive financial returns and measurable positive social impact.
FAFIN is jointly sponsored by the German KfW Development Bank, Nigeria’s Ministry of Agriculture and Rural Development (FMARD), and Nigeria Sovereign Investment Authority (NSIA). The Fund Manager is Sahel Capital (Mauritius) Limited, a fund management firm incorporated in Mauritius in 2013.
With AfDB's investment, FAFIN will increase its committed capital to $43 million. FAFIN has a target of raising $100 million in investment fund.
The fund is expected to deliver strong development outcomes including employment, women empowerment, finance access and inclusive growth.
The fund’s primary focus is to developing the Nigerian agriculture value chain, reduce post-harvest loss, improve productivity and increase incomes of smallholder farmers.
AfDB said in a statement on Thursday that FAFIN's investment objectives align with the bank’s Ten Year Strategy, which prioritizes food security and access to local SME finance; and AfDB’s Strategy for Agricultural Transformation in Africa (2016-2025), Strategy on Jobs for Youth in Africa (2016-2025) and the Bank’s Country Strategy Paper for Nigeria (2013-2017), which supports an enabling environment for agriculture.
The financing is for the second phase of Uganda’s Farm Income Enhancement and Forestry Conservation Programme.
Notable achievements were recorded with regard to access to finance, community capacity-building and job creation.
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