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US Agency for International Development (USAID) has unveiled USD 300 Mn agribusiness investment in a bid to boost Nigerian MSMEs.
USAID launched ‘Feed the Future’ initiative in Nigeria under a new contract with Cultivating New Frontiers in Agriculture (CNFA), an international agricultural development organisation. The program aims at building an enabling environment to boost private sector investment in Agribusiness value chains.
The Agribusiness Investment program will work together with Nigeria’s agribusiness sector to integrate and upgrade thousands of micro, small and medium enterprises (MSMEs) as well as producer organizations high-performing commercial actors in the rice, maize, soy, cowpea, and aquaculture value chains.
The project also aims to help Nigeria develop and strengthen a more business-enabling environment hence increased investment. They intend to achieve this through promoting private-sector investment in agriculture. Through CNFA, USAID will work to improve the ease of doing business in the agricultural sector, broaden access to finance by mitigating the credit risks of agribusinesses, and promote investment opportunities for agribusinesses to expand and scale up operations.
“This activity will pursue a unique, robust business-centred strategy to implement this Feed the Future initiative in Nigeria,” said Chief of Party Adam Saffer. “Under this approach, the activity will partner with domestic and multinational companies in order to more effectively bridge the gap between government and the private sector – and to distribute the economic benefits of the project more broadly across Nigeria’s agribusiness sector.”
The activity will help Nigerian entrepreneurs increase the competitiveness and returns of both large and small agricultural enterprises through advocacy for streamlined regulations, more effective policies, improved production and processing practices, and significantly increased finance and investment flows.
Through the five-year period it will operate, the Agribusiness Investment Activity aims to facilitate USD 200 Mn in new lending and USD 100 Mn in new investment in the following seven designated Nigerian states: Kaduna, Niger, Kebbi, Benue, Delta, Ebonyi, and Cross River.
Agriculture is the most important sector in the Nigerian economy. It employs 60 percent of Nigerians, including many rural women, and contributes up to 35 percent of the country’s GDP. The sector has huge potential. The country has a substantial base to build upon: its natural assets including land (39.6 million hectares of arable land, of which 60 percent is under cultivation).
Smallholder farmers in Nigeria just like many parts of Africa face a major challenge of lack of access to credit facilities. According to a report released earlier, over 90 per cent of smallholder farmers in Nigeria did not access loan facilities from conventional banks. This is in defiance of the fact that agricultural credit is imperative in small-scale farming: it enables farmers secure viable seeds, equipment and fertile land needed to run a successful farm which in turns yields an increase in agricultural production and poverty reduction.
The USAID initiative is however expected to boost MSMEs and broaden Nigeria’s agribusiness sector hence better productivity and improved living standards.
Featured Image Courtesy: StartUp Magazine
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