The National Agricultural Development Fund (NADF) and Sahel Capital Fund Manager Ltd. have signed a memorandum of understanding (MoU) to explore ways to expand financing for agribusinesses in Nigeria.
The partnership aims to reduce financing costs for agribusinesses and jointly address challenges affecting agricultural productivity and value chains.
Speaking at the signing ceremony in Abuja on Friday, Mezuo Nwuneli, managing partner of Sahel Capital, commended NADF for its efforts to address key challenges in the agricultural sector.
He said the fund’s support for ginger production, provision of farm inputs and promotion of irrigation demonstrated its commitment to tackling constraints across the agricultural ecosystem.
Nwuneli said Sahel Capital was drawn to the partnership by NADF’s deliberate approach to addressing agricultural challenges and its commitment to achieving significant impact.
He said many small and medium-sized agribusinesses currently obtain loans at interest rates of between 24 and 27 per cent, limiting their ability to expand and invest in growth.
According to him, the collaboration would enable NADF to provide capital alongside Sahel Capital, lowering the blended cost of financing for eligible businesses.
“Lower financing costs mean you can do more, become more economically viable, and direct more of your cash flow towards growth rather than financing,” he said.
He said the two institutions would establish a process to identify priority areas for intervention and jointly deploy resources and expertise to address them.
Nwuneli said Sahel Capital had made 45 investments across eight African countries over the past 15 years, providing growth equity and private credit to businesses with annual revenues ranging from N500 million to N20 billion.
He said the firm would draw on its experience with different financing instruments to strengthen Nigeria’s agricultural sector.
Muhammed Ibrahim, NADF’s executive secretary, said the partnership was designed to move agricultural financing beyond conventional lending and towards building an investment ecosystem that could attract more capital to the sector.
Ibrahim said the collaboration would combine public-sector and concessional capital with private investment expertise to establish a sustainable financing framework.
He said the arrangement would create opportunities for other institutional investors to help finance viable agribusinesses and benefit from the sector’s investment potential.
Although agriculture was often perceived as a high-risk sector, Ibrahim said, appropriate financing structures and partnerships could unlock significant investment opportunities.
He said NADF would contribute its catalytic and development mandates, along with its understanding of national agricultural priorities, while Sahel Capital would provide market knowledge, investment expertise and experience across agricultural value chains.
“The agricultural sector is often viewed through the lens of risk, but beyond those risks lie enormous opportunities.
“What we are doing with Sahel Capital is a deliberate shift from simply financing agriculture to building an investment ecosystem where capital can flow sustainably into the sector, attract more investors and support the growth of agribusinesses,” he said.
Ibrahim said the partnership would explore blended financing arrangements, including concessional funding and risk-sharing mechanisms, to improve eligible agricultural businesses’ access to capital.
He added that other areas of cooperation would include identifying bankable agribusiness projects, sharing information, providing technical assistance and building capacity.
