The National Agricultural Development Fund (NADF) and Sahel Capital Fund Manager Limited have signed a Memorandum of Understanding (MoU) to explore opportunities for expanding financing to agribusinesses in Nigeria.
The partnership is aimed at reducing the cost of financing for agribusinesses and jointly addressing challenges affecting agricultural productivity and value chains.
Speaking at the signing ceremony on Friday in Abuja, Mr Mezuo Nwuneli, Managing Partner of Sahel Capital, commended NADF for its interventions in addressing critical challenges in the agricultural sector.
He said the fund’s interventions in ginger production, provision of farm inputs to farmers and promotion of irrigation demonstrated its commitment to resolving key constraints in the agricultural ecosystem.
Nwuneli said Sahel Capital was attracted 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 obtained loans at interest rates of between 24 and 27 per cent, limiting their capacity to expand operations and invest in growth.
According to him, the collaboration would enable NADF to provide capital alongside Sahel Capital, reducing the blended cost of financing for eligible businesses.
“Lower cost of financing means you can do more, you’re more economically viable, and there’s more of your cash flow going to growth versus financing,” he said.
He said both institutions would establish a process for identifying priority areas requiring intervention and jointly deploying resources and expertise to address them.
Nwuneli said Sahel Capital had made 45 investments across eight African countries in the last 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 leverage its experience with different financing instruments to strengthen Nigeria’s agricultural sector.
The Executive Secretary of NADF, Mr Muhammed Ibrahim, said the partnership was designed to move agricultural financing beyond conventional lending towards building an investment ecosystem capable of attracting more capital into the sector.
Ibrahim said the collaboration would combine public-sector and concessionary capital with private investment expertise to establish a sustainable financing framework.
He said the arrangement would create opportunities for other institutional investors to participate in financing viable agribusinesses and benefit from the sector’s investment potential.
Ibrahim noted that although agriculture was often perceived as a high-risk sector, appropriate financing structures and partnerships could unlock significant investment opportunities.
He said NADF would contribute its catalytic and development mandates, alongside 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 access to capital for eligible agricultural businesses.
He added that other areas of cooperation would include identifying bankable agribusiness projects, information sharing, technical assistance and capacity building.
