The National Agricultural Development Fund (NADF) has unveiled a blended finance initiative aimed at attracting private sector investment into Nigeria’s agricultural sector by de-risking agribusiness investments and unlocking billions of naira in untapped capital.
The initiative was unveiled on Tuesday at a Blended Finance Workshop for Fund Managers organised by NADF in partnership with Convergence Blended Finance, a global network focused on mobilising private capital into emerging markets.
Speaking at the event, the Chief Executive Officer of NADF, Mohammed Ibrahim, said Nigeria’s agricultural transformation would require significantly more capital than government alone could provide.
Ibrahim, who was represented by the fund’s General Manager, Partnerships and Investor Relations, Nasir Ingawa, described agriculture as central to Nigeria’s food security, job creation, industrial growth, export potential and overall economic prosperity.
According to him, public funding alone cannot finance the transformation of Nigeria’s agricultural sector, while private capital will not flow at the scale required unless investment risks are better understood, allocated and managed.
“NADF is positioning itself as a catalyst within the agricultural finance ecosystem by connecting investors with credible agribusiness opportunities and helping to structure investments that can attract commercial funding.
“The fund will serve as a convener capable of bringing together capital providers, technical experts, guarantee institutions and agribusiness operators.
“Our role is to facilitate, convene, curate credible and investable pipelines, and expose those opportunities to partners who have the capital, technical expertise and market discipline required to take them forward,” he said.
Also speaking, the Head of Africa at Convergence Blended Finance, Aakif Merchant, said agriculture remained one of Nigeria’s most important economic sectors, contributing about 30 per cent of Gross Domestic Product and accounting for approximately 35 per cent of employment.
However, he noted that the sector continued to struggle to attract adequate private investment because of perceptions of high risk.
Merchant said recent regulatory changes permitting pension funds to allocate up to 10 per cent of their portfolios to alternative investments presented a major opportunity to channel institutional capital into agriculture.
According to him, blended finance offers a practical mechanism for mobilising such funds by combining development capital with private investment in ways that reduce risk and improve the attractiveness of agricultural projects.
“Unfortunately, agriculture in Nigeria is perceived as a high-risk sector.
“This forum is intended to explore the use of blended finance as a financial structuring approach to de-risk investments and mobilise capital that is currently sitting on the sidelines into the sector for the benefit of the country,” he said.
Merchant explained that blended finance specifically uses catalytic funding from development partners, governments and philanthropic organisations to attract commercial investment into sectors that might otherwise struggle to secure financing.
He added that successful blended finance transactions are built around three key pillars: financial leverage, development impact and investor returns.
The Convergence Africa head identified currency volatility, high transaction costs and lack of scale as major concerns for investors, stressing the need to aggregate viable investment opportunities and strengthen export-oriented and import-substitution value chains.
According to him, Nigeria has substantial opportunities to reduce imports in areas such as palm oil and fish production while creating jobs and conserving foreign exchange.
“We heard that Nigeria imports significant volumes of palm oil, even though palm oil originated from this region.
“The same applies to fish in spite of the country’s extensive coastline. Import substitution remains a significant opportunity,” he said.
