The five-year USAID Feed the Future Nigeria Agribusiness Investment Activity aims to strengthen the business enabling environment to promote private sector investment in the agriculture sector. To achieve this goal, the activity focuses on three interrelated components: improving the ease of doing business in the agricultural sector; broadening access to finance by mitigating the credit risks of agribusinesses; and promoting investment opportunities for agribusinesses to expand and scale up operations. In line with the U.S. and Nigerian governments’ commitment to growing the non-oil-based economy, these efforts will increase the quality, quantity, market access, and diversification of Nigeria’s agribusiness sector.
Beginning in December 2018 and closing in December 2023, the$15.7million Agribusiness Investment Activity, with Cultivating New Frontiers in Agriculture (CNFA) as the prime implementing partner, aims to integrate thousands of micro small and medium enterprises (MSMEs) and producer organizations as high-performing commercial actors in the rice,maize, soybean, aquaculture, and cow pea value chains. As a result of streamlined regulations, more effective policies, improved production and processing practices, and significantly increased finance and investment flows, the project will increase the competitiveness and returns of both large- and small-scale agricultural enterprises.
The Agribusiness Investment Activity’s three main components are:
- Ease of Doing Business – The regulatory burdens faced by agribusinesses (whether farmers, processors, or traders) constrain their productivity and growth. This initiative targets relevant World Bank Doing Business indicators and seeks to implement reforms to improve Nigeria’s agricultural and agribusiness enabling environment.
- Access to Finance – The infrastructure and market reach of both formal and informal banking services remains inadequate in many regions, presenting a significant barrier for rural agricultural entrepreneurs. The Agribusiness Investment Activity works to expand access to financial services across the value chain through informal, community-based savings plans; formal and
informal credit; guarantee programs; insurance offerings, and more.
- Investment Promotion – To catalyze new agribusiness investments, the Agribusiness Investment Activity improves the investment readiness of agribusinesses, supports enterprises to scale-up operations, and links agribusinesses with both domestic and international investors.
The Agribusiness Investment Activity employs a unique strategy that places the direct facilitation of growth for existing private sector agribusinesses as the central engine of our work. The activity is working with select large agribusinesses as well as the suppliers, financiers, investors, and service providers within their value chains to assist them in realizing their individual growth and expansion objectives. This includes building the capacity of their supply and distribution chains, where applicable, and supporting the reform of the most pivotal legal and regulatory constraints.
The Agribusiness Investment Activity strategy includes but is not limited to the following key pillars:
- Working with public and private sector partners, including agribusinesses, financial institutions, investment groups, and business development service providers to facilitate greater engagement with MSMEs and potential agro-entrepreneurs in their value chains;
- Connecting entrepreneurs and MSMEs to services (e.g., business plans, loan applications) that support them from inception to the formation and growth of profitable, sustainable enterprises. Special emphasis will be given to MSMEs that are women-owned or have the potential to hire significant numbers of women and youth; Supporting the development of new financial products suitable for MSMEs and entrepreneurs and implementing public awareness programs to enhance financial literacy and management;
- Linking MSMEs and entrepreneurs with larger firms in the selected value chains to facilitate commercially viable and sustainable business linkages; and
- Addressing policies that restrict or constrain the ease of doing business, including registration, licensing, obtaining land, access to finance and investment, and exporting.