A $9 million equity investment has been approved by the African Development Bank for the Fund for Agricultural Finance in Nigeria (FAFIN). The investment is set to provide expansion capital to agricultural small and medium-sized enterprises (SMEs). The Fund is jointly sponsored by the German KfW Development Bank and the Government of Nigeria, through the Federal Ministry of Agriculture and Rural Development (FMARD). The project is expected to deliver strong development outcomes from (i) household benefits and employment through the creation of a large number of jobs and the provision of certain agricultural products; (ii) positive gender and social effects through the implementation of out-grower schemes and supporting rural development; and (iii) private sector development through alleviation of financial constraints faced by agribusinesses and enhancing agricultural value chains.
Five years ago, on the back of the real estate market freezing, Hoang Anh Gia Lai Group (HAGL) owned by Doan Nguyen Duc, one of the most influential businessmen in Vietnam, announced its plan to invest in an agricultural project to seek more sustainable development. This made the group the first big conglomerate in Vietnam to make a strong commitment to invest in the agriculture sector. The second stock billionaire who jumped on the bandwagon was Pham Nhat Vuong, the richest Vietnamese stock billionaire and dollar billionaire recognized by Forbes.
Kanayo Nwanze, the president of the International Fund for Agricultural Development (IFAD), believes that investments in agriculture can unlock prosperity in Africa and cut down the food import bill by about $35 billion. Nwanze made the assertion at the Grow Africa Investment Forum and the World Economic Forum (WEF) on Africa, held in Kigali, Rwanda, recently. “Investments in agriculture can generate great riches for the continent and lift millions out of poverty and hunger,'' he added that countries that had heavily invested in agriculture are today reaping huge revenue generation and foreign exchange, and unemployment has drastically reduced.
Nigeria’s key development partners under the New Alliance Cooperative Agreement Framework/Grow Africa initiative are committed to a funding equivalent of N100bn ($500m) for the country’s agricultural sector for a three-year period, the Federal Government has said. It also stated that international and local business establishments were committed to make investments of about $4bn (N800bn) in the agricultural sector.
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