UK commits $15m to Nigeria’s agric sector

The British International Investment, the United Kingdom’s development finance institution and impact investor, has concluded plans to invest $15m in equity into a Singapore-headquartered agricultural commodities trading house, Valency International.

Announcing this in a statement on Tuesday, BII said that the fund was for the expansion of processing and warehouse infrastructure in Nigeria.

According to the organization, the transaction is subject to regulatory approval and is expected to close in early 2024.

The firm said in addition to its commitment of $15m, BII has the option to invest a further $35m in equity into Valency within two years of completion of its initial investment.

“The support will create up to 2,800 jobs for low-income workers across the country. It will also provide market access indirectly to a further 60,000 smallholder farmers and boost agricultural output and export. The new Valency facilities, funded by BII will strengthen partnerships with local farmers and processing centers to maximize their output and provide a more stable supply of premium-quality products,” the statement read in part.

 BII added that despite agriculture being a key contributor to Nigeria’s economy, accounting for a quarter of the total gross domestic product, and employing more than one in three Nigerians, food processing and manufacturing remained underdeveloped in the local agricultural sector.

“Crop production is the largest segment within agriculture and it accounts for about 87.6 per cent of the sector’s total output. BII, as the first institutional investor in Valency, will provide value-added support to the company in developing best practices in business integrity and Environmental and Social Management Systems. Both parties will work closely to improve job quality and gender inclusion and enhance value creation,” he said.

 Speaking on the investment, UK Deputy High Commissioner, Jonny Baxter, said “The UK’s sustainable agriculture work in Nigeria helps to not only mitigate greenhouse gas emissions and adapt to a changing climate, but strengthens livelihoods and improves nutrition, supporting food security and poverty alleviation. I am excited to welcome this new UK investment to help enhance Nigeria’s food processing capabilities, which will create jobs across the nation. We look forward to continuing to support Nigeria’s agriculture sector and the opportunities this provides for its economic growth,” Baxter said.

Also speaking, the Head of Office and Coverage Director, Nigeria for BII, Benson Adenuga, said, “The strategic opportunity to catalyze growth in Nigeria’s food and agricultural sector should be seized and offers the chance to leverage its immense food export potential. We are proud to deepen our commitment to food security and smallholder farmers in Nigeria while creating jobs that enable industrialization and facilitate regional and international trade. We are delighted to partner with Valency, and we look forward to the significant impact and economic development that our catalytic capital will support,” Adenuga explained.

Earlier, the Chief Executive Officer of Valency International, Mr. Sumit Jain, said “We have been careful and deliberate in our choice of partners for the next phase of our growth. While we have been approached by a variety of investor groups, we chose to partner with BII as we have been impressed by BII’s engagement in the regions where we have committed to invest substantially over the medium term. Equally, we are privileged that BII has chosen Valency to drive its impact agenda in Nigeria in the growing food and agriculture sector,” he concluded.