Nigeria appears to have started getting the needed solutions to the challenges facing its agriculture sector especially in processing its many agriculture products to meet global market standards for competitiveness value addition and boost its agro industries.
This assuring piece of information emerged on Thursday when United Kingdom- backed firm, GuarantCo announced that it has provided a 100 percent guarantee to support a USD 75 million debt facility for Robust International Pte Ltd to construct a new cashew nut processing plant in Ogun State, Nigeria.
From a statement issued on Thursday by Amaka Eze, Press officer at the British Deputy High Commission in Lagos, this move has become necessary to enhance the capacity for local processing in order to add value to cashew nuts instead of the current situation where raw cashew nuts are exported unprocessed.
It came at a time Nigeria is grappling with challenges in this sector such as unreliable power and bad roads, limited access to financing, and high post-harvest losses due to inadequate storage. These factors, combined with inconsistent quality control, inefficient supply chains, and low technological adoption, limit value addition and international market competitiveness.
Nigeria is one of Africa’s largest cashew producers of about 250,000 to 300,000 tonnes of raw cashew nuts annually, yet currently less than 10 per cent are processed domestically. Most raw nuts are exported unprocessed to Asian and other countries, forfeiting up to 80 per cent of their potential export value and adding exposure to foreign exchange fluctuations.
However, this additional plant will more than double Robust’s existing cashew processing capacity from 100 MT per day to 220 MT per day to help reduce this structural gap.
The new plant will be of extensive benefit to the local economy, with procurement of cashew nuts from c. 10,000 primarily low-income smallholder farmers. There is an expected increase in export revenue (c. USD 335 million) and procurement from the local supply chain over the lifetime of the guarantee.
GuarantCo is a part of the Private Infrastructure Development Group (PIDG) funded by the governments of UK, Switzerland, Austria, and Sweden to boost Nigeria’s productive economy. It mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia.
British Deputy High Commissioner, Mr. Jonny Baxter, expressed optimism that the plant will improve Nigeria’s processing potential. He said “by backing investment into local processing and value addition, this transaction supports jobs especially for women, exports and more resilient agricultural supply chains.”
He noted that this is complemented through the UK-Nigeria Enhanced Trade and Investment Partnerships and the Developing Countries Trading Scheme, adding that “the UK is supporting Nigerian businesses to scale exports to the UK and beyond, demonstrating how UK-backed partnerships help firms grow and compete internationally.”
Also reacting Dave Chalila, head of Africa and Middle East Investments at GuarantCo, said: “This transaction marks GuarantCo’s third collaboration with M&G Investments and Symbiotics, emphasising our efforts to bring replicability to everything we do so that we accelerate socio-economic development where it matters most.
“The transaction is consistent with PIDG’s mandate to mobilise private capital into high impact, underfinanced sectors and in this case crowding in institutional investors to the African agri-processing value chain.”
Vishanth Narayan, Group Executive Director at Robust International Group, in his reaction said “As a global leader in agricultural commodities, Robust International remains steadfast in its commitment to building resilient, ethical and value-adding supply chains across origin and destination markets.”
Also speaking María Redondo, director at M&G Investments, noted “We’re pleased to partner again with Symbiotics and GuarantCo on this innovative transaction. The guarantee gives us the assurance to invest in hard currency, emerging market debt while supporting Robust’s new cashew processing plant in Nigeria. It’s a clear example of how smart credit enhancement can unlock institutional capital for high impact development and manage currency and credit risks effectively. This is another strong step in channelling institutional capital into meaningful, on‑the‑ground growth.”
Reacting Valeria Berzunza, Structuring and Arranging at Symbiotics, said “this third collaboration reinforces the value of developing structured financial products through strategic partnerships to mobilise investment from institutional investors seeking exposure to highly rated securities, into high impact projects in emerging markets.”
It is hoped this project will be sustained through this collective effort and not be sabotaged by inconsistencies in policies and other encumbrances associated with project growth in Nigeria.
