- 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.
British International Investment (BII), the UK’s development finance institution (DFI) and impact investor, over the weekend announced it has signed legally binding documents to invest US$15m in equity into a Singapore-headquartered agricultural commodities trading house, Valency International (Valency), to fund their expansion of processing and warehouse infrastructure in Nigeria.
The transaction is subject to regulatory approval and is expected to close in early 2024.
In addition to its commitment of $15m, BII has an option to invest a further $35m in equity into Valency within two years of completion of its initial investment.
Agriculture is a key contributor to Nigeria’s economy, accounting for a quarter of total gross domestic product, and employs more than one in three Nigerians.
Crop production is the largest segment within agriculture and it accounts for about 87.6 per cent of the sector’s total output.
However, food processing and manufacturing remains underdeveloped in the local agricultural sector.
The new Valency facilities, funded by BII will strengthen partnerships with local farmers and processing centres to maximise their output and provide a more stable supply of premium-quality products.
The projects are expected to reach at least an extra 60,000 farmers and create up to 2,800 jobs among low-income communities in Nigeria.
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 System (ESMS). Both parties will work closely to improve job quality and gender inclusion and enhance value creation.
Jonny Baxter, UK Deputy High Commissioner 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.”
Benson Adenuga, Head of Office and Coverage Director, Nigeria for BII said:
“The strategic opportunity to catalyse 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 industrialisation 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.”
Speaking on the signing, Mr. Sumit Jain, CEO of Valency International commented:
“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 to 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.”
Roman Frenkel, Head of Food and Agriculture at BII will join the Board of Valency as part of the transaction.
BII’s commitment contributes to UN Sustainable Development Goal 8 on Decent work and economic growth.
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