The West Africa Trade & Investment Hub funded by the USAID has collaborated with an investment and economic development advisory firm, CrossBoundary to provide a $14 million private investment fund to assist small and medium enterprises (SMEs) that operates in the West African agribusiness industry.
The program is founded to help corporations that engage in developing the cash flow and operational resilience among the SMEs impacted by the Covid-19 pandemic.
The funding will be used in assisting high-potential SMEs in Nigeria, Burkina Faso, Mali, and Ghana to raise funds and seal financial deals.
Chief of party of West Africa Trade and Investment Hub, Michael Clements, said in a statement “This partnership will facilitate the flow of private capital into the agricultural sector in a way that increases sustainability and puts the sector firmly on the path to self-reliance.”
“Equally important, the partnership and project promote the goals of Feed the Future, as it directly facilitates market linkages with the private sector through the agribusiness value chain,” Clements said.
Half of the transactions will be set aside for Nigeria, although part of the US government’s Feed the Future initiative, the Trade Hub is working to introduce new technology in agriculture.
The CrossBoundary has taken a portfolio approach to help SMEs to get an innovative solution to the current problem.
Despite the need for the bodies’ easy access to funding, agribusiness SMEs are basically lacking adequate support due to the existing prohibitive transaction and financial product costs.
The agricultural sector’s SMEs have been a major backbone to the economies of the West African countries, therefore it is important to increase their competitiveness. The CrossBoundary and Trade Hub partnership is expected to help provide 500 jobs.
As a result, around 6,000 people will benefit which includes via the increase in food production by the supported agribusiness SMEs.
The Managing Partner at CrossBoundary, Jake Cusack said, “We are glad to take part in the collaboration where we serve as an intermediary to assist in unlocking private capital by systematically overcoming the barriers to investing in the region.”
Cusack further said, “We have implemented a similar model in other African countries, therefore we plan to extend the Trade Hub’s resources beyond the projected targets, while doing that, directly impact livelihoods, drive economic growth, and create opportunities.”
As part of the agreement, CrossBoundary will capitalize on the $1.5 million grant provided by Trade Hub to channel at least $14 million in private investment to an agribusiness portfolio which includes smaller farms that are not eligible to receive direct funding from Trade Hub.
The grant is awarded via the Trade Hub initiative in partnership with advisory firms and financial institutions to enhance SMEs’ access to finance.
