Catalyzing Economic Growth in the Region | |
Working with 86 private-sector companies to address critical issues in West Africa through co-investment partnerships | |
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By Robin Wheeler
As we round up the final quarter of the Trade Hub’s third year of operation and the awarding of all but a few grants, we are working diligently with our partners to ensure they achieve their expected outcomes by implementing their co-investment projects.
The Trade Hub kicked off in 2019 with the primary goals of stimulating economic growth and social development throughout West Africa. Thus far, we’ve seen many successes through co-investing in the growth projects of private sector enterprises—in selected geographies and value chains—through a partnership model that mitigates risks for new investment projects, creates jobs, and increases the volume and value of West African exports.
As of September 30, the Trade Hub has signed grant agreements with 86 companies across different sectors in West Africa. These partners have been awarded a total of $78 million in grants, have leveraged $146 million in private capital, have created over 32,000 jobs, and have achieved $36 million in sales and exports.
Our work with these partners will continue to yield results, particularly as shown in our five thematic areas: improving food security, addressing climate change risks, promoting gender and social inclusion, improving agribusiness competitiveness, and promoting trade and exports. The Trade Hub will continue to provide technical assistance to these businesses to ensure they achieve maximum results.
Moving into the fourth year of the Activity, we continue to present and showcase our co-investment partners and their impacts across these five thematic areas, which also align with the UN’s Sustainable Development Goals. In this issue of The Hub Newsletter, we will share stories about the extraordinary work done by our partners and how it contributes to USAID’s strategic goals in West Africa.
Improving Food Security: Hunger and malnutrition are often linked to extreme poverty and lack of access to sufficient, nutritious food. According to the Center for Global Development, up to 40 million people could be pushed into poverty and food insecurity this year because of the conflict between Russia and Ukraine. Through our co-investment grants, many of our partners are working with smallholders and other partners to increase farmers’ incomes and productivity, increase quality yields, and increase access to nutrition for rural and urban communities. In this newsletter, you will learn about our co-investment awards of $2.65 million to four Nigerian companies—Okele Agro Farms, Hybrid Feeds, Tiddo Fish, and Tecni Seeds—who are all implementing activities that will help improve food security in Nigeria.
Addressing Climate Change Risk: Climate change poses a significant challenge to economic and socioeconomic development and the environment. With grants from the Trade Hub, many of our partners are implementing innovative activities that provide nature-based solutions to mitigating climate change in the region. Partners like La Banque Agricole (LBA) are helping to promote climate-smart agriculture in Senegal by providing farmers with access to solar-powered pumping and irrigation systems to improve their productivity and reduce their activities’ impact on the environment. Recently, the Liberian Government provided its approval to allow two of our biodiversity and ecotourism-focused partners to commence work with their plan to build the Libassa Ecolodge and the Nimba Ecolodge & Reserve. These ecolodges will help preserve the reserves and nearly extinct animals in the region while promoting tourism activities and giving rise to increased revenues for the government and the companies.
Improving Agribusiness Competitiveness: Many of the co-investment grants awarded to our private-sector partners are working with small and medium-sized enterprises (SMEs) and smallholder farmers to enhance their competitiveness. These partners are providing access to finance to increase agricultural productivity, efficiency, and the use of technology and to enlarge and better equip the workforce of these SMEs and farmers. In this issue of our newsletter, you will learn how we work with LotfyInc’s Project Sparrow to stimulate angel investments and concessionary loans into a carefully selected portfolio of innovative agribusiness and agri-tech firms that will, directly and indirectly, support between 25,000 farmers and provide 4,000 direct jobs.
Promoting Gender and Social Inclusion: Through our co-investment partnerships, we hope to create 60,000 jobs, with 50 percent of these jobs being filled by women and youth. As of this date, over 32,000 jobs have been created with those gender and age-related targets being met. Gender and social inclusion are key to our work, and we are proudly working with partners like AMAATI, which has successfully onboarded 5,508 women farmers of their target 6,000, to support an increase in the supply of fonio to meet the growing worldwide demand.
Further, there are several women-owned businesses across many sectors in our portfolio, including these from three countries: in Senegal there are three, in the Rice, WASH, and Fruit Processing sectors; in Ghana, there are two in the Apparel sector and one in Food Processing; and in Niger, three-fourths of the co-investment partners are women-owned. The Trade Hub is directly helping to increase access to economic resources for women and youth and to create environments where they can thrive.
Promoting Trade & Export: The Trade Hub provides targeted technical assistance to co-investment partners and other export-ready companies in the region that request support to help them prepare to conduct regional and international trade and exports. This technical assistance has increased trade, exports, and profits. Companies have been supported in everything from filing necessary documents to facilitating meetings with government officials to gain approval to begin operations in a neighboring country. Recently, the Trade Hub has forged the way for the successful collaboration between two co-investment partners, Koster Keunen in Togo and EcoCajou in Côte d’Ivoire, who have joined forces to ultimately increase their exports of sustainable, organic products.
We are continuing in this exciting journey with our co-investment partners through the current 83 grants, achieving results that not only catalyze economic growth in the region but also contribute to innovative solutions that lead to sustainable development.
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Recent Co-Investment Partners
Impacting Food Security in Nigeria
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By Tia Swain
Communications Specialist
Due largely in part to the conflict in Eastern Europe and during a time of post-COVID-19 recovery, food insecurity and economic strain are increasing throughout the globe, with the impact seen and felt in most communities throughout West Africa. Despite these mounting challenges, co-investment partnerships under the USAID-funded West Africa Trade & Investment Hub (Trade Hub) are contributing significantly to economic growth in West Africa, including through creating jobs, boosting incomes for people working in dozens of industries, and increasing exports of agricultural and non-agricultural products sourced from or made in the region, to the United States.
Through its Co-Investment Fund and technical assistance, the Trade Hub is partnering with West African and U.S. private sector firms to generate new investments in the agriculture sector to bolster food security and economic growth and create sustainable jobs.
Made possible through USAID missions throughout West Africa and dedicated funding through the U.S. Government’s Prosper Africa and Feed the Future initiatives, the grants range from $250,000 to $2 million, with the co-investment partnerships currently cutting across fifteen West African countries—Nigeria, Ghana, Senegal, Burkina Faso, Côte d'Ivoire, Togo, Benin, Mali, Liberia, Niger, Cabo Verde, Sierra Leone, Guinea, The Gambia, and Guinea Bissau – and also in Cameroon.
The Trade Hub also supports research and development (R&D) initiatives in Nigeria to introduce new ideas and technological advancements in the agriculture sector. The most recently awarded grants received awards through this R&D Fund. As of September 30, 2022, the Trade Hub has a total of 86 current co-investment partners, has awarded $78 million in grants, and leveraged $146 million, with the total private investment committed being $698 million.
The co-investment grants awarded most recently by the Trade Hub (approximately $2.7 million to four companies) directly impact Nigeria's food security.
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Okele Agro Farm Nig. Ltd
Aquaculture - Technology: 100%
The Trade Hub awarded a co-investment grant of approximately $700,000 to Okele Agro Farms, a Nigerian company specialized in aquaculture. Through this grant, Okele Farms will stem the pandemic’s effect on the aquaculture value chain and increase farm technical capabilities by working with and training 200 fish farmers to increase the production and processing of catfish and meet rising market demand. The company will also reduce fish mortality by maintaining continuous pond water changes through a solar powered system.
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Hybrid Feeds
Aquaculture - Fish Feed: 100%
With a grant of approximately $1.075 million from the Trade Hub, Nigeria-based Hybrid Feeds Limited, a company specialized in the formulation, production, and distribution of various classes of fish and livestock feed services, will increase the sales volume of feed products by using outgrowers to reduce production and input costs. This 24-month partnership will enable Hybrid Feeds to purchase 60 metric tons of maize and soybeans to ensure consistent raw input supplies for the next two years.
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Tecni Seeds Ltd
Production - Maize: 65%, Soy: 35%
Tecni Seeds Limited, an agro-industrial seed production & grain processing company based in Nigeria, was awarded a Trade Hub co-investment grant of $656,037 to strengthen the resilience of farmers in Kaduna and Niger States, bridge the gender gap, and restructure company operations that were disrupted by the COVID-19 pandemic.
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Tiddo Fish Farms Limited
Aquaculture - Fish Culture: 50%, Fish Feed: 50%
The Trade Hub awarded a co-investment grant of approximately $282,986 to Nigeria-based Tiddo Fish Farms, to increase fish and feed production and improve the company's profit, along with that of 200 outgrowers in Benue State. The company will improve its farm infrastructure, including its water capacity and quality.
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Addressing Climate Change Risks
Collecting Plastic, Combatting Climate Change
Since the start of the co-investment partnership, Coliba Africa has trained 1,614 collectors in the target areas to increase their knowledge and skills in recycling. Concurrently, the company has increased the number of collection points where collectors can be paid for their plastic waste, with 22 collection centers (kiosks) set up throughout the city. Further, Coliba has exceeded its initial goal of installing 100 recycling collection boxes where residents can dispose of their plastic waste. There are more than 135 recycling collection boxes in place at gas stations and supermarkets in Abidjan and neighboring towns. Learn more here.
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Addressing Climate Change Risks
Reaching Senegalese Remote Communities with Climate-Friendly Agricultural Technologies
The Trade Hub awarded a $1 million co-investment grant to La Banque Agricole (LBA) to improve agricultural productivity and reduce the environmental footprint of Senegalese smallholders by increasing their access to solar water pumping and irrigation technologies. To effectively implement this project, LBA teamed up with its technical partner, Nadji.Bi, a company specializing in the research, development, and industrial manufacturing of impact solar solutions for domestic and agricultural use. Learn more here.
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Addressing Climate Change Risks
Prioritizing the Planet, People, and Profit: Ethical Apparel Africa’s success in eco-conscious, values-driven manufacturing and exporting
The apparel industry, in its current state, would seem antithetical to the idea of sustainability. And in many ways, it is. The volumes of stock and waste produced, the state of workers’ rights and workplace conditions, and its toll on the environment, cannot be reasonably maintained without compromising the livelihoods of future generations. However, there are players who are reshaping what the industry could look like and are bringing an ethical, environmentally conscious approach to apparel production. One such player is Ethical Apparel Africa (EAA), a Trade Hub co-investment partner in the apparel sector, whose core belief is that ethical, eco-conscious, and cost-competitive production are not mutually exclusive: manufacturing can prioritize people, the planet, and profit. Learn more here.
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Promoting Trade & Export
Extending Efforts to Expand Exports for West African Businesses
With an emphasis on amplifying the African Growth and Opportunity Act (AGOA) trade preference program to increase exports to the United States specifically, a key objective of the Trade Hub is to boost international and regional exports to the United States and to other countries as well. To this end, the Trade Hub provides targeted technical assistance (TA) to co-investment partners and other export-ready companies in the region requesting support. Learn more here.
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Promoting Gender and Social Inclusion
Fonio: An Ancient Grain at the Center of Women’s Economic Inclusion
Through USAID/Ghana, the Trade Hub awarded AMAATI a $742,000 co-investment grant to develop a 1,000-acre nucleus farm in Mion District in the Northern Region and to support 6,000 women farmers in fonio production. Other objectives of the project were to help the company secure $4.5 million in private investments to modernize their factory and generate $4.6 million in exports to the United States and Europe. Learn more here.
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Leading Female Entrepreneur Making an Impact in Water, Sanitation, & Hygiene
In 2022, nearly half of the Senegalese population still deals with poor sanitation conditions and sub-standard sanitation services. Some of the most prominent issues leading to unsanitary conditions in Senegal are the discharge of wastewater from the sewage system into the streets and the lack of public toilets, leading to open defecation, especially in Dakar’s suburbs and the countryside. The commitment of local private actors—like Lena Tall Faye—is crucial for the effective and sustainable management of the sanitation issue.
Read more about Lena's story.
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Koster Keunen boosting the benefits of beekeeping through smallholder training
Waïba is one of over 4,000 beekeepers across Benin, Burkina Faso, Ghana, Mali, Nigeria, and Togo who have been trained as part of Koster Keunen West Africa’s (Koster Keunen) partnership with the Trade Hub. Through this program, Koster Keunen is organizing smallholder beekeepers and providing training and equipment to help them improve the quality of their honey and beeswax. With these enhanced techniques, beekeepers like Waïba are able to scale their sales.
Learn more about Waiba's progress as a Beekeeper.
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Access Leads to Success for Senegalese Female Rice Farmers
Since 1981, Arame has been growing rice and garden vegetables in Ross Bethio, a community 51 kilometers from Saint-Louis. Today, she is the owner of four hectares of paddy field. Arame is the president of an Economic Interest Group that brings together close to 20 women who produce paddy rice. She is also very active in her community as an advisor to the women in her neighborhood and works as a matron in a health post in her community.
Read more about Arame's story
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Partner's Spotlight
Lotfyinc Allied Partners Limited
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By Aor Ikyaabo
Communications Specialist
In 2021, LoftyInc Allied Partners Limited received a grant of $1.43 million from the Trade Hub to fund “Project Sparrow,” which will run until 2023. The goal of the project is to improve the productivity and livelihoods of Nigerian smallholder farmers in seven Nigerian states: Benue, Cross River, Delta, Ebonyi, Kaduna, Kebbi, and Niger States and five value chains: Cowpea, Maize, Rice, Soy, and Aquaculture. These improvements will reduce the risks for local and global investments in selected agribusinesses and allow agri-tech companies to achieve higher productivity, better returns, inclusive growth, and access to finance for small to medium-sized enterprises (SMEs) that have been supported through LoftyInc’s accelerator program.
The project is expected to support approximately 25,000 farmers and provide 4,000 direct jobs to increase yields by 50 percent over three years while reducing post-harvest losses by 35 percent as farmers adopt the use of alternative energy sources for drying, processing, and storage.
In this Q&A, Ajibola AbdulAzeez, the Project Manager for Project Sparrow, explains how Project Sparrow is leveraging the partnership with the Trade Hub to enhance the competitiveness of SMEs in Nigeria through investments in startups, including agri-tech companies.
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Q: The agricultural sector in Nigeria faces many challenges, including a very low level of irrigation development, limited adoption of technologies, poor access to credit, and inadequate storage facilities. How is Project Sparrow working towards mitigating these lingering challenges?
A: Project Sparrow is premised on a unique approach that seeks to solve the identified problems by to attracting incremental agribusiness financing to disruptive entities that have already made businesses out of helping smallholder farmers solve these challenges. Using a novel “First Loss Guarantee” approach for equity investments, Project Sparrow is designed to de-risk these agriculture-focused businesses and make them more investment-attractive. Ultimately, Project Sparrow is able to convince investors to provide financing to these carefully selected cohorts of SMEs to drive the scalability of their innovative solutions, which are then to be provided to an increasing number of smallholder farmers. At the end of the project in 2023, the project would have mitigated the challenges for the beneficiaries using inclusive business models that put women and youth at the forefront.
Q: Mechanized agriculture is pertinent for sustainable food production, as well as preservation (storage) and access to open markets. How has your work impacted this area?
A: First, these problems were carefully detailed and relevant stakeholders consulted. The solutions proffered were subsequently considered in the selection of the participating SMEs, with Project Sparrow ensuring there was a match between the solutions prescribed and those being offered by the SMEs. Further tests were done on the feasibility and scalability of those solutions to ensure that the SMEs were interesting to the potential investors and would be able to attract investment. Consequently, we have seen the uptake of the storage technology of one of the startups (Cropsafe) by more than 700 smallholder farmers in Niger State. There has also been increased interest in the services of an SME offering mechanization services by both tractor owners and those who need the machines, as their business model involves a careful matching of excess mechanization capacity to areas of deficit.
Q: Part of your mandate is to provide and increase financing to innovative start-up agri-business companies, especially those that are youth- or women-led. How have you and your organization been able to go about this?
A: The entry requirements for participation in Project Sparrow were carefully designed to ensure that women and youth-led organizations were prioritized whilst being careful not to exclude truly innovative SMEs on account of the age or gender of the promoters. The balance of the selection approach is evidenced by the presence of 50 percent youth and/or women-led SMEs in the cohort.
Q: On July 19, 2022, you showcased twenty-four startup companies to investors on Project Sparrow’s Demo Day. Could you share with us some of the results achieved through the Demo Day?
A: Over 50 SMEs signed on for the project through an Investment Readiness Program. On the “Demo Day,” the 24 SMEs that completed the program successfully were showcased to a select club of investors who had shown interest in the project. From the event, we were able to solidify the interest of some of those investors, including the Agric Deal Room of the Alliance for a Green Revolution in Africa (AGRA), Founder’s Factory, Afrilabs, the Afropreneurs Angel Group, and the Future Africa Group, among others.
Currently, an investment platform has been created with the final processes of a Sparrow Fund being established for the investors to pool in their investments. The project has also been able to secure debt financing for six SMEs from First City Monument Bank (FCMB), with Sterling Bank also working to leverage the Credit Risk Guarantee (CRG) subsidiary of the Development Bank of Nigeria to leverage even more finance to the SMEs.
Q: Please share with us some of the major milestones of the project so far.
A: Apart from the initial program framework development, the design, selection of participating SMEs, and implementation of the investment readiness program, a baseline assessment survey of the SMEs, followed by the development of investment metrics, have been concluded. Furthermore, Project Sparrow has also been able to secure the commitment of funding of up to $2 million from a club of investors, and the mobilization of debt financing to some of the carefully selected SMEs from the cohort by First City Monument Bank.
Q: Finally, what are the plans for LoftyInc Allied Partners Limited in the near future?
A: In commitment to our corporate vision, LoftyInc’s plan remains to ensure the lowest possible rate of unemployment in the country by supporting, creating, and protecting one million jobs per annum over the next decade. We plan to advance the brightest of [the] Project Sparrow SMEs into our Venture Capital Fund to further improve their chances of creating jobs and ensuring positive social impact.
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Strategic Sourcing of Sustainable Honey & Beeswax
Collaboration between co-investment partners Koster Keunen & EcoCajou
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By Tia Swain
Communication Specialist
Togo-based Koster Keunen West Africa (Koster Keunen) was awarded a $1,785,470 co-investment grant, made possible by Prosper Africa, to establish a sustainable regional supply chain for the export of beeswax, honey, shea, and cashew to the United States and other international markets.
As part of its Trade Hub project, Koster Keunen planned to expand its sustainable sourcing of beeswax and honey into Côte d’Ivoire, seeking to capitalize on the immense trade potential. However, the company faced difficulties in identifying a suitable local partner that met all its criteria for sustainable, organic production.
The Trade Hub team took up the issue and offered technical assistance to facilitate a connection between Koster Keunen and a viable partner, EcoCajou. Funded through USAID/Côte d’Ivoire, EcoCajou is another Trade Hub grantee that received an $800,000 co-investment grant to strengthen its supply chain by installing a new cashew processing facility and providing capacity building to cashew producers on beekeeping best practices in the north of Côte d'Ivoire. Besides forging the connection between the two grantees, the Trade Hub followed up to ensure that both grantees met one another’s requirements and corresponded promptly.
Koster Keunen and EcoCajou have signed a partnership agreement that allows them to pilot a project supporting 40 cashew producers, with the first harvest expected in March 2023. Koster Keunen, as the technical partner, will provide support and guidance for beekeeping training and bee house set-up. At the same time, EcoCajou will connect producers to training and offer on-the-ground support and verification of standards/procedures.
Though the purpose of conducting the pilot is to enable the partners to better estimate the future impact of their collaboration, rough estimates expected from the pilot would put production somewhere between 400 to 1,000 kilograms of honey and 5 kilograms of beeswax per farmer per year. This would mean Koster Keunen could potentially buy 4 metric tons of honey and 200 kilograms of beeswax from EcoCajou supported farmers. If the pilot goes well, the partners intend to add another 160 producers to the program.
The outlook for the strategic alliance is promising for all involved parties. It is expected that through the partnership, cashew farmers will be supported in achieving a 30 percent increase in yield due to the integration of beekeeping activity in existing cashew orchards and the improved pollination of crops. A $500 per year increase in revenue per farmer is expected. EcoCajou will set up a honey house, a long-term business goal for the company, and Koster Keunen will successfully expand its sustainable sourcing of beeswax and honey into Côte d’Ivoire.
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Disclaimer: The contents of this newsletter are the sole responsibility of Creative Associates International and do not necessarily reflect the views of USAID, the United States Government, or Prosper Africa.
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