Nigeria’s agric sector to benefit from $120m loan

International Finance Corporation (IFC), a member of the World Bank Group, and Olam International, a global integrated supply chain manager and processor of agricultural products, have sealed a $120 million (N18.7bn) agricultural loan agreement.

The five-year loan is meant to expand food processing and create opportunities for small-scale farmers in Nigeria and India.

The loan will also be used for the upgrading and expansion of five food processing facilities in Nigeria and India.

Ade Adefeko, Olam Nigeria’s head, corporate and government relations in a statement, said “the projects will benefit local communities by generating rural employment and creating new market opportunities for smallholder farmers to sell their crops,” saying the IFC financing will support many facilities operated by Olam.

Those to benefit in Nigeria are, Crown Flour Mill, Lagos, which will be expanded, while a new mechanical cashew processing facility will be set up at the cashew factory in Ilorin, Kwara State, while a new sesame hulling facility will be set up in Lagos.

In India, both the Hemarus Sugar Mill at Kolhapur and the spice processing facility at Cochin will be upgraded.

According to the statement, the Crown Flour Mill in Nigeria will process imported wheat into flour for domestic bakers.

The remaining four facilities will be integrated by 2015, more than 45,000 small-scale farmers from surrounding regions into Olam’s supply chains. This will be made possible by allowing them to supply their crops directly to the processing units, thereby guaranteeing a market for their products, the statement disclosed.

“Our partnership with IFC reiterates Olam’s continued focus of enabling economic prosperity and social and environmental sustainability throughout Olam’s operations,” said A. Shekhar, Olam’s executive director for finance and business development.

“IFC’s rigourous environmental and social review has been focused on the five processing facilities to ensure they meet IFC’s stringent loan criteria.

“However, IFC has also reviewed a range of Olam’s policies, procedures and management initiatives that apply throughout our supply chain and we will continue to build on these best practices in line with The Olam Sustainability Standard,” Shekhar added.

Atul Mehta, IFC director for global manufacturing, agribusiness and services, said: “Olam is a critical link between small farmers, businesses and global markets.

“It is a supply chain manager and partner for leading multinational corporations and recognised brands – all of whom are looking to improve traceability of their sourcing and address sustainability issues in their supply chains.”

IFC’s agribusiness strategy aims to promote food security, inclusive growth, and environmental and social sustainability in agricultural supply chains.

IFC works with supply chain integrators to provide small farmers and rural businesses with access to finance, access to inputs like equipment and seeds, advice and extension services, and access to markets.

In fiscal year 2013, IFC invested $4.5 billion globally in different countries. Olam is a leading global supplier for multiple agricultural commodities like cocoa, sesame, and cashew nuts, which are primarily produced by smallholder farmers.

The company sources from over 3.5 million farmers and is a major investor in agribusiness in Africa and Asia, including some of the poorest countries in those regions.

By: REMI FEYISIPO