The project will mobilize at least $14 million in new private investment for the region
March 25, 2021
West Africa’s agribusiness sector will soon benefit from millions of dollars in private investment through a co-investment partnership between the USAID-funded West Africa Trade & Investment Hub and CrossBoundary, an investment and economic development advisory services firm specializing in underserved markers.
As part of the agreement, CrossBoundary will leverage Trade Hub’s $1.5 million grant to channel at least $14 million in private investment to a portfolio of agribusinesses that include smaller firms typically ineligible to receive direct funding from the Trade Hub. The grant was awarded through the Trade Hub’s initiative to work with financial institutions and advisory firms to increase access to finance for small and medium enterprises (SMEs). This special program was launched to assist entities engaged in building operational and cash flow resilience among SMEs affected by the pandemic.
The financing will primarily be used to help high-potential SMEs in Nigeria, Ghana, Mali, and Burkina Faso raise capital and close financial deals. Fifty percent of the transactions will be earmarked for Nigeria, whereas part of the U.S. government’s Feed the Future initiative, the Trade Hub is working to introduce new technology in agriculture.
“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,” says Michael Clements, the Trade Hub’s Chief of Party. “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.”
The portfolio approach taken by CrossBoundary to assist SMEs is an innovative solution to an ongoing problem. Despite their need for easier access to capital, agribusiness SMEs are typically underserved by existing financing products and face prohibitive transaction costs. As SMEs in the agricultural sector function as a backbone to West African countries’ economies, increasing their competitiveness is crucial. Through the efforts of the CrossBoundary–Trade Hub partnership alone, 500 jobs are expected to be created. Ultimately, approximately 6,000 people will benefit, including through increased food production by the agribusiness SMEs supported.
“We are excited to participate in this partnership where our role as an intermediary will help unlock private capital by systematically overcoming the barriers to investing in the region,” says Jake Cusack, Managing Partner at CrossBoundary. “Having implemented a similar model in other African regions, we expect to expand the Trade Hub’s resources beyond the projected targets, and in the process directly impact livelihoods, create opportunities, and drive economic growth.”
About West Africa Trade & Investment Hub: The West Africa Trade & Investment Hub (Trade Hub) is a USAID-funded initiative that catalyzes economic growth through co-investing with the private sector to generate new investment, create new jobs, and increase the value of regional and international exports in West Africa.
About USAID: The United States Agency for International Development (USAID) is the lead U.S.
Government agency that works to end extreme global poverty and enable resilient, democratic societies to realize their potential.
About Feed the Future: The Feed the Future initiative is the U.S. Government’s global hunger and food security initiative. It works to give families and communities in some of the world’s poorest countries the freedom and opportunity to lift themselves out of food insecurity and malnutrition.
About CrossBoundary: CrossBoundary provides investment and economic development advisory services in frontier markets and conflict zones. CrossBoundary also offers strategic consulting for financial analysis and intelligence platforms, particularly focusing on innovative methods of assessing investment and credit risk in emerging markets.