Co-investments in three Nigerien agribusinesses support market expansion and job growth for women and youth farmers. When Nafissa Hamidou Abdoulaye established Enterprise Salma in 2014, she had a dream of not just breaking ground for Nigerien women in agribusiness, but of contributing to the economic and social development of her country by creating jobs for women and youth.
For six years, Nafissa’s company persevered, employing scores of women and small-scale farmers whose local produce became the raw materials in Enterprise Salma’s feed for large and small ruminants. The Niamey-based company sold its 25kg bags of feed across Niger and was eyeing market expansion.
But then the Covid-19 pandemic hit, and Nafissa’s company, like many small and medium enterprises in Niger, took a significant economic hit. In 2020, Enterprise Salma’s sales decreased from $409,000 to $10,000. Production drastically dropped from about 1,300 tons of feed in 2019 to fewer than a dozen tons in 2020. Operations were almost at a standstill.
Nafissa needed investment money to keep her existing staff and restart Enterprise Salma’s operations. She had limited options, however. Banks in Niger are reluctant to finance the country’s agriculture sector, despite its importance in the national economy, because of unpredictable challenges, including weather, droughts and other unforeseen challenges. Nigerien women seeking outside financing face additional challenges because of gender discrimination.
The U.S. Agency for International Development’s West Africa Trade & Investment Hub (Trade Hub) saw the potential for Enterprise Salma to flourish where other Nigerien banks saw risk. In November 2021, the Trade Hub invested $439,355 in Enterprise Salma in a co-investment partnership.
The money will help Enterprise Salma increase its annual production of animal feed from the current 1,300 tons a year to 4,000 tons a year by 2024. That will result in an increase in the incomes of some 100 small producers of the feed’s raw materials, including 50 new producers led by women and youth.
With a USAID initial investment, Nafissa now had the leverage to approach commercial banks in Niger to apply for additional financing that will help Enterprise Salma modernize its feed production and advance the commercialization of enriched and compounded animal feed. The improvements will allow Nafissa and her workers to make up for the losses incurred during the Covid-19 pandemic.
“Certainly, this production has not yet reached the peak of 2019, but it is approaching it. This was unimaginable in the middle of the 2020 crisis before the Trade Hub’s support,” Nafissa says.
USAID’s Trade Hub manages a pipeline of more than $1.2 billion in transactions and has engaged with more than 700 private companies, as well as business associations, development finance institutions and government agencies.
In West Africa, the Trade Hub has awarded 75 grants worth $70 million during its first two and a half years. These co-investments are expected to generate $560 million in private investment, 59,000 sustainable jobs and facilitate more than $456 million in exports in agriculture, manufactured goods, energy and services by the end of the program. The private investment generated is so significant that it represents eight-times the value of the Trade Hub funds.
“With Trade Hub investment, Trade Hub grant, we provided a level of comfort to Niger banks Enterprise Salma approaches,” says Régis Ouattara, a Public-Private Partnerships Manager at the Trade Hub. “Banks see that USAID is involved and understand that USAID is a credible organization, so they are more comfortable with getting involved.”
Because Nigerien agriculture businesses face such hurdles in getting financing, the Trade hub in late 2021 identified three enterprises in the country to assist via co-investment partnerships, including Enterprise Salama.
La Ferme Semenciere Ainoma, a family-owned seed company started in 2006 and is now one of Niger’s largest seed producers, employing mostly women. Through its Operation School Garden project, the company is a leader in regional efforts to promote farming as a viable livelihood choice, particularly for rural women in Niger.
Like Enterprise Selma, La Ferme Semenciere Ainoma’s farmers were severely impacted by the economic downturn caused by the pandemic. The Trade Hub co-invested in the firm with $461,527 to assist in the expansion of large-scale commercial vegetable production with irrigation systems for 400 rural female farmers. The USAID-backed initial investment is expected to generate additional income for the firm through the sale of vegetables during the two-year project.
The Trade Hub’s $463,158 investment will help Confédération Coopérative Paysanne Horticole du Niger, or CCPHN, expand its potato production, increase storage capacity and invest in cold-chain solutions. The initial investment was made at the end of November 2021, and already CCPHN has purchased and distributed potato seeds and fertilizer to 532 potato producers in three regions of Niger, as well as provided technical assistance to potato growers and recruited 70 new employees.
For each of the three co-investments in Niger, the Trade Hub’s initial investments are supporting agribusinesses in a country where securing financial backing has been seen as out of reach.
Even when a financer is willing to invest, “the terms and conditions and guarantees required for financing are inaccessible for young businesses,” says Nafissa of Enterprise Salma.
“The matching of a grant from the Trade Hub to the loan amount requested was undoubtedly the catalytic factor that allowed the bank loan to be approved and the project to begin,” she says.