In a strategic effort to enhance Africa’s agricultural sector, the International Finance Corporation (IFC) and South Africa’s Absa Group have teamed up to provide a $50 million trade finance facility to Singapore-based Valency International. This initiative is designed to fund the procurement of key agricultural commodities such as cashew nuts, sesame seeds, and ginger from smallholder farmers across West and East Africa.
Valency International: A Global Agricultural Force
Founded in 2007, Valency International is a Singapore-headquartered food ingredient supplier with a diverse portfolio spanning 21 product categories. The company enjoys strategic equity investment from British International Investments (BII), the UK Government’s development finance arm.
Valency’s global footprint is impressive, with operations in 40 countries and a team of over 3,000 employees. The company operates across several sectors, including agricultural commodities, processed agricultural products, agri-inputs, industrial chemicals, and FMCG food products.
Strengthening Africa’s Agricultural Value Chain
Valency works with 150,000 smallholder farmers in countries like Nigeria, Ghana, and Tanzania, and will use this trade facility to purchase and export agricultural goods. This financial support will significantly strengthen the agricultural value chain, helping farmers improve their market access and financial stability. Smallholder farmers, who manage approximately 80% of Africa’s farmland, often struggle with limited access to capital, which hinders their capacity to grow.
This trade finance facility aims to address this barrier by injecting much-needed working capital into the sector. By doing so, the initiative will empower farmers, creating a positive impact on the broader agricultural ecosystem.
A $50M Commitment to Africa’s Agricultural Growth
Absa and IFC have each committed $25 million to the project as part of IFC’s $1 billion Africa Trade and Supply Chain Recovery Initiative. This program seeks to foster agricultural growth and sustainable development across the continent. Additionally, Valency will provide financing to cooperatives and local buying agents, further benefiting smallholder farmers.
Driving Economic Growth and Job Creation
For IFC, a leading agribusiness investor in Africa, this partnership aligns with its goal to drive economic growth and job creation through agriculture. Sérgio Pimenta, IFC’s Vice President for Africa, highlighted the sector’s potential: “We see a tremendous opportunity to support economic growth and job creation in this critical industry.”
Absa’s Tshimbi Ntuli echoed this sentiment, emphasizing the critical role that partnerships play in transforming Africa’s agricultural landscape. Both organizations see the collaboration as a catalyst for long-term development in the region.
Empowering Farmers and Unlocking Africa’s Potential
Sumit Jain, CEO of Valency, expressed enthusiasm for the partnership, emphasizing the company’s dedication to integrating African farmers into global markets. He believes that this trade facility will not only empower smallholder farmers but will also spark economic growth and improved livelihoods across the region.
By providing direct financial support, this initiative unlocks the full potential of Africa’s agricultural sector, bringing thousands of farmers closer to global markets and fostering a brighter future for the continent’s rural communities.