In a significant move to drive growth and sustainability in Uganda’s coffee industry, Sahel Capital has approved a $1 million loan to Sukuma Commodities through its Social Enterprise Fund for Agriculture in Africa (SEFAA). This term and working capital loan is part of Sahel’s ongoing commitment to uplifting the food and agriculture sectors in sub-Saharan Africa. The funding aims to empower Sukuma’s network of smallholder farmers by enhancing the company’s processing and export capabilities.
Empowering Smallholder Farmers through SEFAA’s Vision
Launched in 2021, SEFAA, which is anchored by the German development bank KfW, focuses on stimulating economic activity and supporting sustainable livelihoods among smallholder farmers by financing social enterprises. This recent investment aligns seamlessly with SEFAA’s objectives, as Sukuma Commodities plays a vital role in Uganda’s coffee sector by sourcing high-quality Robusta and Arabica beans from over 2,300 farmers.
The company not only exports 100% of its coffee to European markets but also supports farmers through input financing, technical training, and sustainable agricultural practices. By strengthening Sukuma’s capacity, the loan aims to bolster Uganda’s agricultural landscape, ensuring long-term benefits for farmers and their communities.
Uganda: A Strategic Market for Coffee Investment
Uganda, recognized as Africa’s largest coffee exporter and second-largest coffee producer, presents an attractive opportunity for agricultural investments. With Sukuma Commodities as a significant player in the industry, Sahel Capital views this investment as a way to make a meaningful impact on the livelihoods of thousands of farmers.
“Uganda offers tremendous potential for impactful investments,” said Deji Adebusoye, a partner at Sahel Capital. “By supporting Sukuma, we are helping to improve the livelihoods of thousands of farmers. Through this investment, we expect the company to double its coffee sourcing capacity, which will enhance market access and income potential for farmers.”
Scaling Operations and Enhancing Farmer Livelihoods
The infusion of capital will allow Sukuma to significantly scale its operations. The company plans to increase its coffee aggregation and processing capacity, ensuring a stable and reliable market for local farmers who rely on coffee as their primary source of income. Additionally, the loan will streamline payment cycles, enabling farmers to receive payments more quickly, thereby improving their economic stability.
Fedrick Gubala, CEO of Sukuma Commodities, shared his optimism about the positive impact this partnership will have on farmers:
“Partnering with SEFAA allows us to improve our engagement with farmers by shortening payment cycles, which is critical for boosting their household income and economic well-being. This partnership is about much more than financial support; it’s a commitment to strengthening our entire community.”
The collaboration also includes SEFAA’s technical assistance, which will help Sukuma enhance its sustainability programs, improve production practices, and elevate coffee quality.
Sahel Capital’s Broader Strategy for African Agribusiness
This investment in Sukuma Commodities is not an isolated effort but part of Sahel Capital’s broader strategy to support agribusinesses across Africa. The firm manages two major funds:
Looking to expand its influence, Sahel Capital is also preparing to launch a new fund—Sahel Capital Agribusiness Fund II—aimed at increasing its impact in West Africa.
Marking a Milestone in East Africa
This investment marks Sahel Capital’s first venture into Uganda, signaling its expanding footprint in East Africa’s agricultural landscape. By supporting Sukuma Commodities, Sahel Capital not only aims to drive growth in Uganda’s coffee sector but also to advance its mission of enhancing agricultural value chains across the continent.
The partnership is a testament to the power of collaborative efforts to transform the agricultural sector, improve farmer livelihoods, and foster sustainable economic growth in Africa.
