Tosin Ojo
Branded foods and sustainable packaging. These are just two of the areas in West Africa’s agribusiness sector where investment firm Sahel Capital sees attractive opportunities. How we made it in Africa spoke to Tosin Ojo, a partner at Sahel, who shared her insights from successfully investing in the region’s agribusiness industry.
Topics discussed during the interview include:
- Sahel Capital’s new West African agribusiness investment fund
- Lessons learnt from investing in the agribusiness industry
- Notable previous investments
- Areas of opportunity in West Africa’s agribusiness sector
- Sub-sectors the fund will avoid
Watch the full interview below:
Interview summary
Lagos-based investment firm Sahel Capital has launched its second private equity vehicle, the Sahel Capital Agribusiness Fund II (SCAF II). The fund has already secured $29 million towards its $75 million target and has executed its first investment.
SCAF II will target West African agribusiness companies, focusing primarily on Nigeria, Ghana, Côte d’Ivoire, and Senegal. The fund will make investments ranging from $3 million to $15 million in these entities. According to Tosin Ojo, a partner at Sahel Capital, Nigeria has a more developed agribusiness sector than the other three countries, as well as larger companies operating in the space.
Standout previous investments
SCAF II is the successor to Sahel’s Fund for Agricultural Finance in Nigeria (FAFIN), launched in 2014.
Ojo highlighted L&Z Integrated Farms, a dairy and yoghurt producer based in the northern Nigerian state of Kano, as a standout investment from that fund. When Sahel acquired a 25% stake in 2015, L&Z’s footprint was limited to Kano and a few neighbouring states. Backed by Sahel’s capital, the company significantly scaled its production capacity and expanded its supermarket distribution nationwide. By the time Sahel exited in 2022 – selling its stake back to the founder – L&Z’s revenues had grown more than tenfold.
Another notable investment from the first fund was Coscharis Farms, a rice processing business in the southeastern Nigerian state of Anambra. The investment was predicated on Nigeria’s high rice consumption as a domestic staple and the potential for import substitution. Despite being a major grower, Nigeria faced a significant shortfall between supply and demand, relying heavily on imports.
Coscharis Group, a major Nigerian conglomerate, launched the rice farm as one of its first forays into agriculture. The group brought Sahel Capital on board as a strategic partner at the inception stage to help start up and stabilise the business.
At the time of Sahel’s initial investment, Coscharis Farms had only a few hundred hectares under cultivation and lacked a processing plant. Sahel’s capital financed the construction of a processing facility and expanded the land under cultivation. In addition to its own rice production, the company also buys rice from thousands of small-scale farmers. According to Ojo, both revenue and profits grew significantly during the time Sahel was invested in the company. FAFIN exited the business in 2023, selling its stake back to the parent group.
Areas of opportunity
Within the broader agribusiness and food sector, Ojo is particularly optimistic about branded packaged foods. She notes that Sahel is seeking businesses capable of distributing their brands across multiple West African countries. The firm also favours food companies that are integrated into the local value chain, such as those sourcing raw materials directly from smallholder farmers.
Reflecting this strategy, SCAF II’s first investment was in Delifrost Caterers, a Nigerian manufacturer and distributor of food products ranging from cheese and sausages to frozen vegetables.
Ojo also identified food packaging – particularly sustainable packaging – as a target area for the fund.
However, SCAF will not invest in pure primary agriculture. Ojo noted that primary farming does not align with the typical private equity model, which requires firms to exit their investments after a set number of years. The fund will, however, consider farming businesses that incorporate their own processing operations.
