A US$4.5m financing package from the IFC, supported by the private sector window of the Global Agriculture and Food Security Program (GAFSP), will support Bar Magen in expanding production of livestock feed additives such as vitamin and minerals premixes in Nigeria.
The funds will also go towards the building of the country's first salt and mineral block licks production facility, with the goal of improving smallholder farmer access to such key nutrients for ruminants. In addition, the project will support the company in terms of boosting its warehouse capacity to store feed raw materials, helping to prevent supply shortages and reducing reliance on imports.
Agriculture is an important sector of the Nigeria economy, contributing about 21.2% to GDP and 36.5% to employment, according to 2019 data from the UN’s FAO. Livestock is a priority sector for the country due to its contribution to inclusive economic growth and food security.
With nearly 70% of the operational costs of most poultry and other livestock operations going to feed, managing feed quality and cost is critical for Nigeria's sustainable livestock production, said the partners.
"Agribusiness remains a significant contributor to the Nigerian economy. IFC's support is essential to help us respond to challenges resulting from the rising costs of importation and supply chain bottlenecks of livestock feed. This partnership will help increase local manufacturing and distribution of feed additives, and develop the animal feed processing operations in Nigeria," said Rami Bergman, founder and president of Bar Magen.
Economic inclusion, sustainable ag goals
The IFC said its tie-up with Bar Magen reiterates its broader work to support sustainable agriculture practices, develop regional value chains and markets, as well as expand job opportunities and economic inclusion in Nigeria.
"In addition to supporting the country's agriculture sector, the project will contribute to further developing Nigeria's manufacturing base for animal feed processing," said Kalim M. Shah, IFC's senior country manager for Nigeria.
The IFC outlined how, in fiscal year 2021, it committed US$31.5bn to private companies and financial institutions in developing countries, with the objective of leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic.
The Global Agriculture and Food Security Program (GAFSP) is a global effort that pools donor resources to fund programs focused on increasing agricultural productivity as a way to reduce poverty and increase food and nutrition security. The Private Sector Window, administered by the IFC and supported by the governments of Australia, Canada, Japan, the Netherlands, the UK, and the US, provides long- and short-term loans, credit guarantees, capital and technical assistance to private sector companies and financial intermediaries. It links smallholder farmers to markets by improving their access to finance, technology, expertise, and inputs.