Afreximbank approves USD 20M for Nigerian cashew processing plant

NIGERIA – The African Export-Import Bank (Afreximbank) has approved a USD 20.8 million financing facility for Starlink Global & Ideal Limited, a Nigerian company involved in agricultural commodity trading.

Afreximbank’s financial backing aims to improve Nigeria’s underdeveloped cashew processing segment, which processes only about a third of its annual production capacity.

This investment seeks to close that gap by funding the construction of a new plant with a capacity of 30,000 tonnes.

The bank’s press release, published on October 3, outlined the distribution of the funds. “A total of USD 7.8 million will go towards capital expenditures for the construction of the plant, while the remaining amount will be allocated as working capital for the unit,” the statement said.

This move is expected to significantly boost Starlink Global & Ideal Limited’s operations, allowing the company to add value to Nigeria’s cashew production.

The facility will create approximately 400 jobs once the plant becomes operational and support about 40 small and medium-sized enterprises (SMEs).

Despite being a major cashew producer, Nigeria has long struggled to realize the full potential of its cashew processing industry.

According to the Nigerian Export Promotion Council (NEPC), the country currently processes between 25,000 and 35,000 tonnes of cashew nuts annually, a small fraction of its total production.

This new investment is seen as a step toward addressing this challenge. The NEPC has been vocal about the need to strengthen Nigeria’s cashew processing sector, emphasizing the importance of reducing raw nut exports and increasing local processing to create more value within the country.

The cashew sector’s importance is evident from its production figures. In 2022, Nigeria produced over 120,000 tonnes of cashew nuts, according to AFEX Commodities Exchange, the country’s leading private commodity exchange. However, only a third of this volume was processed domestically.

Cashew farming has long been a cornerstone of Nigeria’s agricultural economy, particularly in the central and southern regions.

The new plant, once operational, is expected to make a significant contribution to the local economy by creating jobs and supporting SMEs involved in the supply chain.

“This investment will help increase the revenues of Starlink Global & Ideal Limited while providing much-needed jobs and strengthening the cashew processing segment in Nigeria,” Afreximbank stated in its release.

With ongoing efforts to boost production capacity and expand the processing segment, Nigeria’s cashew industry is poised for growth.

The investment from Afreximbank is a strong step in the right direction, promising to address key challenges such as low processing rates and the need for more value-added products.

While cashew production remains a vital part of Nigeria’s agricultural landscape, investments like this are essential to unlocking its full potential.

By enhancing local processing, the country stands to increase its export value and improve the livelihoods of the many smallholder farmers and workers involved in the sector.