Nigeria’s agricultural sector holds immense potential, but without accessible and well-structured funding, that potential, particularly in agro-processing, risks being underutilised. Agro-processing is important to transforming Nigeria’s food system, as it adds value to raw produce, strengthens supply chains, enhances food security, creates employment opportunities, and drives export growth. 

Yet, many entrepreneurs face serious challenges when it comes to securing the financial resources needed to start or scale their operations. Funding is more than a business requirement; it is a strategic foundation for long-term development and economic stability. Even the most promising agro-processing ventures may never take off without targeted investment.

Funding can affect the progress and potential of Nigeria’s agro-processors. Hence, this article outlines some actionable ways to access finance, from government-backed grants to investor-led capital.

Agro-processing Funding in Nigeria

Agro-processing is an important component of both the agricultural and manufacturing sectors. It involves transforming raw materials and intermediate products from farming, forestry, and fisheries into finished or value-added goods. This value addition is crucial for enhancing product quality, extending shelf life, and improving marketability.

However, agro-processing requires significant funding for machinery, factory setup, logistics, packaging, certifications, and market access. Without adequate financial support, many entrepreneurs cannot fully develop their processing operations.

Limited access to funding has led to several challenges in Nigeria’s agriculture sector, including high post-harvest losses, low product quality, and reduced global competitiveness. These issues hinder value retention and significantly impact potential earnings.

Although agriculture contributes around 25% to Nigeria’s GDP, a significant portion comes from primary production with minimal processing, highlighting a significantly low investment in agro-processing.

Wole Adeniyi, Chief Executive of Stanbic IBTC Bank, highlights that fundamental agricultural transformation goes beyond cultivation; it lies in value addition. According to him, agro-processing is key to wealth generation, export competitiveness, job creation, and reduced waste. 

However, the Nigeria Economic Summit Group (NESG) reported a staggering $182 billion financing shortfall in its 2024 First Half Outlook. Urgent attention is needed to bridge this gap and position Nigeria as a major agro-industrial powerhouse. This situation presents both opportunities and a pressing requirement for innovative financing solutions that can effectively close the funding deficit.

Several funding options are available to support this initiative :

• Grants: Non-repayable funds from governments or international development agencies
• Loans: Borrowed capital from banks and financial institutions, often with interest
• Equity Investments: Private capital in exchange for ownership stakes
• Microfinance & Cooperative Loans: Community-level, accessible financing models

Funding Sources for Agroprocessing in Nigeria

Accessing funding is crucial for agro-processing businesses in Nigeria, whether they are startups or seeking expansion. Below are funding sources, including grants and loans, available to agro-processors as of 2025.

1. Government Grants and Schemes

The Nigerian government offers several funding schemes to support agro-processing, such as:

• Anchor Borrowers’ Programme (ABP): The Anchor Borrowers’ Programme (ABP) was launched by the Central Bank of Nigeria (CBN). The ABP aims to strengthen economic ties between smallholder farmers and processors, thereby boosting agricultural output and stabilising food prices. Its key objectives are to increase bank financing for agriculture, reduce food imports through local value addition, support a new generation of smart farmers via innovative funding, and promote financial inclusion by transitioning smallholder farmers from subsistence to commercial farming. Repayment is typically made after harvest, often through the sale of produce to the processing company.
• National Agricultural Development Fund (NADF): The National Agricultural Development Fund (NADF), established by the Federal Government through the 2022 Act, aims to overcome agricultural financing challenges and strengthen Nigeria’s food systems. The initiative focuses on empowering farmers by offering accessible financial products and loan guarantees, promoting innovation through modern agricultural technologies, and maintaining the ecosystem with investments in research, capacity building, and market intelligence to drive a more efficient and resilient agricultural sector. NADF offers financing on favourable terms through financial institutions, including microfinance banks, cooperatives, and farmer groups, targeting individual farmers and agribusinesses. Interested applicants are encouraged to check the Fund’s website and social media for updates on available programmes and application procedures.

2. Development Bank and International Funding: A key example of this is the African Development Fund (ADF), through the African Development Bank (AfDB), which plays a role in supporting agro-processing across Africa, particularly within special agro-industrial processing zones. These zones are designed to promote value chains for staple crops, such as rice and cassava, as well as horticultural products, aligning with the goals of “Feed Africa” and “Industrialise Africa.” The Bank also supports regional integration through the African Continental Free Trade Area (AfCFTA), enabling agro-industrial firms to scale operations and compete globally. This strategic focus on agro-processing contributes to inclusive economic growth, youth employment, and industrial transformation across the continent. The AfDB released a $2.2 billion fund for Special Agro-Industrial Processing Zones (SAPZs) across Nigeria, supporting the development of processing hubs, aggregation centres, and transformation programs
3. Commercial Loans

• Commercial Agriculture Credit Scheme (CACS): The CACS is managed by the Central Bank of Nigeria. This scheme offers single-digit interest loans (up to 9%) for agro-processing and related activities, with a maximum tenor of five years.
• Bank of Industry (BOI): The BOI offers loans (Cottage Agro-Processors Fund) at 9% interest, with a five-year tenor and a six-month moratorium. The fund targets limited liability companies, cooperatives, and enterprises involved in agro-processing.

4. Bank and Microfinance Loans

• Commercial Banks: Banks such as First Bank, Stanbic IBTC, and others offer tailored loan products for agro-processing, including machinery financing and working capital.
• Microfinance Banks and Cooperatives: These institutions provide smaller, more accessible loans to startups and small-scale processors, often with fewer collateral requirements, can pool resources, access bulk funding, and serve as local anchors for community-based agro-processing. 

Agro-crowdfunding platforms, such as Farmcrowdy, ThriveAgric, and Agropartnerships, enable project-specific fundraising related to agricultural development and agroprocessing inclusively.

How to Increase Your Chances of Getting Funded

One essential thing to note for an Agro-processing entrepreneur or an aspiring one is that you must position yourself as a partner, not just a beneficiary. Here are some other things to note:

• Write a bankable business plan: Investors require information and data, including market analysis, return on investment (ROI), break-even timelines, and risk mitigation strategies.
• Register with CAC and obtain relevant agro-processing certifications (NAFDAC, SON, etc.)
• Join a credible industry association, such as AFAN or MAN. Being part of a working network enhances your access to information and credibility.
• Building a digital presence through websites, social media, and e-commerce options signals a growth-oriented approach.
• Think sustainability: Funders seek climate-smart, inclusive, and future-ready enterprises with a structured plan for sustained progress.

Accessing funding for agro-processing is key in Nigeria, and so policymakers must continue to democratise access to funds, reduce friction in loan disbursement, and create incentives for long-term investment. Entrepreneurs, in turn, must professionalise, digitise, and scale. Agro processing is renewable, inclusive, and transformative.