Catalysing Investment

Viable opportunities for profitable investments in Northern Nigeria are being missed. For over three years, LINKS provided investment facilitation, investment promotion, independent evidence, and business development services to help unlock investment and finance across our target value chains.

Through our technical expertise and hard data for evidence-based decision-making, we aimed to increase investor confidence, reduce market entry costs and improve the likelihood that each project or investment opportunity will succeed.

Ultimately, we provided and essential LINK between firms, government departments and agencies, national financial institutions and development finance institutions.  

LINKS Investment Activities in Summary

  •       Technical assistance to domestic and foreign, large and small and medium enterprises in accessing finance to grow their businesses, establish new operations in northern Nigeria or reach export markets. This included supporting firms with Business Development Services to improve corporate governance and business and financial planning, to facilitate access to finance. This has facilitated over £42m in investment and working capital finance.
  •       We have also supported the strengthening of local actors such as investment promotion agencies to create an enabling environment in which to promote investment into LINKS priority states. This included training on investor aftercare, investor outreach and lead generation, and development of a suite of resources from a database of firms in KKJ to aftercare and outreach toolkits.
  •       LINKS also pioneered private equity (PE) and venture capital (VC) matchmaking with northern firms. We supported handpicked firms to refine business plans and develop pitch decks and then linking them with PE & VC investors brought from the South to Kano.
  •      Worked with cooperatives and a commercial bank to pilot the introduction of women owned and run environmentally friendly electric-tricycles (e-kekes) in Kano, also establishing a battery swap and service centre for the tricycles.

Case Study 1: Supporting the establishment of operations for a clean cookstove company in Kano

Company A is a US company that launched its first eco-cookstove manufacturing plant in Kenya in 9 years ago. It is now active in 6 other markets including Nigeria. An interesting aspect of its business model that enables the company to offer competitive prices for its stoves is its ability to claim Carbon credits on every unit sold which enables the company to reduce the end user cost while producing a robust and attractive product that saves the user money by burning fuel (charcoal or wood) more efficiently than traditional stoves.

LINKS was introduced to the company after they approached another FCDO project, Manufacturing Africa, for support in entering the Nigerian market where their target is to sell a million units mainly in the north. During our initial meeting the company preference was to manufacture in Ghana and ship finished products to Nigeria. LINKS therefore helped them cost the financial implications of producing in Ghana and shipping to Nigeria which was expected to be both expensive and complex.

Meanwhile, LINKS also helped the company explore opportunities to manufacture in the northern Nigeria itself, noting the company did not want to build a factory from scratch and sought to rent a large premises that would enable them to start operations quickly. The LINKS investment promotion team identified four qualifying sites and after a field visit the unit at one (owned by a different LINKS client) was selected. We also introduced the company to local businesses to help them identify local service providers (lawyers, accountants, construction services etc) that would give them confidence that it is possible to build and run a profitable business in Kano.

The factory shell rented out is now bring fitted out and will be operational by late 2023. The company is well on track to successfully implement its N2.3 billion investment and to create 350 jobs. While Nigeria was always going to be a key market for the firm, LINKS support in helping the company identify and select a location in Kano was an essential service without which the company would have been unlikely to establish a manufacturing facility in the North

Case Study 2: Facilitating a loan for an Agri-services company to provide inputs to 25,000 farmers 

Company B is a young fast growing tech driven agriculture services company that provides access to finance, inputs, extension services and markets for small holder farmers. The company claims to support over 250,000 farmers in Nigeria to increase yields and grow incomes. These relations are managed by the company’s bespoke tech, an operating system which manages relations with SHFs throughout the growing season. Main crops are Maize, Rice, Wheat Sorghum and Soybeans.

The company started pre-pandemic via crowdfunding, which they found relatively unreliable in terms of predicting cashflow while at the same time requiring regular payments to subscribers. The company thus wanted to change its funding model to commercial bank finance, to provide greater predictability to it business operations. The company’s founders had relatively limited experience of working with commercial banks and had been unsuccessful in receiving any debt funding offers when they approached LINKS.

The LINKS team approached 3 banks and helped the Company to develop a term sheet to better explain their business model. A Nigerian Commercial Bank made the best offer through a Nigeria Central Bank intervention scheme called Anchor Borrower Programme. The loan supported the provision of inputs and extension services to 25,000 farmers mainly in Kano, Kaduna and Jigawa. A factor that motivated the bank was an offer by LINKS to help monitor the farmers during the season. The loan was repaid and as a result, a successful ongoing relationship has been developed between the company and bank. Since then, the company continues to grow and in early 2022 received a $54 million funding package from Commercial Banks and Development Finance Institutions (DFIs)

COVID- 19 Response

Project implementation in these unprecedented times is challenging for all of us in Nigeria, but it presents new opportunities as well. As part of LINKS response to the COVID-19 outbreak and lockdown, we have taken a number of initiatives