The Nigeria Sovereign Investment Authority (NSIA), managers of the country’s $1 billion sovereign wealth fund, has announced a $10 million agricultural financing to boost investment within the sector and enhance economic diversification.

“Agriculture is a sector of strategic   importance to the NSIA and an area we see opportunities for significant growth and profit through the facilitation of the enhancement of Nigeria’s critical agriculture infrastructure,” said Uche Orji, CEO of NSIA.

NSIA is collaborating with the Nigeria’s Ministry of Agriculture and Rural Development and German state-owned development bank KfW as sponsors and has selected Sahel Capital, an indigenous agriculture-focused investment and advisory firm to manage the fund.

It is designed to transform the agriculture finance landscape in Nigeria by providing equity and debt capital to sound Agric-focused SMEs, and is expected to grow from $10 million to $100 million through further collaborations with private sector investors.

Nigeria’s economic output is dominated by oil, a commodity that contributes over 80 percent of its national income. Given recent global oil discoveries including large reserves of shale oil in the US – the second largest importer of crude – as well as unstable local production due to oil theft, revenue accruing from the oil is expected to decline in the coming years, hence the need for alternative sources of generating income.

In contrast, Africa’s second largest economy has an abundance of agricultural reserves, with commodities such as groundnut, rice, cassava and palm oil available in exportable volumes if properly commercialized, making the sector a viable alternative for revenue generation.