NAIROBI, September 17- A new Sh7 billion private equity fund has been launched with the aim of investing in the buoyant agribusiness sector across sub-Saharan Africa.
The joint initiative between Sanlam Private Equity and the investment group, SP-Aktif, will focus on entrepreneurs who are involved in the agribusiness value chain, rather than directly in the farming industry.
Sanlam Private Equity Chief Executive Pieter Kriel said it would offer an opportunity for potential investors to tap into a new growing African market and give strategic assistance to the owners of the agribusinesses.
“Agribusiness is the mainstay of the private economy in most sub-Saharan countries,” he added, observing that on average the Gross Domestic Products (GDP) in sub-Saharan Africa have grown between six and seven percent in the past three years and the number of democracies had increased from four to 25 since 1999.
“The resultant effect is that these countries offer exceptional opportunities for investors,” he added.
The fund will look at businesses which offer value-added components along the agribusiness value chain which would ultimately create new growth opportunities for existing and emerging farmers.
“We will not invest in farms, but rather in the processing and marketing of farming outputs such as food, certain beverages and fibre products,” said Kriel. It will contribute risk capital and management know-how to fully unlock the potential of businesses.
They are already evaluating more than 20 possible investments in Kenya, Botswana, Tanzania and Uganda.