Nigerian SWF-backed fund buys 3,500ha of farmland

The investment was made alongside ag manager UFF, in which South Africa's Old Mutual increased its share to 49% two years ago.

The UFF-NAIC Agriculture Fund, a vehicle jointly owned by the Nigeria Sovereign Investment Authority and South Africa’s UFF African Agri Investments, has acquired a 3,500-hectare farm in the Nigerian state of Nasawara.

The duo intends to develop the property, which includes 2,300 hectares of arable land, through a capital injection that will be used to build irrigation infrastructure, water reservoirs, grain storage and processing facilities. Transaction value was not disclosed. Neither the NSI nor UFF had responded to a request for comment at the time of publication.

Based in South Africa, Mauritius and the Netherlands, UFF manages six funds. Two of them, Futuregrowth Agri Fund III and Old Mutual African Agricultural Fund I, are currently being raised. It is partly owned by Old Mutual, which increased its stake in the business to 49 percent in May 2016, and invests in farms under a buy-and-lease model.

“The investment in the farm in Nasarawa provides the first co-investment opportunity in Nigeria,” said UFF joint managing director Erwin Bouland. “The lease model, coupled with the water security provided by this investment, fits with our objectives of reduced risk and consistent income provision for our institutional client base.”

The pair said expanding the farm’s infrastructure would help increase mills’ output tonnage by 60 percent and allow for two-season farming of maize and soya beans.

The NSI, which replaced the country’s Excess Crude Account, was established in 2012 to invest in productive sectors of the Nigerian economy. The vehicle gets its funding from monthly payments derived from the government’s oil and gas receipts. It comprises three vehicles: the Future Generations Fund, the Nigerian Infrastructure Fund and the Stabilization fund.

In November, its CEO said its assets had grown to $2 billion, including $1.5 billion of government contributions.