Norfund’s has invested ZAR 75 million in the fund and the total fund size is about ZAR 800 million.
The fund’s main investment focus is on the value added components of the agricultural value chain involving processing, distribution, marketing and branding as well as services. While the Fund have some exposure to early stage businesses, its main focus is on later stage investments where capital is allocated to the development and expansion of existing ventures.
Investment into the agricultural sector can lead to improved marketing, distribution and pricing of food products, which in turn can have a marked effect on the food prices paid by the rural and urban poor. An estimated 25% of rural household incomes in SSA originate from employment in agribusiness activity, either through formal or informal/ self-employment. Investment into this sector will therefore have a direct impact on employment.
Agribusiness activity also has significant multiplier effects on employment patterns in rural areas. Growth in commercial agribusiness activity creates momentum for other, indirectly related services and manufactured goods. The significance and multiplier effects of agribusiness imply that the sector has strong potential to support local entrepreneurial development and economic self-determination. Agribusiness also provides critical inputs and services to the farming sector and so improves the cost competitiveness and the quality and safety of its products.