Nigeria’s cassava processing offers a compelling investment opportunity, but many small and medium-sized processors are struggling to raise capital to build or scale operations.
Weak investment readiness is the main barrier, according to findings from the Nigeria Cassava Investment Accelerator. In engagements with commercial banks, development finance institutions and impact investors, the Nigeria Cassava Investment Accelerator (NCIA) said processors often fail to provide evidence that their businesses can support the financing they seek.
The gap shows up in four areas: market feasibility, commercial viability, operational capacity and financial health. It is compounded by incomplete business plans and unaudited accounts.
To address the issue, NCIA outlines how processors can close the gaps to meet investor requirements. In no particular order, they are:
Market feasibility
The first step is establishing a viable market opportunity, anchored in verifiable evidence on market size, growth, substitutes and product competitiveness.
This analysis should be undertaken at the derivative level, as HQCF, starch, ethanol and other cassava products each have distinct buyers, pricing dynamics and commercial economics. Competitiveness against substitutes must be shown on price and quality together.
NCIA engagements with off-takers suggest price alone rarely wins the switch; what converts a buyer is consistent quality, demonstrated by securing the off-taker’s specifications and validating the product through trials.
Commercial feasibility
Two of the most common constraints to closing cassava deals sit on the commercial side: unsecured demand and unreliable feedstock. On demand, funders look for commercial commitments covering a substantial share of output.
According to NCIA, learnings from engagements with equity investors and lenders, commitments above 60 percent of planned production, with defined volumes, specifications and terms, give confidence that projected revenue rests on identifiable customers, while a single buyer accounting for more than 30-40 percent of sales leaves the business materially exposed if that relationship is delayed or lost.
On the supply side, feedstock reliability is key as cassava has high perishability (48-72 hours post-harvest, FAO). Thus, commercial lenders place significant weight on structured sourcing, typically expecting a processor to produce around 40 percent of its own feedstock, with the balance secured through outgrowers or aggregators rather than the spot market.
Operational feasibility
Funders discount a processor that cannot demonstrate capability to execute. A credible operating model has its critical technical functions already in place, staffed by experienced production, quality, maintenance and feedstock personnel with demonstrated cassava expertise.
Product scope also informs how funders read the operational risk: greenfield projects, which they approach more cautiously, are better served launching with one or two core derivatives before expanding into more technically complex lines.
Consistent quality must be underwritten by proper standardisation, permits secured or well advanced, and standards such as SON, NAFDAC, HACCP and ISO 22000, where relevant, embedded through documented quality systems, testing protocols and standard operating procedures.
Financial health
The final barrier is financial credibility, and it is where readiness gaps show most plainly: many processors approach funders without audited financial statements or the records needed to assess performance.
Demonstrating readiness starts with providing credible financial documents including financial models, before focusing on attractive returns.
NCIA engagements with development finance institutions also reveals that meaningful sponsor equity is important, as it signals commitment and cushions early setbacks.
Where a greenfield project has no historical performance to show, projections should be evidenced through feasibility studies, supplier quotations, pilot results and comparable operating benchmarks.
Investment readiness is the financing barrier that sits within a processor’s control and closing that gap is achievable.
The evidence across these four areas comes together in a single instrument: a credible, evidence-backed business plan that shows the market can absorb the output, that demand and feedstock are secured, that operations can deliver, and that the economics hold.
Processors who demonstrate this level of readiness are better placed to meet investor expectations and secure the capital they need to grow.