By Editor
Despite cassava processing offering a lucrative opportunity for investors, small and medium-scale processors continue to face significant hurdles in securing the capital required to build or expand their operations.
In the Nigeria Cassava Investment Accelerator (NCIA), engagement with financiers—across commercial lenders, development finance institutions (DFIs), and impact investors—reveals that weak investment readiness remains a major constraint. Simply put, many processors struggle to provide clear evidence that their business can support their investment request.
That readiness gap typically surfaces in four recurring areas: market feasibility, commercial feasibility, operational feasibility, and financial health—often compounded by incomplete business plans and unaudited accounts.
The NCIA’s practical guide on how processors can close this gap and demonstrate true investment readiness, include, Market Feasibility. The first step is establishing a viable market opportunity anchored in verifiable evidence regarding market size, growth, substitutes, and product competitiveness. This analysis must be conducted at the derivative level, as High-Quality Cassava Flour (HQCF), starch, ethanol, and other cassava products each feature distinct buyers, pricing dynamics, and commercial economics. Crucially, competitiveness against substitutes must balance both price and quality. NCIA engagements with off-takers suggest price alone rarely seals the deal; what converts a buyer is consistent quality, verified by meeting specifications and completing successful product trials.
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In the case of Commercial Feasibility, two of the most common hurdles 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. NCIA learnings from equity investors and lenders show that commitments above 60% of planned production (with defined volumes and terms) provide confidence that revenue is tied to real customers. However, reliance on a single buyer for more than 30–40% of sales creates significant risk if that relationship falters. On Supply, feedstock reliability is critical due to cassava’s high post-harvest perishability (48–72 hours, per the FAO). Consequently, commercial lenders favour structured sourcing—typically expecting a processor to farm roughly 40% of its own feedstock while securing the rest through contracted outgrowers or aggregators rather than volatile spot markets.
Regarding Operational Feasibility, funders quickly discount processors that cannot demonstrate an ability to execute. A credible operating model must therefore feature: experienced personnel, critical technical roles in production, quality, maintenance, and feedstock management staffed by proven cassava experts.
Moving on, the NCIA highlights another point which is ‘Focused Scope’. It states that “Greenfield projects are approached cautiously; they are best served launching with one or two core derivatives before expanding into complex product lines. Also, on standardization, it notes that “Regulatory compliance and standards (such as SON, NAFDAC, HACCP, and ISO 22000) must be embedded through documented quality systems, testing protocols, and standard operating procedures.”
The last point is on ‘Financial Health’. Financial credibility is where readiness gaps are most obvious. Too many processors approach funders without audited financial statements or the records needed to evaluate historical performance.
Demonstrating readiness requires providing credible financial documents—including clear financial models—before pitching high returns. Furthermore, NCIA engagements with DFIs highlight that meaningful sponsor equity is crucial; it signals long-term commitment and buffers against early setbacks. For greenfield projects without historical performance, projections must be backed by thorough feasibility studies, supplier quotes, pilot results, and operating benchmarks.
Investment readiness is a financing barrier that lies entirely within a processor’s control.
The evidence across these four areas comes together in one central instrument: a credible, evidence-backed business plan. By proving that the market exists, supply and demand are secured, operations are sound, and the economics hold up, cassava processors can comfortably meet investor expectations and secure the capital required to scale.
