ITFC issues US$44.9m financing to Senegal based ground nut oil processor to ensure ample raw material supply

SENEGAL – Senegal National Groundnut Company (SONACOS), has received Euro 40 million (US$44.9m) from the International Islamic Trade Finance Corporation (ITFC), to finance part of the 2021-2022 groundnut campaign.

SONACOS is a public limited company that has operated in the groundnut sector in THE West African country for over 40 years, with an annual processing capacity of 360,000 tons.

It undertakes its operations through five factories in Lyndiane, Ziguinchor, Diourbel, Louga and Dakar and works hand in hand with producers of groundnut seeds and other aspects of the value chain.

According to ITFC, the financial support will cover about 45% of the financing needs of the ground nut processor to secure the procurement of 150,000 tons of groundnuts arising from the current harvest from farmers.

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The nuts will further be processed into groundnut oil, animal feed, and edible groundnuts.

Mr. Modou Diagne Fada, CEO of SONACOS said, “SONACOS’ partnership with ITFC is crucial for us. ITFC’s funding provides a much-needed resource for our farmers and it’s a fundamental step to ensure a successful 2021/2022 groundnut trading campaign in Senegal.

“In addition, ITFC has a great understanding of the agricultural and African realities which is crucial for developing this sector. We want to thank ITFC for the unabated support over several seasons to this strategic sector for the country.”

The backing will support the full recovery of the Senegalese economy as agriculture is a vital sector that contributes about 16% to the country’s GDP with revenues from the export of groundnuts totalling EUR329.3 million during the 2020/2021 agricultural season.

The operation is particularly crucial as its impact will directly contribute to the SDG 1 “No Poverty” and SDG 2 “Zero Hunger”.

Commenting on the signing, Mr. Nazeem Noordali, COO of ITFC stated, “ITFC’s commitment to supporting the agriculture sector, especially the groundnut sector in Senegal, is for the long term and is of great interest to us.

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“We believe in the growth of the agriculture sector in Sub-Saharan Africa and we stand ready to support key actors such as SONACOS on projects that not only bring in financial value but directly impact farming and rural communities.

“That way, we are not only supporting the recovery of the national and regional economy, but we are also contributing to creating and sustaining jobs and empowering farmers.”

The recent support brings the total financing approved by ITFC in favor of Senegal to over USD 1.1 billion under 19 operations since the inception of ITFC in 2008.

Ground nut production decline by 3% in 2019/2020

According to the International nuts and dried foods statistical year book 2019/2020, global groundnut production reached over 41 million metric tons in the season under review which was 3% down from the previous season.

However, this was 7% above the prior 10-year average reflecting the total production growing trend observed over the last decade.

Senegal ranked among the top groundnut producing countries during the season, with China in the lead accounting for 38% of the world peanut crop, followed by India with 15%. The next 20% was produced by Nigeria (8%), the USA (6%), Senegal (3%) and Argentina (3%).

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