Policy in the portfolio: A view from inside the deal
Across 16 Trellis investments in five African markets, government policy shaped the speed and terms of every deal. Here's what we learned.
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Trellis is Acumen’s agriculture investment initiative, backing early-stage agribusinesses that build climate resilience and strengthen food systems across East and West Africa. Over the past three years, across 16 Trellis investments in Ghana, Kenya, Nigeria, Sierra Leone and Uganda, we have seen government alignment — and misalignment — shape every stage of the investment process. A regulatory body, a new government program, an expected policy shift, a licensing gap. Each has had a direct, traceable effect on the speed and terms at which Acumen’s Patient Capital moves.
Despite that, impact investors, Acumen included, have not captured these patterns consistently, nor have we fully acted on the opportunities they point to. This piece sets out what de-risks a deal, what creates friction for the companies we back, and how those companies have built bridges to the policy environment. We’re sharing it in the hope of seeing greater alignment between public initiatives and private innovation.
What de-risks a deal
A few patterns reliably improve our portfolio team’s confidence in a deal. Others just as reliably erode it. Taken together, they sit on a continuum that runs from enabling to prohibitive.
On the enabling side, predictable, product-specific regulatory policy stands out. Agroeknor, one of our Nigerian portfolio companies, owns one of only seven nationally accredited fumigation chambers in the country. That credential is hard to get, internationally recognized, and stable. It shows how a business model can be built around a specific enabling policy that has broad political support and durable funding.
Compliance regimes can work the same way. In cocoa, buyer and destination-market requirements — full traceability back to the farm, and verified freedom from child labor in the supply chain — are demanding, but they are also specific, documented, and enforced. A company that can meet them holds a credential its competitors don’t, and can price accordingly.
Government programs with clear eligibility criteria are another. When we reviewed Omia, an agri-input company operating in northern Uganda’s refugee-hosting districts, the rationale for expanding into a new district rested partly on Operation Wealth Creation, a national agriculture support program that had already put input-distribution and training infrastructure on the ground.
Trade policy, when it’s clear, can be powerful. In Nigeria, a 2020 presidential directive restricting foreign-exchange access for food imports reshaped the competitive landscape for two of our grain-sector investees, Zebra Crop Bank and Cropsafe. Local aggregators suddenly had structural demand that didn’t exist when cheap imports flowed freely. In Uganda, our coffee exporter Mountain Harvest benefits from restrictive export-licensing regimes in neighboring countries that Uganda doesn’t impose. When our investment teams can point to a durable trade policy and say, “This is why a market exists for this company,” the selection case gets stronger.
What creates friction
The prohibitive side of the continuum gets discussed less, and may be more useful. It comes back to two themes.
Policy ambiguity is the single greatest source of government-related friction in our due diligence. In one East African market, a proposal to fold a sector-specific regulator into a larger ministry was flagged as a standalone risk — not because the rules had changed, but because they might. Acumen can underwrite strictness. Neither we nor the companies we invest in can underwrite an absence of rules.
The second theme is the gap between import policy and export policy. Governments across our portfolio countries pursue import substitution, restricting selected imports to benefit local producers. What doesn’t always follow is the export-enablement infrastructure that lets those same producers grow beyond the domestic market. To export, a company may need fumigation accreditation, phytosanitary approvals, and an export license, each with its own agency, timeline, and fees. At the destination end sit tariffs that penalize processed goods. In between sits a working-capital cycle that runs 90 to 105-plus days from farmer payment to buyer wire, including roughly 60 days of sea freight. Stacked together, these layers systematically disadvantage small and medium-sized companies. One of our West African investees doesn’t export directly at all, despite strong international demand, because its balance sheet can’t absorb 30-plus-day receivables.
The power of public-private partnerships
In May 2023, we invested in Zebra CropBank, a Nigerian company deploying decentralized storage hubs at farmgates across the grain belt. The investment memo named Benue State as an expansion target and listed “state and local government partnership agreements” as a strategic priority. The founder, Buffy Okeke-Ojiudu, worked as a program management officer at the Economic Community of West African States (ECOWAS) — a major regional trade union — and built Entrepreneurs for Agriculture Transformation (E.A.T), a convening platform connecting agro-entrepreneurs with policymakers.
Within two years, CropBank signed a formal memorandum of understanding (MOU) with the Benue State Government covering land allocation, expedited regulatory approvals, and prioritized road and power infrastructure, in a process that also included the UN Development Programme. A year on from signing the MOU, the company operates across seven Nigerian states and into Cameroon, with more than 42,000 farmers engaged.
We see versions of this across the portfolio: a Kenyan founder who built an industry association to lobby on import tariffs, a Ghanaian company with a ministry official as a board observer, a Sierra Leonean cocoa company petitioning for a free economic zone. None were structured as partnerships at the time of investment. All function as formal operating partnerships now.
The catch is that each of these partnerships exists because individual founders built it from scratch. There is no repeatable pathway, no standard government intake process. The Benue MOU shows what a structured partnership looks like when it works. The open question is how that model reaches founders who don’t have ECOWAS on their CV.
What we propose
For national governments:
- Create a standardized pathway for agribusinesses to propose public-private partnerships, specifically for infrastructure co-investment — land allocation, regulatory fast-tracking, shared maintenance — rather than requiring each founder to broker their own MOU.
- Publish policy pathways even when they’re incomplete. A draft framework with a timeline does more for investor confidence than silence.
For development finance institutions and bilateral funders:
- Design instruments with explicit continuity language for what happens to portfolio companies if the funder’s own policy environment shifts.
- Where governments won’t, fund the regulatory enabling infrastructure that rarely attracts attention: accreditation labs, produce-monitoring boards, export-readiness programs.
For fellow impact investors:
- Build government and regulatory engagement, not just government and regulatory risk, into standard diligence templates, tracked with the same rigor as commercial and technology risk.
- Treat a founder’s policy engagement as an asset to be assessed and supported, not just a line on a CV.
- Share patterns like these across the industry. Individually, each of us sees one country at a time, one deal at a time. Aggregated, the signal becomes actionable.
What comes next
While policy is almost always referenced in a broad, contextual sense, there’s far less discussion about the consistent themes that can supercharge or poison a deal. The frictions we’ve named are always in our risk assessment, priced into our deal structures, carried forward in our monitoring. Those are real costs borne by real companies, and eventually by the farmers behind them.
The models for doing this differently are emerging. Work led by GAIN, FAO, and other partners through the Agrifood Systems Accelerator points toward new attempts at building the discourse and blending mechanisms that enhance alignment between sovereign commitments and private operational capacity.
If you’re an investor who recognizes these dynamics, we’d be interested to hear whether your evidence confirms, complicates, or contradicts ours. If you’re a government official designing agricultural policy, we’d welcome the chance to compare notes. The evidence our sector already generates should travel further than it currently does.
Support for this piece and Acumen’s Trellis initiative was provided by the Foreign, Commonwealth & Development Office (FCDO).
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