COORDINATING AGRICULTURE AND ENERGY SOLUTIONS
Stakeholders in energy and agriculture sectors should work together to maximise their impact on rural communities, argue
HABIBA AHUT DAGGASH, ANDREW ALLEE AND ZIHE MENG
When I visited the Sa’achi Nku community in Niger State, I noticed that few businesses were thriving despite 24/7 power being available. Old, inefficient diesel rice mills were dotted around, yet none was in use despite heaps of rice paddy lining the path into the community. My local technician guide mentioned that fuel price increase, driven by subsidy removal and currency devaluations, had made them too expensive to operate. While alternatives that could use cheaper electricity were available on the market, local processors didn’t know about them. Moreover, they didn’t have the income or access to credit for new mills that could cost up to ten times their monthly income. Instead, they continue to rely on the old mills that produce low-quality rice that can’t retail in most urban markets.
Sa’achi Nku is one of nearly 200 communities electrified with solar minigrids by the Rural Electrification Agency (REA) since 2017. Its residents are among Nigeria’s many rural farmers with limited access to modern agricultural equipment. The Energizing Agriculture Programme (EAP) recognised the missing enablers of this access: equipment suppliers with rural supply chains, financiers who can provide affordable micro-loans to the unbanked, and local technicians who can offer maintenance services.
The EAP, a collaboration between the REA and RMI, an energy nonprofit, brought together energy, agriculture, and financial services companies to design solutions enabling rural entrepreneurs to gain access and ownership of efficient agricultural machines over time. The EAP tested these solutions by providing entrepreneurs with minigrid-powered equipment, including walk-in cold rooms, rice mills, corn threshers, electric bikes, soybean grinders, and a small oil palm factory. The beneficiaries pay small amounts monthly to use equipment until the upfront cost is paid off.
After a year of operation, switching from fossil fuel-powered equipment to electric alternatives has saved entrepreneurs up to 80% of their energy costs. In many cases, the new machines produce more output and at a higher quality. For example, the solar-powered oil palm factory in Adebayo, Edo state, produced an additional 57 litres of palm oil per tonne of fruit compared to the local artisanal mills (a 50% increase). The cold room in Kiguna, Nasarawa state, also prevented over a tonne of fish from spoilage. The EAP’s modest investment in 36 equipment generated 70 direct jobs and $110,000 in agricultural commodities in 17 communities—highlighting the immense value-creation potential of the agricultural sector in Nigeria’s rural economies.
In addition to supporting livelihoods, thriving agribusinesses have boosted electricity sales for the local utility that operates the solar minigrid. These utilities have historically struggled with low sales because their customers cannot afford more than a few units of electricity monthly. With customers using more power, rural utilities are better positioned financially, enabling them to price electricity cheaper and expand their energy services to more communities.
The Energizing Agriculture Programme has shown that sustaining rural agribusinesses depends on a network of service providers that offer affordable energy, credit, efficient equipment, and maintenance. However, initiatives by federal and state ministries of agriculture and development partners remain siloed. Clean energy project and agriculture projects for rural areas are planned and executed separately. This lack of coordination hinders innovation that could reduce energy costs, lower pollution, and boost business profits. Moreover, uncoordinated agricultural interventions may fail entirely due to expensive petrol and diesel costs that solar could help avoid.
The government and development partners must consider how their interventions use energy to design the best solution for beneficiaries, especially how renewable energy can be an alternative to spiralling fossil fuel costs. Furthermore, the government needs to implement policies that lower the costs of these technologies in the market, such as simplifying the import process and eliminating customs duties for renewable energy system components.
The African market for so-called productive uses of energy, including integrated energy-agriculture solutions, is valued at $120 billion. Its potential to create jobs and stimulate Nigeria’s agricultural production and exports, both of which are top objectives of the current administration, is evident from the EAP’s experience. Thus, energy and agriculture sector stakeholders must work together to unlock the potential and spur our rural economic development.
