Sterling Bank Plc in collaboration with leading companies in the country gathered recently to discuss actionable solutions that could help Nigeria move away from dependence on importation for consumption and manufacturing—particularly agro-processing, Gilbert Ekwugbe reports.
Over the years, Nigeria has depended on importation to feed its population. Statistics indicate that Nigeria currently relies on approximately $10 billion of imports to meet her food and agricultural production shortfalls in wheat, rice, poultry, fish, food services and consumer-oriented foods.
However, efforts are being made to reverse this trend. As part of their contribution towards achieving this, Sterling Bank Plc, in collaboration with a host of blue chip companies like Leadway Assurance, Nestle, ThriveAgric, GIZ, Noor Takaful, Microsoft Nigeria and Stears Data, hosted the 5th edition of its Agriculture Summit Africa (ASA) with the theme, “Engineering a Trillion Dollar Agricultural Economy.” The forum attracted thousands of participants ranging from farmers, policymakers, financial institutions, governments, the investing community and thought leaders to discuss opportunities in the agriculture value chain. In two of the plenary sessions at the summit, the topic of raising the productivity levels of Nigeria’s agricultural sector was discussed extensively by stakeholders and industry players.
Following recent reports by, ActionAid Nigeria, an international non-governmental organisation, stated recently that, “Nigeria’s post-harvest losses have increased to an estimated N3.5 trillion annually,” adding that, “The effect of this huge N3.5 Trillion annual post-harvest losses will affect the West African sub-region,” this year’s ASA apparently concerned about the country’s inability to address its food security, devoted two panel sessions to address the twin issues of, “Unlocking growth in the Era of Value-Chain Finance” and “Maximizing Agricultural Productivity through Sustainable Means.”
Members of the summit’s opening panel tackled the pertinent construct of import substitution by unlocking growth in Nigeria’s agric sector, with the discourse moderated by African Farmer Folu Mogaji, and featuring industry players such as: Mrs. Victoria Nwadoka, from Nestlé Nigeria Plc; Mrs. YemManaging Director and Chief Executive Officer of Psaltry International Limited; a cassava processing company, isi Iranloye and co-Founder and Chief Technology Officer at Thrive Agriculture, Mr. Ayodeji Arikawe.
The discussion was aimed at establishing actionable solutions that could helpNigeria move away from dependence on importation for consumption and manufacturing—particularly agro-processing.
The session began with the panellists acknowledging that the recent COVID-19 pandemic and on-going geopolitical tensions have exposed vulnerabilities of the global supply chain, and how reliant the Nigerian economy is on importation. Taking the conversation into context locally, there are more peculiar issues plaguing Nigerians and making imports, and the overall outputs, more expensive. One of such issues is the volatile foreign exchange rate and rapid policy adjustments around importation such as increased import tariffs on selected agriculture goods. Therefore, the only sustainable way to maintain production and favourable pricing of agriculture products in Nigeria is by sourcing inputs locally.
Impact and importation
The panel also noted the impact and import of other factors such as achieving a sustainable means of exportation, processing of raw materials, availability of funds in the value chain, standards of production from the farm to the selling point, protection of local companies by the Federal Government as the economy continues its diversification from oil to soil.
According to the moderator, Mr. Mogaji, one of the key conclusions and submissions of the panel was the need to have various entry standards for operators in the value chain in order to encourage small and medium scale enterprises.
The panel also noted that Nigeria should begin to adjust policies observed in foreign markets to match in-market realities.
Another value-chain specific outcome of the panel specific was the need to standardize output to match local demand and adjust for international markets where possible. The example of Nigerian tomatoes was giving with the submission that it did not meet global standards in terms of sugar content. Meanwhile, barely a quarter of a century ago, the same variants of tomatoes being packaged in Europe. Which points to a clear need to improve on current techniques.
Therefore, operators in the country should look at how they raise their standards in a bid to satisfy local consumption and fulfill international demand.
Victoria Nwadoka of Nestle said “Nigeria should look inwards and leverage the opportunities that are in inherent in the agricultural value chains in order to achieve sustainability in agriculture.” She said, “We have challenges, but every country has challenges and if it looks inwards, then it will see the opportunities from the beginning to the end and from the farm to the table. There are many linkages that we need to open up and if we could succeed with opening up the entire ecosystem we will see how we can overcome import substitution.”
COVID -19 and Ukraine War
She said Nigeria could learn from the way the COVID -19 pandemic hit the global economy, which disrupted global supplies as well as the negative impact of the on-going Russian-Ukraine War, which made the cost of importation to skyrocket more than 100 percent, the cost of transporting goods to go up by about 200 percent, the time spent waiting for the goods to arrive and the risk of stopping industrial processes.
According to her, “If you didn’t have to deal with all of these, I think we will be more sustainable. Every month in the year from January to December, we have an opportunity to get the raw materials that we want. It’s important that we begin to look inwards if we want to be sustainable. Importation is not sustainable, depending on external factors, not sustainable. You need things that you can control, that are within your space; that you can manage; that you understand you can continue to improve on to be sustainable.”
Chief Executive Officer (CEO), Psaltry International, Yemisi Iranloye said knowledge gaps in the derivatives of some of the produce that we have a strong production capacity in needed to be closed, adding that other nations have been able to improve their overall output in the past decade by doing more with the same product. the last 10 years.
Giving the cassava crop as her example, Iranloye said “We have over 200 million people in Nigeria and almost every vicinity plants this crop. So, we can generate the volume that we need to be able to do different things. We can produce almost 300 different types of products from cassava.”
She explained that in order to unlock the supply chain in the country, “We need to understand the value chain because if you don’t understand the process end-to-end, then you will not be able to take full advantage of the opportunities. So we need to first of all understand the value chain and list out all the challenges as they were as well as list out qualities that the multinationals need.”
She also stressed the need for consistency and harmonization of policies initiated by the Federal Government for the overall growth and development of the agricultural sector in the country.
Thrive Agric Intervention
Mr. Ayo Arikawe of Thrive Agric said the company is coming into the agricultural space with technology, data, infrastructure and warehousing across the country, in partnership with Sterling Bank and other like-minded financial institutions to revolutionize the sector.
The second panel to focus on the topic of productivity was titled “Maximizing agricultural productivity through sustainable means”, and was led and moderated by an Executive Director, at Leadway Assurance, Ms. Adetola Adegbayi,with invaluable contributions from panellists including co-Founder and CEO of TomatoJos, Mira Mehta; CEO, ColdHubs Limited, Nnaemeka Ikegwuon; Director, SWAgCo Limited, Jide Arowosafe; Founder and CEO, JR Farms Limited, Olawale Rotimi and Technical Adviser, GIZ Nigeria, Ruskiyat Badmus.
The panel’s outcomes listed lack of a clearly defined structures in the agriculture space, the need for improved small-holder farmer awareness and social engineering in a bid to understand how to structure their finance better, improve productivity at the farms as well as improve in other aspects of the value chain such as transportation and storage to improve the output of the sector.
Others items uncovered as being key to increasing productivity were risk sharing structures like the creation of NISRAL by the Central Bank of Nigeria to guarantee farmers and the need for a mix of funding options like equity and debt funding.
The panel also submitted that the current make-up of the banking sector, with high interest rates and short-to-midterm cycles, is not the most conducive for farmers as the interest rates increase the cost of production, also noting that there is need for investors and financiers to that understand the long gestation periods of the agriculture sector and deploy patient capital with mid-to-longterm repayment periods, remarking that sometimes it takes as long as 10 years for some companies to breakeven and become profitable.
