ASHENEWS reports a new report by the African Agribusiness Outlook Report (AGRA) says that about 51 percent of agribusinesses in Nigeria recorded a decline in their revenues due to the triple challenges of COVID-19, the Russia-Ukraine conflict as well as climate change.
The report studied the impact of”Triple Crisis” of Covid-19 pandemic, climate change, and the Russia-Ukraine conflict – on small and medium-sized agribusinesses in Nigeria, Zambia, and Tanzania.
The report surveyed 1,623 agribusinesses in the rice, maize and tomato value chains in Nigeria, Zambia and Tanzania, and the soybean, maize and tomato value chains in Zambia.
According to the report, businesses have continued to grapple with soaring operational expenses in the wake of climate-related impacts and the ongoing conflict in Ukraine.
Also, the report said that medium-sized businesses were affected the most but have recovered faster than smaller businesses.
The report discloses that 58 percent of SMEs surveyed experienced substantial revenue declines of between 20 percent or more throughout the “triple crisis” period.
“In Nigeria, 51 percent of SMEs reported a decline in revenue since the 2019 Covid-19 outbreak.”
Analysing the impact of the crisis on different sectors and business sizes, it noted that maize was the hardest-hit crop in 2020 in Nigeria.
On climate change, it revealed that 32 percent of all businesses interviewed in Nigeria identified climate change, particularly unreliable rainfall as a concern.
Furthermore, the report identified transportation as a major challenge for businesses in Nigeria, with about 85 percent of businesses identifying it as a challenge to their operations.
To meet the challenges, it however said that only 42 percent of agribusinesses were able to inject additional capital into their businesses to stay afloat.
Out of this figure, only 12 percent of these businesses were able to access loans.
The report therefore recommended more collaboration between policymakers, financial institutions, and development organizations to provide supportive ecosystems that empower the Agribusinesses.
This should also enable them to respond to their three top asks: access to affordable finance, fostering a business-enabling environment, particularly with stable and predictable policies and supporting an effective regional trade system.
“The report recommends more focused, tailored, and concerted investment and support to improve quality and quantity of produce at the farmer level.
“This report recommends the adoption of policies that encourage the development of financial products specifically tailored to the agricultural sector and improving financial policies to enhance access to affordable credit.
“To optimize the efficiency of SMEs and reduce transaction costs, there is a call for improved market information. Enhancing information services related to supply and demand is vital, as it can facilitate better decision-making for agribusinesses.
“A well-informed market, it notes will lead to improved supply efficiency. The report calls upon governments to reduce fuel costs, mitigate currency fluctuations, ensure timely fertilizer subsidies, streamline business registration processes, and efficiently manage storage facilities,” it said.
