The Role of Private Sector in Leveraging Agribusiness Investment Opportunities in Nigeria
The Alliance for a Green Revolution in Africa (AGRA) had a Webinar on “Leveraging Agribusiness Investment Opportunities in Nigeria to Feed the Cities (The Role of Private Sector)” on Tuesday 25th of August 2020 to discuss the investment opportunities available at the Agribusiness Deal room session for the upcoming African Green Revolution Forum (AGRF) Summit 2020
The Vice President Strategic Partnerships and Chief of Party, Mrs Vanessa Adams, in her speech mentioned the urgency for a call to integrate globally to ensure food security.
“There is a huge change in interest and awareness globally for food systems to be inclusive and integrated..”.
She stated that the private sector can not work alone in ensuring food security; government policies have to be implemented to create an enabling environment for players along the value chain to work and ensure supply of food. She encouraged stakeholders to participate in the upcoming Africa Green Revolution Forum-Agribusiness Deal Room; a platform for integration between potential investors and players along the value chain.
The panelists for the session were Mr. Kola Adeniji, Chairman/Managing Director Niji Group; Mr. Ayodeji Balogun, CEO, AFEX Commodities Exchange Limited; Mrs. Bukola Awosanya, Group Head, Agricultural Finance & Solid Minerals, Sterling Bank Plc. and Mr. Emmanuel Adesina, Director, Investment Promotion, Nigerian Investment Promotion Commission (NIPC), the moderator of the discussion.
They discussed on the various challenges Small and Medium Enterprises (SMEs) in the agricultural sector face in making nutritious food available to the increasing city population and how these can be addressed through properly targeted funding in various segments of the value chain. The challenges are multifaceted and cuts across various sectors of the economy and it will take the integration of various stakeholders to address the prevailing issues.
The keynote speaker, Mrs. Ndidi Nwuneli, CEO-Sahel Consulting, Member Board of Directors, AGRA emphasized the commitment of SMEs to solve nutritional challenges in the country and the current trends militating against the goal.
She noted, “There are SMEs committed to solve food insecurity problems in Nigeria such as AACE, Dangote, and more but COVID-19 has brought more challenges and they are struggling with access to funding, limitation of data…”
She stated that investments must be made in data and traceability to ensure availability and accessibility of nutritious food and price stability in the system. This will be achieved through strategic partnership with standardization organizations such as SON and NAFDAC to not only ensure that food is supplied but nutritious food is made accessible to consumers.
In aspect of partnership, she suggested that the private sector should have advisory think tanks to work with the government to track availability and accessibility of nutritious food and the co-operation of all sectors while moral standards are upheld to ensure food security.
In her words, “We need Commissioners in Education (to equip the work force appropriately), Finance, Trade & Investment not just in Agriculture….we need transparency, commitment, integrity…”
To ensure that sustainable agriculture is achieved through proper investments in appropriate areas, Mr. Kola Adeniji explained the roles of stakeholders in the AGRICITY Model”. He stated that the model was built with a passion for agriculture, which is targeted at minimizing cost in the agricultural sector.
The cost burden is shared across different investors who have readily available inputs for investment. The model does not only serve as a pathway to strategic investment but also enhances sustainable agricultural production and benefits players across different aspects of the value chain.
Mr. Ayodeji Balogun, CEO, AFEX Commodities Exchange Limited further commented on the necessity to create a sustainable structure to ensure availability of sufficient financial resources in the sector. According to him we need to have multiple players to unlock liquidity for participants along the value chain, just as AFEX Commodities Exchange is currently doing.
He further emphasized that inclusiveness of youths/mentorship programs would be pivotal in ensuring a more competitive ecosystem. He stated that capital, knowledge, talent, productivity, and business models have to be put in place to achieve a good system in the sector.
Mrs. Bukola Awosanya, Group Head, Agricultural Finance & Solid Minerals, Sterling Bank Plc. mentioned that Sterling has committed 10% of its loan books to agriculture and this will be implemented through various packages for players along the value chain; these packages vary from Accelerated Agricultural Development Scheme to help youths to Sterling Mechanization Scheme.
A Digitization strategy which was targeted to build resilience in the agricultural sector during the lock down was implemented to ensure that agro-dealers have access to finance within 5minutes. Furthermore Sterling was committed to ensure food security during the COVID-19 era by reducing interest rate on loans to 5%.
To achieve food security for the growing city population, integration between stakeholders in the government and private sectors need to be enhanced through a sustainable system that ensures accessibility of data to relevant players along the value chain for proper financing of different segments in the agricultural sector.