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Tag: agribusiness

  • FG to empower 2000 women in Agribusiness

    FG to empower 2000 women in Agribusiness

    The federal government is set to empower 2000 women from Jigawa, Adamawa, Kaduna, Kano, Anambra, Niger and the Federal Capital Territory (FCT) in Agribusiness.

    The Ministry of Women Affairs said the programme is designed to support women cooperatives engaged in profitable and sustainable rice production in collaboration with Green Agriculture West Africa Limited, a subsidiary of China Geo-engineering Corporation (CGC).

    This pilot programme is expected to empower the women through the establishment and facilitation of cooperatives, which would serve as mentoring platforms for aspiring women rice farmers, with apprentices constituting 50% of the cooperative membership.

    The special assistant, media to the minister of women affairs, Ohaeri Joseph in a press statement said the programme’s kickoff was marked by a two-day “Train the Trainers” programme, held in collaboration with the CGC Nigeria Limited at the Nigerian Agricultural Demonstration Center in Ushafa, FCT.

    He said the minister, Uju Kennedy applauded President Bola Tinubu for his unwavering interest and support for women’s economic empowerment.

    She also expressed her gratitude to CGC for their support and dedication to the cause, emphasizing the pivotal role such collaborations play in advancing women’s development, as she seized the opportunity to call for increased cooperation and support from both public and private stakeholders to further amplify the impact of the program.

    According to him, as a gesture of support, the Managing Director of CGC, Mr. Wang Xiemin pledged to donate high-yield rice seedlings to the cooperatives once their lands are prepared.

    The special adviser added: “Further enhancing the women’s capacity to engage in sustainable farming practices. He also indicated that the company will step up the collaboration on more agricultural training and other partnerships across various agricultural chains which will extend to peanuts, corn, cassava, vegetables and other agricultural products.

    Read Also: From architecture to agribusiness, Oluwaseun’s daring exploits

    “A highlight of the closing ceremony was the presentation of certificates to the newly certified trainers, who will play a pivotal role in disseminating knowledge and expertise within their respective cooperatives. This not only acknowledges their commitment but also symbolizes a tangible step towards building a network of skilled and empowered women in the rice production sector.

    “The federal Ministry of Women Affairs is optimistic that this program will contribute to the economic empowerment of women and foster sustainable growth in agribusiness aligning with broader national development goals. As the program progresses, it is expected to serve as a model for future initiatives aimed at empowering women in various sectors of the economy, driving positive change, and fostering inclusivity.”

  • From architecture to agribusiness, Oluwaseun’s daring exploits

    From architecture to agribusiness, Oluwaseun’s daring exploits

    Oluwaseun Obadan is the founder/chief executive, Arso Farms, an agro-allied company focused on improving health and wellness through the nutritional potency of indigenous greens or veggie products. The architect-turned agri-preneur launched a successful agribusiness after drawing inspiration from her personal health challenge which gave an insight into the incredible healing power of African greens. She shares her intriguing entrepreneurial story and her future plans with DANIEL ESSIET

    It was a career switch inspired by her personal health challenge. And it all started when Oluwaseun Obadan, a 2018 Master of Science (MSc) degree in architecture holder, from Caleb University, Lagos, grappled with a severe illness which, according to her, was diagnosed as anaemia. It was during the period of the health challenge, when the medical community was trying to decipher the cause of her pain that her mother decided to take matters into her own hands.

     Pronto, Oluwaseun’s caring mother started juicing greens for her and, remarkably, the intervention facilitated her recovery. “I began to recover. It was through this experience that I discovered the incredible healing power of greens, and I became determined to celebrate and create awareness about the potency of our African greens. We set out to make them more accessible and convenient to everyone, using technology for sales, payment, and logistics,” she narrated.

    That was how Oluwaseun’s transition from architecture to agribusiness came to be. And Arso Farms, an agro-allied company, which she founded and runs as Chief Executive, has been the vehicle she has been using to propagate her gospel of improving the health and wellness of individuals by leveraging the nutritional potency of indigenous greens or veggie products.

    Oluwaseun, who earned a First Class in Architecture in Sept 2016, has, within a remarkably short time, blossomed into a successful agri-preneur, having grown Arso Farms, a small outfit, into a hub of agri-tech innovation.

    “With Arso Farms, it’s a direct farm-to-doorstep experience,” Oluwaseun told The Nation, re-emphasizing that “We set out to make indigenous greens more accessible and convenient to everyone, using technology for sales, payment, and logistics. As she reiterated, “Arso Farms was born out of a personal pain point. The desire to celebrate and create awareness and make a positive impact on the health and well-being of individuals and communities propelled me into the agriculture sector.”

     However, Oluwaseun’s transition from architecture to agribusiness was not a walk in the park. It came with initial challenges, notably knowledge gaps, for instance. But the budding agri-preneur refused to be discouraged. “To overcome this, I actively collaborated with colleagues in agriculture, engaged in continuous learning through programs like the Academy for Women Entrepreneurs by the US Consulate, sought mentorship, and learned from mistakes along the way,” she told The Nation.

     Access to finance was also a significant obstacle. Despite initiating the business with personal savings, expanding an agribusiness requires substantial funding. Again, Oluwaseun was determined to scale the hurdle. This she did by applying for grants and participating in incubators, such as the Orange Corners programme by the Consulate of The Netherlands.

    “These experiences have been instrumental in shaping and sustaining the growth of my venture,” she admitted.

     Evidences of Arso Farms’ impressive growth trajectory abound. For instance, Oluwaseun said the company, which initially began with a team of one, currently has five dedicated and highly motivated workers. Arso Farms has also transformed from a traditional production company into a dynamic digital agri-tech business operating across production, processing, logistics, and distribution within the vegetable value chain.

    Oluwaseun has also successfully diversified the company’s customer base from local farmer’s markets to include premium retail stores, pop-up farmer’s markets, and an online audience, enhancing product accessibility and reducing dependency on intermediaries.

     Arso Farms’ valuation has also increased from N1 million to an N50 million, this year, even as Oluwaseun has secured a place in the Orange Corners accelerator programme, gaining access to grants and partial loans totalling over 45,000 euros. And for these wins, she said an entrepreneur needed to have passion, experience, determination, network and action to be successful.

    Apparently drawing strength from what she has achieved so far, Oluwaseun proudly said agriculture is the way to go, noting that farming has put food on her table. Her words: “Beyond personal sustenance, our farming initiatives have significantly increased the income of our female partner farmers, empowering them to support their children through university. I am proud of the milestones we’ve achieved.”

    Read Also: FCMB gets Agribusiness Investment Award

    The Architect-tuned agri-preneur, however, said the spirit of an entrepreneur always seeks growth and improvement. “So, there’s always more to aspire to. Among our notable accomplishments, creating sustainable income opportunities for local female farmers and delivering fresh, nutritious produce to our community ranks high,” she said, pointing out that the journey of entrepreneurship has taught her the importance of resilience, adaptability, and the power of collaboration.

    “My key success factors include a commitment to quality, sustainable practices, fostering community relationships, and embracing innovation in every aspect of our business, Oluwaseun said, adding that she loves to spend most of her free time in promoting social entrepreneurship, women empowerment and volunteerism work; she had spoken about venture capital, diversity and youth empowerment in various conferences around the country.

     Oluwaseun, who personifies the saying that “every challenge is an opportunity in disguise,” stated that “Combining my architectural expertise with my passion for agriculture, I address the interconnected challenges of youth unemployment, gender equity, food security, and health and wellness. Arso Farms creates sustainable employment opportunities that empower women in agriculture and ensure access to nutritious food.”

    According to her, the company prioritized partnerships with female farmers, providing them with training, resources, and support to enhance their skills and productivity. Her words: “By fostering an inclusive and empowering environment for women in agriculture, we aim to address gender disparities and serve as a catalyst for their success.

    “I actively engage in initiatives and programs that promote women’s entrepreneurship and leadership, including the Academy for Women Entrepreneurs by the Bureau of Educational and Cultural Affairs and the Mckinsey Forward programme for African female leaders in business.” 

    Oluwaseun said through sharing her entrepreneurial journey, she aspires to inspire and empower other women to pursue their passions and excel in agriculture. “At Arso Farms, we actively address youth unemployment by providing meaningful employment opportunities in the agricultural sector.

    “We believe in empowering the youth through comprehensive training and involvement in various farm operations, from cultivation to packaging and delivery,” she declared, noting that by equipping them with skills and fostering their entrepreneurial spirit, the company contributes to their economic growth and development, creating a generation of skilled farmers and reducing youth unemployment.

    Oluwaseun recalled that the COVID 19 pandemic period, which left families with sad tales, was a positive one for her and her company.

    “The onset of COVID-19 presented a unique opportunity for us to create an impact during those trying times, we extended our services to over 100 families, providing them with fresh, nutritious greens right at their doorstep. Our mission is not just to sell vegetables; it’s about promoting health and convenience for our customers,” she said

    The budding agri-preneur emphasized that agriculture is Nigeria’s new oil.

    Her words: “As Nigerian youth, we must recognize that agriculture is the new oil, with innovation as the vehicle to success. My colleagues at Orange Corners are working on various aspects of the agricultural value chain, from commodity trading, to coconut byproducts, fortified beans, and nutritious cereals that improve child nutrition.

    “They are also making strides in agricultural services, particularly in food safety consulting. The Nigerian market is ripe and ready, offering countless opportunities.”

    Encouraged by what she considers a promising future for agriculture and various operators across its value chain, Oluwaseun is looking into Arso farms’ future with so much optimism. “Our goal at Arso farms is to corner a significant market share for our ready-to-use veggie packs in one year, earn a minimum revenue of N2 million monthly specifically on our ready-to-use veggie brand,” she declared.

    According to her, this is targeted at the company’s vision of a health and wellness agro Fast Moving Consumer Goods (FMCG) that improves the health and wellbeing of individuals especially Africans. She said achieving this one-year goal will give the company a competitive advantage and a solid foundation for other products, such as its Green Life Mix Veggie powders.

    “This will position us as the leading agro wellness brand that improves the health and well-being of individuals in Lagos State. We can then leverage this position to expand to other economically viable states, such as Abuja and Port Harcourt.

    “Our future plans involve further expanding our product line, reaching more African countries with our export products, and continuing our commitment to empowering female farmers. We want to have our products, especially those made from local Nigerian produce, in homes all over the world. Sustainability and positive social impact remain at the forefront,” Oluwaseun told The Nation.

    Young, hardworking and beautiful, Oluwaseun, who boasts experience in marketing, business development, product development, business operations, and strategy, however, shared a few success nuggets for aspiring entrepreneurs who wish to develop and grow successful businesses. She said: “Collaborations and partnerships are key to moving forward swiftly. The agricultural value chain is vast, with myriad opportunities waiting to be explored. Take that first step, and take it boldly.

     “Nothing is entirely new under the sun, but everything can be improved upon, and that’s where innovation comes in. My company, Arso Farms, was recently inducted into the Orange Corners network, a hub for young Nigerian innovators for our focus on solving the pervasive issue of post-harvest loss through processing vegetables.

    “This was an exciting milestone for us after years of bootstrapping. But what’s even more thrilling is witnessing how young Nigerians with similar ambitions are channeling innovation to improve existing solutions.”

  • Short term framework for ease of doing agribusiness

    Short term framework for ease of doing agribusiness

    The Ministry of Agriculture and Food Security is planning immediate and short term goals for developing a standard framework for ease of doing agribusiness.

    Minister of Agriculture and Food Security Abubakar Kyari stated this yesterday in Nasarawa State, at the opening of the Annual Agricultural Show, organised by National Agricultural Foundation of Nigeria (NAFN). Its theme was ‘Towards the Realisation of the Presidential Declaration of Emergency on Food Security’.

    Kyari noted that the Agricultural Show has become a veritable tool for showcasing latest developments within the agricultural sector. “It brings people together, to network, to do business and to give the public a glimpse into farming life,” he said.

    According to him, activities in the show present spin-off benefits to stakeholders in the sector by serving as high-level platforms for business-business linkage, technology transfer, knowledge exchange, public-private collaboration and policy discourse among participants drawn from all walks of life. He added that it also provides a hub for the farming and rural community to meet, exchange ideas.

    National President of All Farmers Association of Nigeria (AFAN) and Chairman, BoT of NAFN, Kabiru Ibrahim, appealed to the government for direct subsidy on fertilisers to farmers.

    Ibrahim lamented that a number of smallholder farmers are in debt because they cannot afford to buy fertilisers at current prices.

    Read Also: Niger govt decries rot in state-owned agribusiness, vows to revive project

    He reiterated the need to incentivize smallholder farmers through the stemming of insecurity that impedes seamless access to farms.

    According to him, there is also need to provide direct subsidy on seeds and inputs by all tiers of government, and the continuous provision of mechanisation through the provision of light agricultural farm machinery before making heavy duty tractors, combined harvesters.

    Ibrahim however appealed for the resuscitation of the National Food Reserve Agency (NFRA) to make good seeds easily accessible and affordable to all Small Holder Farmers.

    Nasarawa State Deputy Governor, Dr Emmanuel Akabe, said agriculture remains the cornerstone for sustainable socio-economic development of the country. “It is the hub through which Nigeria can achieve a tripartite benefit of creating employment, generating wealth, as well as establishing industries that will process agricultural produce for consumption and exportation,” he said.

    Akabe called on stakeholders, captains of industries and development partners to invest massively in agriculture to transform Nigeria into a virile country for food security and value chain addition.

  • ‘Agribusiness key to unlocking economy’

    Agribusiness, not agriculture, remains the key to unlocking the economy, the Programme Director, Lagos Business School (LBS), Mr. Kelikume Ikechukwu, has said.

    Ikechukwu, who described agriculture as activities, such as crop production, fishery, forestry and animal husbandry, however, said agribusiness encompassed  land, people, packaging, processing, transportation and the export of produce which goes beyond just farming.

    “For instance, an agribusiness practitioner will take maize and extract ethanol and raw starch from it to produce industrial starch needed by textile industries.

    “The industrial starch is produced outside Nigeria, but the raw starch that is  used in producing  industrial starch comes from Nigeria,” he said.

    The LBS director added that if agriculture were truly the key to unlocking the economy,  then Cote d’Ivoire, the richest country in cocoa production, would have ranked the  biggest in the cocoa value chain.

    His words: “Switzerland, however, is the biggest in the cocoa value chain, but it does not produce cocoa. That is why agribusiness is the key to unlocking the Nigerian economy.

    “If we begin to expand it, you will see how big the agribusiness space is compared to agriculture; that is why it holds the key and not agriculture.”

    Ikechukwu advised youths interested either in agriculture or agribusiness to seek knowledge and experience first before pursuing money because agriculture requires experiential learning for its practitioners to be successful.

    “Money should not be the first thing to consider when anyone is  going into agriculture or else such will lose all the money; rather get knowledge and information which will serve as guide.

    “You need to dirty your hands and build experience by going to the farm to understand the terrain be-fore you can become successful in the financial aspect,” Ikechukwu said.

    He urged youths to take advantage of the opportunities in the agric space to meet the increasing demand for food by  a growing population of 200 million people.

    “Our population is slightly above 200 million people and there is a problem with the age distribution because 43 per cent of our population lies between the age grade zero and 14 years.

    “This means that we have over 90 million children that must be fed. So, we need more youths that will go into agriculture in order to meet the increasing demand for food,” he said.

    The director urged the private sector to show more interest in organising empowerment and capacity building programmes where several youths could benefit from.

  • Stanbic IBTC, EDC partner on agribusiness

    Stanbic IBTC Bank PLC is partnering the Enterprise Development Centre (EDC) at the Lagos Business School to build capacity for agribusinesses.

    Both institutions will hold a capacity building series tagged Agri-Business Small and Medium Enterprises Investment Scheme (AGSMEIS) to build capacity for agribusiness ecosystem in the country.

    The course content will include essential topics such as Understanding your Market (Competition Analysis, Marketing Plan, Segmentation), Operation and Business Model, Business Plan (Template review and Development) and Understanding the AGSMEIS Application Process Pitching Activity.

    The bank, renowned for its support for the Small and Medium Scale Enterprises (SME) sector, announced that its AGSMEIS capacity training, which started on February 26 would end on March 6.

    It also offers a wide array of banking solutions as well as funding, skills acquisition and other support to the SME sector.

    The AGSMEIS is an initiative of the Bankers’ Committee to provide support to and complement the Federal Government’s efforts at promoting Agri-businesses/Small and Medium Enterprises as a vehicle for sustainable economic development and employment generation.

    Head, Enterprise Banking, Stanbic IBTC Bank Plc, Ayodele Ojosipe, reiterated the bank’s commitment to providing the right support and solutions for individuals and businesses to achieve their goals.

    “Stanbic IBTC’s commitment to building capacity among enterprises stems from its deep understanding of the important role enterprises play in providing linkages to industries, employment generation and driving growth of the economy,” he stated.

  • Leveraging investment in agribusiness for food security

    Nigeria and other African countries are wasting foreign exchange (forex ) on importing foods that can be produced locally and exported. But, this may soon be redressed by those investing in agribusiness, writes Assistant Editor OKWY IROEGBU-CHIKEZIE.

    Efforts to achieve self-sufficiency in food production, promote industrialisation and create jobs are on course.

    Those behind the push to halt or significantly cut down on Nigeria’s humongous foreign exchange for the importation of foods that should be produced locally and even exported are private sector investors whose massive investments in agribusiness hold promises.

    Leading this charge BUA Group and Dangote Group. For instance, BUA Sugar has since anouncd an investment of $300 million in Lafiagi Sugar Company (LASUCO), in Kwara State. This will help grow the country’s sugar output by two million tonnes (mmt) per annum.

    According to the Managing Director, BUA Sugar, Mr. Ibrahim Yaro,  BUA remained committed to becoming a mega local sugar producer and first sugar exporter in the country. According to him, the company remains committed to partnering with the government in ensuring the success of the backward integration policy of the sugar industry as well as in its drive to resuscitate and develop other areas of the Nigerian agric sector.

    He explained that BUA’s interest in the local production of raw sugar brought about the acquisition of LASUCO, which he said has over 20, 000 hectares of arable land, suitable for sugar cane plantation and is strategically located to serve the northern and southern markets of the country.

    He stated that the 500 hectares earmarked for its nursery development in 2016 had been developed; adding that similarly, what is currently ongoing was the land clearing and development preparation for additional 5,000 hectares which would take the company through 2018. “

    Africa’s richest man and President of Dangote Group, Alhaji Aliko Dangote, has also stepped up his investment in agriculture.

    In doing so, he said he believes that the Federal Government leveraging the agric sector to diversify the economy remained the solution to achieving food self-sufficiency and creating a healthy economy.

    Dangote spoke at a meeting with some Asian businessmen in his Lagos office.

    He said without the new approach at redirecting the economy from its import dependence to an export-oriented one, which the administration is leading, no meaningful change  can happen. He noted that it was because of his belief in the government’s approach at re-energising the economy to make it export oriented that made him step up his investment in agriculture for food sufficiency.

    “We have invested massively in rice, sugar, dairy products, and tomatoes. Our rice-out grower scheme will produce rice by next year. This will reduce our rice import to nearly zero because Nigeria imports more than half of the rice it consumes,” he told the Asians.

    Specifically, Dangote said his company has expanded its sugar operations in Tonga in Nasarawa State, in addition to Numan sugar projects, where sugarcane is cultivated.

    “Some months ago, we laid the foundation for the construction of an ultra-modern rice processing integrated plant that will process 16 metric tons of paddy rice in one hour. By the time you multiply this by the number of hours and days it operates, you will understand that this is huge,” he added.

    Dangote said the interesting thing about investment in agric is that apart from food production sufficiency, the job potential is unquantifiable. He said he was investing in agribusiness and promoting industrialisation through backward integration to ensure that Nigeria became self-reliant in food production in good time to save the much needed foreign exchange.

    To underscore the company’s emphasis on backward integration, Dangote said: “We are producing the raw materials needed in our factories. In the sugar sector, we developed a sugar backward integration project plan targeted at the production of 1.5 metric tonnes (mt) per annum from various sites across Nigeria, in the next 10 years.”

    He explained that his organisation has a scheme involving 20,000 out-growers who will grow about 180,000 tons of paddy rice for processing.  He also said rice processing mills are being built in Kano, Jigawa, Sokoto, Zamfara, Kebbi and Niger states in the first phase.

    Dangote added that in the second phase, other mills will be built in Nasarawa, Kogi, and other states, noting that with the six mills, the company will achieve a capacity of 700, 000 metric tons per year of par boiled rice. The target, according to him, was to be the largest rice producer in Africa, which is a bold step in making Nigeria self-sufficient in rice production.

    The Nation learnt that the Dangote Group stepped up its investments in agriculture and food production following the Federal Government’s policy of economic diversification that placed emphasis on agric rather than oil and general importation. He hailed the government’s economic recovery and growth plan, saying his investments in refinery, petrochemical and fertiliser production were in that direction.

    According to Dangote, the decision of the Federal Government at diversifying the economy from oil only to agriculture-centred one remained the viable solution to the myriads of economic conundrum that Nigeria is facing

    He, however, said the private sector has important roles to play, which was why his Group has taken up the challenge to lead the way as a leading private sector operator. He said with the government providing the right environment through good policy formulation and implementation, it will be a matter of time before Nigeria would become one of the world’s economic powers.

    Experts say that the African population is expected to double by 2050, meaning that food demand on the continent is expected to at least double. Beyond the need to feed the expected population bulge, increase in food production and productivity will not only create jobs in agriculture, but also in upstream, downstream and support activities.

    The consensus is that food self-sufficiency is achievable, and that Nigerian and other African countries can be net exporters of food products instead of their current status as importers. This optimism is largely hinged on the availability of arable land for agribusiness, population and market.

     

    The challenges

    As promising as the agric sector is, there are still hurdles to cross. For instance, there is too little data on crop types, production areas and harvest prospects. This, according to experts, complicates planning while often leaving smallholder farmers without the necessary advice and support to improve their production and income potential.

    It also complicates the implementation by small farmers of the quality and food safety standards necessary for food businesses.

    Also, banks have strict risk management requirements that complicate the provision of financing to small family farmers. Without precise knowledge of their farms, harvests and incomes, the risk of granting loans is simply too high and the interest rates on loans granted by banks or microfinance institutions vary between 20 and 40 per cent, which limits their scope.

    The thinking is that it is necessary to aggregate farmers into formal groups and cooperatives. This will make it easier to work with them, train and support them, for example in traceability and certification processes that are mandatory for food manufacturers.

    Experts, however, say that most of these challenges can be solved by connecting the various actors in the agricultural value chain through digital marketplaces that manage the supply from smallholder farmers, manage the stocks and manage the commercialisation of agricultural products and their transport.

    Through these digital marketplaces, banks and insurance companies will have access to the data necessary to reduce their risks and thus be able to serve the untapped market of smallholder farmers.

    In all of these, the role of the private sector is said to crucial in the transformation of Nigeria and Africa’s agriculture. Agri-food firms have massive purchasing power, while smallholder farmers are looking for ways to improve productivity and quality as well as increase their production and income.

    The belief is that when farmers are integrated into global value chains, both sides benefit: farmers improve their incomes by having easier access to markets and private companies have access to the raw materials needed to produce their goods.

  • Banks bridge funding gap for agribusiness

    The Central Bank of Nigeria (CBN) is working with the Federal Government and banks to boost funding for agriculture. The banks are supporting agric financing through CBN-backed intervention schemes that promote single digit interest rate on loans, writes COLLINS NWEZE.

    Banks with eyes on the future are having a rethink about agricultural financing. Gone are the days when commercial banks were excluded from funding agric projects and its value-chain.

    Today, many banks have identified the agricbusiness as a key area to play in this period of deposit drought and reduced profitability.

    This has given  farmers  more credit to expand their farms and meet the increasing needs of consumers, both  for consumption and raw material for industries. Besides,  food production is a major challenge all over the world, and with rising population, the demand for food has made it imperative for countries to invest heavily in agriculture and banks are playing major roles to see that huge funding goes to agriculture.

    However, to increase funding for the agric sector, the Central Bank of Nigeria (CBN) in collaboration with the Federal Government and the Deposit Money Banks established agricultural intervention schemes like the Commercial Agriculture Credit Scheme (CACS), Commercial Agriculture Development Programme (CADP), the Interest Draw-back scheme, Agricultural Credit Support Scheme as well as the recently introduced Anchor Borrowers’ Programme (ABP).

    The CBN Governor, Godwin Emefiele, said the broad objectives of the  schemes are to fast track development of the agricultural sector by providing credit facilities to commercial agricultural enterprises at a single digit interest rate. They are also enhancing national food security by increasing food supply and effecting lower agricultural produce and product prices. These have also promoted lower food inflation and diversification of revenue base for the country.

    Emefiele said  agric financing is the way forward for the economy, pointing out that the CBN has, as part  of  its  developmental  role and in collaboration with the Federal Government of Nigeria, represented by the Federal    Ministry of Agriculture    and    Rural Development, established  the  CACS for  promoting local commercial agricultural enterprises, which is a sub–component of the Federal Government’ Commercial Agriculture Development  Programme (CADP).

     

    What the banks are doing

    First Bank of Nigeria, Heritage Bank Limited, First City Monument Bank, Sterling Bank, Diamond Bank and United Bank for Africa have also renewed their pledge to intensify support to the agricultural sector and its value chain, including lending more to the sub-sector.

    The lenders insisted that four basic commodities that are consumed by Nigerians – rice, wheat, fish and sugar jointly account for a significant amount of the country’s annual import bill.

    They expressed their conviction that the nation has the capacity to produce these consumables in the required amounts to meet  domestic consumption needs. With its attendant impact on Gross Domestic Product (GDP) and job creation, agriculture remains a critical focus sector of the financial system.

    The banks said they remained focused on being strategic partners to the government and other stakeholders in the agricultural sector to ensure food sufficiency, employment and revenue generation.

    Heritage Bank Plc has continually made funds available to both individuals and corporate organisations in their efforts to increase agricultural output.

    Its Managing Director/CEO, Ifie Sekibo, said agriculture financing remains a priority for the lender, stating that in the last five years of its operation, the bank has continued to support Federal Government’s economic diversification agenda, especially in funding agricultural projects and its value-chains.

    “Within its period of operation, Heritage Bank is being positioned into a bigger and stronger financial institution that is placed to play a big role in the much-envisaged transformation of the nation’s financial sector in line with the country’s stature as one of Africa’s largest economy. But, the country has a great challenge and a great opportunity in its hands- one of feeding its citizens and driving the nation’s economy. These entails harnessing of the energy and skills of the young adults in the production, processing and marketing of food for the teeming Nigerian population,” Sekibo said.

    “Nigerian youths will find opportunities as entrepreneurs, service providers and paid workers in a sector that is becoming a beacon of hope for the economy, which is the agricultural sector.

    Sekibo said Heritage Bank has not only encouraged both government, corporate and individuals (including young people to embrace optimal productivity and greatness in this sector), it has taken the lead in the drive to support them in the attainment of noble agricultural virtues by funding various agricultural projects in several states in the country, especially in Oyo, Kaduna and Zamfara states”.

    The Managing Director/CEO, First Bank of Nigeria Limited and Subsidiaries, Adesola Adeduntan said the bank has over the years, committed to nation building, whilst promoting agric-business and the development of the economy in Nigeria. He spoke at the second consecutive edition of the First Bank Agric Expo  held in Lagos.

    The bank chief said the lender was committed to  increasingly collaborate with public and private sector partners to fully restore the prime role of the agricultural sector as the mainstay of the economy.

    “Over 124 years ago, our bank commenced operations with a major strategic focus on financing agriculture development as well as enabling farmers and agro-businesses. I am pleased to note that agricultural financing across all value chains remains a core part of our business today.”

    As a result of the Agric Expo, the First Bank’s Agric portfolio recorded a growth of N11.65 billion as a direct impact.

     

    More views  from stakeholders

    Sekibo said the lender would remain focused in supporting agribusiness through financing the purchase of modern technology, as it would bring about transformative development to the economy in general.

    He said the bank would support the drive for cash crop commodities to boost Nigeria’s foreign exchange earnings.

    For its enormous support to this sector, Heritage Bank Plc, Nigeria’s Most Innovative Banking Service Provider in 2017 was bestowed with the inaugural Nigeria Sustainable Banking Award convened by the CBN “For Sustainable Transaction of The Year in Agriculture” among other laurels won.

    In a bid to further support the real sector and unlock food potentials, Heritage Bank Plc in collaboration with CBN provided N2 billion long term facility under the Commercial Agriculture Credit Scheme (CACS) to Triton Aqua Africa Ltd (TAAL).(

    TAAL known as Triton Farm accessed the CACS through Heritage Bank, which was used to set up aquaculture businesses; nursery/hatchery to produce fingerlings and brood stock in Ikeja and earthen ponds for catfish and Tilapia in Asejire, Iwo and Gambari towns in Oyo State.

    The company’s strategy is to embrace backward integration through production of fish locally and reduce its importation of frozen fish and as well assist small scale farms by producing quality breed fingerlings.

    Under the arrangement, TAAL will also help small-scale farms increase their fish production by making fingerlings available to them. In the short term, the loan is expected to help Triton double its current production capacity of 25,000 metric tonnes with a projection to scale it up to 100,000 metric tonnes in five years.

    The bank also has thrown its weight behind Globus Resources Limited, a subsidiary of Triton Group, to flag off the second phase of afforestation programme in Oyo State.

    Statistics showed that Nigeria’s current demand capacity for fish is estimated at 2.7 million metric tons and the country currently produces 800,000 metric tons. Triton is now producing 25,000 metric tons and with them on board, about 25,000 metric tons capacity will be added to our current production, the company’s projection is to reach 100,000 metric tons in five years.

    Heritage Bank has also supported thousands of small holder farms in Kaduna and Zamfara states to benefit from the bank’s financial support for rice and soya beans production under the Central Bank of Nigeria’s Anchor Borrowers Programme (ABP).

    Sekibo said the bank’s drive to support rice production is borne out of the conviction that agribusiness is profitable and act of patriotism to achieve food security and sufficiency in the country.

    He hints that Heritage Bank is effectively tackling the bottlenecks since it has long identified the opportunities in agribusiness before the collapse of crude oil prices through its various programmes, which will contribute to the projection for year 2020 in the production of 7.7million metric tons of milled rice or 10.8million metric tons of paddy rice at milling recovery ratio of 62 per cent.

    For the ABP, the bank provides on-lending funding to aggregated farmers to grow various produce that will serve as raw materials to the processors, thereby ensuring market linkages and access to market as well as reduce importation and conserve Nigeria’s external reserves.

    In 2016, the sums of N54.8 million  and N248.4 million were sourced from CBN and disbursed as loans to 185 rice farmers and 414 soya beans farmers respectively in Kaduna State.

    In 2016, N37.9 million was disbursed to 259 rice farmers via 11 cooperatives in Zamfara State.

     

    More agric-funded

    projects unveiled

    Heritage Bank Plc signed a N232 million pilot phase of out-growers agreement with Biase Plantations Limited (BPL), and its joint venture partner, PZ Wilmar Limited to produce best-in-class palm oil, using the ABP model. The first tranche of N113 million has been received and disbursed accordingly. The pilot scheme covers 45 farmers, grouped into four co-operative societies with a land mass of 150 hectares, and the funds to be administered is from BPL.

    The youths are also encouraged through the bank’s partnership with CBN under the Youth Innovative Entrepreneurship Development Program (YIEDP) to start young and create wealth, adding that from available statistics, 80 per cent of applicants under the youth empowerment programme choose agriculture as the preferred sector.

    Undeniably, most of the ventures in the agriculture sector fall within the Micro, Small and Medium Scale Enterprises (MSME) sectors of the economy, which Heritage Bank in close collaboration with CBN has been championing.

     

     

  • Is CBN agribusiness loan a Greek gift?

    Mixed reactions have trailed the Central Bank of Nigeria (CBN) new policy regime which pegs interest rate for agriculture and manufacturing sector at 9 per cent payable in seven years with a two years moratorium at maximum of N10 billion.
    Daniel Adeleye in this report examines the issues

    To say that the recent announcement by the Central Bank of Nigeria (CBN) which pegged interest rate at nine per cent for agribusiness and manufacturing sectors for long-term borrowing as much as N10billion was cheery news indeed is simply stating the obvious.

    What CBN policy portends for economy

    Stakeholders in the agriculture, manufacturing and other sectors consider the apex bank’s new credit policy called Guidelines for Accessing Real Sector Support Facility (RSSF) through CRR and Corporate Bonds as growth and employment stimulating, stressing that it will bode well for the economy ultimately.

    According to one of the stakeholders in the sector, this new credit policy, no doubt marks a big departure from the excruciating interest rate regime of 25-30 per cent that has been over the years blaming for enterprises in Nigeria.

    While applauding the new scheme by the CBN and Committee of Bankers for pegging interest rate to farmers at nine percent, the Minister of Agriculture and Rural Development, Chief Audu Ogbeh during an interactive session in Abuja, described the policy as a first major step Nigeria was taking to reverse the ‘horrible damage’ done to Africa through Structural Adjustment Programme in the mid 1980s.

    Ogbeh said the development will assist the agricultural sector create jobs and promote food security through loans disbursement to rural women and youths at the grass roots.

    Speaking further, the minister believed that the tenure for the loan is good, seven years tenure, two years moratorium and maximum of N10 billion per borrower but appealed to the borrowers to ensure whatever was being borrowed are repaid as financial institutions are profit making organisations.

    “We have to grow our agriculture and to grow agriculture, you need cheaper credits, 18, 25 and 35 percent interest rates are for traders, not producers and I am glad the central bank has recognised this. I have complained about this since 1986.

    In a related development, while speaking on the policy in Abuja, the CBN acting Director, Corporate Communications, Isaac Okoroafor said the new directive aimed to increase the flow of credit to the real sector, agriculture and manufacturing.

    Okoroafor added that Deposit Money Banks (DMBs) would henceforth be incentivised to direct affordable, long-term bank credit to the manufacturing, agriculture, as well as other sectors considered by the Bank as employment and growth stimulating.

    Cautious optimism over CBN agribusiness policy

    Expectedly, a lot of respondents who spoke with our correspondents have expressed cautious optimism with the new policy regime, as they are not convinced that government’s real intentions may be implemented to the letter judging by past experiences.

    In his own assertion, an economist and senior lecturer, Department of Economics, Pan-Atlantic University, Prof. Adi Bongo described the policy as ‘too little too late.”

    He said though it’s understandable that the policy is coming late as a result of government facing challenges spiraling inflation and due to insolvency issues.

    The economist however tasked the federal government on proper implementation of the scheme, stressing that the targeted beneficiaries get the money rather than using same for bait to win elections in 2019.

    The erudite scholar described the manufacturing and agricultural sector as the most critical sector in a nation that needs more attention to grow economy.

    “Agriculture is the only sector that survives recession. But again being the sectors that employ greater percentage of Nigerians, everybody knows that sector is the sector that has the ability to help the economy grow again and also cater for a large majority household. So those are the two critical sectors, manufacturing and agriculture. We don’t know if the loan will get to the people the money is meant for but if it does it would boost productivity there is no doubt about it. It is a good development but some of us think that it should have come earlier.”

    Also speaking with The Nation on the policy, a renowned economist and professor of International Economic Relations at the Covenant University, Prof. Jonathan Aremu described the policy as a good development.

    Aremu who left CBN in 1992 as acting Assistant Director of Research said the CBN has introduced such policy before the Structural Adjustment Policy of 1986 and was successful.

    The financial expert urged the CBN to ensure that Deposit Money Banks (DMBs) disbursed the money for the purpose it is meant for.

    “I believe it’s a very good development and CBN must make sure that the money is directed to the national activity, the money earmarked for national interest, it should be monitored and that’s what the CBN should do. They shouldn’t just give the money to the banks,” he said.

    Reacting to the feelers that the loan would be meant for people that have godfathers or may turn to a political thing, Prof. Aremu flayed the statement by saying the CBN will not dabble into such arrangement.

    “I don’t believe that CBN will go to such arrangement that you have to be a party man or have a godfather to access their loan. If APC did not win election in 2019 and the money has not been paid back, what would now be the gain of CBN? So the money is not about politics and I won’t like to drag CBN to politics. I don’t believe that,” he submitted.

    Applauding the nine per cent interest, Policy of the CBN, an Oyo State-based poultry farmer who asked not to be named, said the policy is commendable but he however called on the CBN for prompt monitoring of the banks to guarantee effective implementation.

    According to the poultry farmer, if the money is properly controlled by the CBN, it would help improve the production of agricultural commodities that will guarantee food security in Nigeria.

    While noting that this was not the first time the CBN was directing commercial banks to give money to agricultural sector, he however lamented more often than not commercial banks don’t usually comply with such directive from the apex bank.

    He said some of the commercial banks in Nigeria assessed agriculture as very risky, adding that it should not be business as usual.

    Unpleasant stories of past agribusiness loan beneficiaries

    Sharing his own experience with The Nation, the Managing Director of Adejumo Farms Lagos, said no matter what, he would never take loan from commercial banks again to finance his farm business.

    Going down memory lane, Adejumo recalled that in 2005 he took a loan from some commercial banks in Nigeria (names withheld), but literally had his fingers burnt.

    “I recalled that some years ago, the CBN did a policy and the interest rate was also 9 per cent. But the commercial banks gave out at 19-23 per cent and after the payment of the loan, they will now pay you the difference which may be very difficult to calculate and you as a borrower may also default at the end,” he recounted.

    Adejumo who noted that he had the unsavory experience with the then Intercontinental Bank, now Access Bank lamented that the loan is still paying back till date.

    “It was agric loan and they said they will give me at 9 per cent. They asked me to meet a particular target in my turnover and if I don’t meet up with that target they will charge another amount into my account. But it wasn’t easy for me at the end,” he explained.

    Speaking on whether the loan may turn out to be a political jamboree or a plot by the current administration to stay in power beyond 2019, Adejumo flayed the statement, stressing that commercial banks are the stumbling blocks frustrating CBN good intentions.

    The experienced farmer however expressed pessimistic over the current CBN loan policy, saying except the loan is disbursed through the Bank of Industry or Bank of Agriculture, it may be difficult to access them from the commercial banks.

    “Commercial banks are the problems, they are not sincere. I’ve made up my mind that I will never collect loans from any Nigerian bank again, no matter the situation.”

    “But through commercial banks, you need to have a long spoon to deal with them. There is no amount of encouragement anybody gives me, I will rather go to my cooperative to get money than to go to the commercial banks to get loan,” he submitted.

    Also speaking, a Lagos-based crop and livestock farmer, Adekunle Ayandele, said he attempted to get a loan from the Bank of Agriculture in 2017 but later backed off when the bureaucracy became almost unbearable for him.

    According to him, giving loan to farmers at 9 per cent with two years moratorium depends on the minimum and maximum given out to people.

    Expressing doubt on the policy, Ayandele said the farmers and manufacturers who do not have politician as godfathers may not be able to access the loan.

    Echoing the same sentiments with Adejumo, he said Bank of Industry or Bank of Agriculture is the proper channel to give loan to farmers and manufacturers and not commercial banks that would muffle the process.

    “Although I have not borrowed money from any CBN programme before but in 2017, I attempted to get loan from Bank of Agriculture. When I got there to make enquiry, the first bottleneck was that I was going to open an account with them. The interest rate then was not a single digit, it was like 12 per cent but later brought down to a single digit. Apart from opening account with them, they asked for a guarantor with a certain criteria. They asked for the farm document, the registration and all that. When I saw that the requirements were getting too high I backed off from the loan.

    “The fact is no continuity in such programme, if a government leaves, another one coming will have its own plan. Everything in Nigeria is always politically motivated no matter what,” he expressed.

    Banks await CBN directive on agribusiness loan

    Almost three weeks after the CBN announced the new policy regime on agribusiness loan, the commercial banks which are supposed to be the implementing partners are yet to be properly briefed.

    When our correspondent visited some of the banks, they all said they were still awaiting further directives from the apex bank.

    A source who spoke with our correspondent at First Bank, Diamond Bank, GTB, Access Bank amongst others said the CBN was yet to officially communicate to them.

    However the sources were unanimous in saying that the conditions would not be different from the past requirements which include: opening account with minimum of N250, 000 to get N2.5 million.

    Enquiries rebuffed

    When our correspondent sought to speak with the CBN acting Director, Corporate Communication, Isaac Okoroafor on the outcome of his findings, especially to get him to react to the misgivings being expressed by prospective beneficiaries, he simply fobbed him off with untenable excuses.

    “Let me tell you, I cannot speak with you on phone because I don’t know you. And the way you sound, you may misquote me. Secondly there are three people from The Nation who cover CBN, get in touch with any of those guys, let them call me or you put down your questions I will answer you,” he deadpanned.

  • NYSC, Anambra to set up agribusiness

    The National Youths Service Corps (NYSC) is partnering the Anambra State Government to establish agribusiness ventures.

    Its Coordinator, Mr. Kehinde Aremu, in an interview in Awka, the state capital, said the agribusiness venture would start with poultry before expanding to aquaculture and other aspects, such as livestock and crop production.

    “The NYSC agribusiness venture will begin with poultry because Anambra State is already doing well with the establishment of the largest poultry project in Africa, realising that market for poultry products is large.

    “There is huge demand for protein and eggs; so, venturing into this sector will even boost the home-grown school feeding programme of the Federal Government.’’

    The coordinator said interested NYSC members and youths who enrolled into the programme would gain practical experiences in animal husbandry as they would be adequately trained on ways to make agriculture a profitable business.

    He explained that those to benefit would also easily access loans to finance their ventures as NYSC had a financing Memorandum of Understanding (MoU) with the Bank of Industry, Central Bank of Nigeria(CBN) and Bank of Agriculture (BoA) on zero per cent interest rate.

    Aremu, who said he participated in many agro workshops within and outside the country, noted that his office was waiting for action by the technical committee set up by the state Ministry of Agriculture for the take-off on the venture.

    He said: “We are waiting for a more visible action from the Anambra State government to enable the agribusiness venture to fully take-off.

    “Everything needed to drive the venture had been put in place, realising that one of the best ways to take youths out of the streets is to introduce them to agriculture as both wealth and job creation windows.’’

    He noted that what before now had discouraged Nigerians from embarking on agriculture was convincing them to do it with machete and hoe after they had gone to school.

    Aremu said studies had shown that in other countries, agriculture ran the economy and prospered the people, adding that such practice could be replicated in the country.

    According to him, agriculture is one of the cardinal activities of the NYSC as the corps had farm settlements in Kwali (FCT), Ezillo (Ebonyi), and Bauchi.

    “In Anambra we are looking in that direction because the state has agriculture as a cardinal policy and NYSC wants to introduce the youths and corps members to agriculture in a symbiotic way.’’

    Aremu observed that because land was a challenge for large-scale farming in the state most of the youths went into trading.

    He,  however, added that if the youth were trained on modern agriculture, which did not require large expanse of land, they could make more prospects.

    “Under the skill Acquisition and Entrepreneurship Development (SAED), I was in China alongside other Africans in 2017, where we studied how China feeds its large population in spite of inclement weather and other natural factors.

    “The take home is that you don’t need much land to make it in agriculture this time, and your collar doesn’t necessarily have to be black; all you need is good knowledge of the science of farming,’’ he said.

  • Agribusiness: Africa’s untapped potential

    Sir: For decades, farming in Africa was viewed by many as a subsistence activity whose loftiest goal was food security for individual households. It was never seen as a business for wealth creation. That is why the performance of the sector has historically been low. Modern farm inputs, including improved seeds and mechanization, are severely limited. Infrastructure also is in an appalling condition.

    Though producing food on small family farms has always been at the heart of the African experience, now we are embracing the agriculture of our future. Agriculture is beginning to enrich Africa with a series of compelling economic opportunities along production chain that can be tapped across the continent.

    The family farm can now be the source and hub for a new generation of young entrepreneurs delivering innovations across the food system. But agricultural productivity in Africa still remains far from developed by world standards. Treating agriculture as a business will entail establishing a viable agricultural sector through massive investment that addresses the challenges of infrastructure and aligns agriculture with industry, thus create wealth throughout Africa and leverage the continent’s existing assets to catalyze economic transformation.

    Vital infrastructure including electricity, water, roads and rail to transport finished agricultural and processed foods are critical for the transformation of the agricultural sector of Africa, mainly based in rural areas. This is because lack of these crucial infrastructures skyrocket the cost of doing business and has discouraged food manufacturing companies from getting established in rural areas. Governments should provide fiscal infrastructure incentives for food manufacturing companies to move into rural areas, closer to zones of production than consumption. This can be achieved by developing agro-industrial zones and staple crop processing zones in rural areas.

    Equally important is the need for African governments to reach out to the private sector and civil society to forge partnerships that can benefit farmers in Africa especially in the areas of seed improvement, fertilizer production, and machinery procurement. This will maximize output while equally spurring inclusive growth and development.

    More than two-thirds of Africans rely on agriculture for a living. Yet, because of the lack of complete information:  farmers, intermediaries, and buyers are unable to effectively collaborate in the fragmented market. Tackling this challenge will be by providing an integrated platform that uses various Information and Communication Technology (ICT) gadgets including mobile phones to provide stakeholders in agriculture with an end-to-end solution to procuring inputs, linking producers to buyers, and finalizing credit and payments thereby creating an open market for business to thrive. Currently, ICT is no longer a luxury in Africa, as Africans have begun to leverage new technologies and innovations in their daily lives.

    All of the measures above that improve the sector’s profitability will make it a more investment-worthy client in the eyes of financial institutions. As agriculture is subjected to high systemic risks, engaging with the sector has traditionally been challenging for financial institutions, which are unable to adequately conceptualize and assess risk and, therefore, unable to develop sustainable financial products for actors in the agricultural value chain. According to a World Bank report in 2009, only about 10% of the total portfolio of commercial banks in Africa goes to agriculture, including agro-industries, and rarely extended are loans to smallholders.

    Consequently, agricultural clients, notably smallholders, lack access to adequate financial services living them dependent on meager savings and informal sources of credit and therefore face severe growth constraints.  As can be seen under its “Feed Africa” strategy, the African Development Bank will invest $24 billion in agriculture and agribusiness over the next ten years, amounting to 400% increase in financing, from the current levels of $600 million per year.

    Nevertheless, a growing number of farmers are turning around their fortunes by embracing improved seeds and inputs, value addition and plugging into global value chains. Farmers are increasingly viewing farming as a business and not just a way to subsist, agribusiness is also gaining momentum.

    African countries also need to view agriculture from an entrepreneurial perspective. They need to proactively identify and create markets for fresh produce and processed food products. If this is done, Africa will have taken its rightful place as a global powerhouse in food production. It could well also be feeding a population expected to exceed 2 billion by 2050, mostly youths that might well turn agriculture into an entrepreneurial endeavor.

     

    • Adam Naziru Ahmed, Department of Agriculture, University of Jos.