For two days in the federal capital city of Abuja, Nigeria industry players including investors, agriculture practitioners, agribusiness owners and policymakers converged to discuss ways to improve the Agric sector in the second edition of Sterling Bank Plc’s Agriculture Summit. The event took place from 5th-6th September at Transcorp Hilton, Abuja.
About 23 percent of sub-Saharan Africa’s GDP comes from agriculture. More than 60 percent of the region’s population are smallholder farmers. Yet, Africa’s full agricultural potential remains untapped owing to various issues ranging from a lack of investment to poor policy implementation. Hence the significance of the summit.
In line with the theme of the summit, Agriculture: Your piece of the trillion-dollar economy, industry players identified issues, analyzed trends, and proffered practical solutions that would transform Africa’s Agric sector if acted on.
The summit kicked off with a welcome address by Asue Ighodalo, Chairman, Sterling Bank and Abubakar Suleiman, CEO, Sterling Bank; both highlighting the bank’s commitment and impact in the Agricultural sector while commenting on the necessity of the summit. “There’s the need for the private sector to play an important role in driving the economy … Sterling Bank is dedicated to committing 10 percent of her loan facility to Agriculture,” Ighodalo said.
Highlights – Challenges, prospects, opportunities and solutions
Panellists Yewande Sadiku, CEO NIPC; Steen F Hadsbjerg, Africa Regional Vice President Arla Foods; Olusegun Falade, GM Flour Mills Nigeria; Siddharth Ramaswamy, Supply Chain Manager Unilever; Caleb Usoh, Deputy Managing Director OCP Africa; and Tunde Okoya, VP Organization OTACCWA, addressed the challenges, prospects and opportunities of harnessing the potential of a trillion-dollar Agric economy and suggested ways to tackle them. Some of which include providing infrastructure, improving the investment climate and access to finance, and creating an enabling environment by putting predictable fiscal policies in place. Corporate organizations are also advised to create strategic partnerships with investors and out-grower schemes with smallholder farmers.
Africa has the youngest population in the world with near 80 percent of Africans being younger than 35. Reports say the continent’s youth population will more than double by 2055, this could impact the continent positively or negatively. The youth demography presents an opportunity for economic expansion across the continent, and agriculture is one sector with ample opportunities across its value chain for youth participation and human capital investment.
The widespread notion that Africa’s youths are uninterested in being practitioners of agriculture is not entirely true and is being dispelled by the increasing participation of youths in Africa’s Agric sector. However, the rate of participation could and should be improved by making the sector attractive, derisking it, providing investment opportunities, affordable loan facilities, and creating strategic partnerships with financial institutions.
“Access to land and finance, unfavourable policies, affordability and availability of mechanization are some of the challenges that youths face in the Agric sector,” Evelyn Ohamwusi, Youth Coordinator, ENABLE TAAT, IITA said during a panel session for inclusivity in Agribusiness. “Agriculture is a risky business, hence need for insurance and adequate training for young entrepreneurs. Mechanization would also attract and encourage youth participation in the sector,” she added.
In the same session, Hajia Salamatu Garba, Founder, WOFAN, criticized the exclusion of women from conversations that determine agricultural policies and the absence of conversations around the middlemen in the packaging/processing micro-industry of the Agricultural sector, half of whom are women. “Where have we kept these middlemen[women]?” she asked. But besides making up half the population of the packaging/processing micro-industry, women produce 70 percent of Africa’s food, according to the World Economic Forum.
Funding and Investment
One of the major challenges in the Agric sector is access to finance; either as capital to start up, or an investment to scale. In two separate panel sessions, players including Richard Pelrine of IFAD; Oluremi Bodunrin of Sahel Capital; Mudashiru Olaitan, Director Development Finance CBN; Onyeka Akumah of Farm Crowdy; Obi Ozor of Kobo 360; Thomas Essiel, Sec-Gen AFRACA; Ibukun Sorinola of Verod Capital and representatives of Heritage Bank, Union Bank, FCMB, Wema Bank, Unity Bank and USAID addressed how farmers and agribusiness owners can position themselves to attract investment and funding, and the role of financial institutions in enabling the agricultural value chain.
“In Africa, many entrepreneurs get carried away with too many ideas, trying to solve too many problems at a time with their platform. This is one of the biggest challenges to scaling; when an investor comes and there isn’t one structured thing to focus on, the investor leaves,” Onyeka Akumah said. “You have to streamline your effort to what works for you to allow you scale as an Agric entrepreneur. You cannot be an expert by doing so many things. And you cannot scale on something you are not an expert on.”
According to Shola Agolu, Head of Agric Finance, Unity Bank, the Agric sector needs a different financial framework; banks need a separate risk assessment policy framework for agricultural loans. Beyond providing finance, financial institutions need to bolster growth in agriculture by educating practitioners. “Capacity training and digitalisation are essential for the growth of the agricultural sector. Finance is an enabler, it is the catalyst, but it will not solve the problem,” Olawale Olarenwaju, Head of Agric Finance, Union Bank said.
In another session, actors in the livestock industry, Celestine Ayok, Founder, Spring Diaries; Ibrahim Maigari, CEO Livestock 247; Prof. Clarence Lakpini of NAPRI; Dr. David Shamaki, CEO NVRI; Andrew Kwasari, NLTP; Dr. Tunde Adegoke Amole of ILRI; and Roy Sheyin Shikari, MD Integrated Dairies, identified challenges in the livestock value chain that must be addressed to improve growth in the sector. They include disease outbreak due to poor veterinary services, absence of cattle registration and identification systems, the low genetic potential of indigenous cattle, poor extension services delivery from agricultural MDAs, and incoherent policy implementation.
Beyond the many insightful and informative panel sessions and presentations, the summit also included a pitch and investment session called the Deal Room where small scale agripreneurs had the opportunity to meet with potential investors individually. Some of the investors present at the Deal Room included the Bank of Industry, the Nigeria Agribusiness Register, venture capital firm, Investment One, GIZ German cooperation, JAIZ Bank, and international non-profit organization, CNFA. On its part, Sterling Bank provided N100 million ‘deal room funding’ to encourage these small scale agribusinesses.
In an interview, Abubakar Suleiman stated that Sterling Bank Plc. has a deliberate policy to encourage lending in the agricultural sector. Over the last five years, the bank has loaned over N55 billion to the sector. This year, the bank set aside a minimum of N10 billion to lend to farmers, and it is willing to do more depending on the quality of proposals received. “It is difficult to operate in a country and ignore a sector like agriculture that accounts for so much employment and add so much output to the country’s gross domestic product,” Suleiman said. “At the end of the day, all the country’s development starts with agriculture.”
About Agriculture Summit Africa
The Agriculture Summit Africa by Sterling Bank Plc is an annual meeting of all actors in agriculture for multidisciplinary deliberations aimed at driving growth in the sector. The summit is also focused on unveiling current agricultural trends, innovations, and opportunities for investment and participation in Africa while showcasing the sector’s transformation trajectory.