After oil, agriculture is the principal driver of Nigeria’s economy. The sector contributes about 30 per cent of the country’s total GDP, and it accounted for 34.66 per cent of employment in 2020. However, the situation of the agricultural sector is a shadow of its past. There is often a recount by senior citizens of her historical exportation prowess in the 80’s through 90’s. Now, this export strength has dwindled. Between 2016 and 2019, Nigeria’s cumulative agricultural imports stood at N3.35 trillion, four times higher than the agricultural export of N803 billion within the same period.
In Q3 of 2021, agricultural goods imports stood at N789.1 billion while agricultural goods exports stood at N79.4 billion. This huge gap isn’t necessarily because there was no supply, but there are hindrances in the distribution chain. Timi Oke’s AgroEknor is helping to put an end to these hindrances. Focused on technology-driven value-chain solutions, AgroEknor operates by sourcing, refining, and exporting agricultural products to global clients spanning Europe, Asia, North, and South American markets.
In this interview, Timi Oke talks about the agricultural exportation sphere and how his business is adopting technology to improve productivity.
What influenced you to start AgroEknor?
I launched AgroEknor in 2013. I was working in retail banking at the time, and I noticed a gap in the demand and supply of superfoods in Africa. The issue wasn’t a lack of supply; rather, problems in the distribution chain prevented people from getting what they needed. We felt we could make an impact in the space and it’s been nine years of doing that.
How does AgroEknor work; from sourcing products to their final sale?
At the moment, we export about 2,000 tonnes of agricultural produce. The volume got lower because of the pandemic. About 35 per cent of that volume is sourced from AgroEknor control demand. We invest in farmers and give them access to farm inputs, tech support, fertilizer, seed support, and credit capital. When the harvest is ready, we get it from the farmers, transport it to Kano and process it according to the standard specifications of the clients. After that, we convey it from the processing facility in Kano to Lagos port or the Onne port in Port Harcourt. Currently, we sell to about 30 different clients in eight countries. Our clients range from people in the food production industry to the pharmaceutical industry, and recently, the cosmetic industry.
Dried hibiscus, ginger, and sesame seed are your chief export products. Why these products?
For us, it was opportunity recognition. We wanted to be intentionally impactful, so we looked at communities that needed the sort of impact we offer. We looked at farming communities that needed inclusive partnerships. We realized that superfoods did not have a lot of attention. Unlike the palm oil, cocoa, cashew, or maize supply chain that has been operational for a long time, hibiscus, ginger, and sesame seed still had virgin supply chains. There were a lot of processing gaps that we knew we could bridge with quality investment. For us, it was about determining which agricultural product supply chain might unlock the most value and provide the best return for ourselves and our investors.
What are the challenges you encounter in the business?
For many players in the agricultural space in Nigeria or Africa, infrastructure is a challenge. The infrastructure in this space is not where we want it to be; it is still a work in progress. One other complication we faced initially was quality control. We cannot overlook quality control when we export to our international clients. We realised that many agricultural products coming out of Nigeria were of poor quality. And because the infrastructure for quality control was lacking, we were at the lower end of the pricing scale.
Because of the agricultural products we exported, a lack of storage space was also an issue. We needed to store these products in a temperature-controlled environment. We discovered that poor storage wastes between 25 and 36 per cent of the value chain. So we needed to solve that problem promptly.
Another challenge was yield. If you have one hectare of hibiscus, you should expect about 1.5 tonnes as your yield. But because of farming gaps and practices in the value chain, the yield was significantly less than it ought to be. Our value proposition is to look at those challenges and identify what we could do to overcome them and optimize the value chain.
Nigeria used to be a major exporter of a variety of agricultural products. What is the cause of the downturn, and how can we reverse it?
The issues outlined earlier are to blame for the downturn. Smallholder farmers cultivate approximately 80 per cent of what we produce. For them to commit to planting and farming, they must be assured of financial security. At every level of the value chain, there are challenges of access to finance, resource allocation, land allocation, etc. We are thankful that there have been international efforts to invest in the value chain over the years. You see companies like Nexim development bank adopting backward integration. We have always been keen on backward integration that is impact-driven.
On the export side, there is so much congestion in Apapa port. So the time between when you get your products to the port and when it leaves can be tedious. I anticipate that, now that the roads are being repaired and the port congestion is reducing, engagement in the value chain will improve in the coming months.
What is the future of tech in Africa’s agricultural industry?
The agritech ecosystem has grown over the years, and it has been great to see. In the last few years, the agricultural sector has embraced digital transformation, and what that has done is overcome some traditional challenges in the space, which I mentioned earlier. For example, over the last 3-4 years, AgroEknor has implemented farm management software in the form of precision farming. That has changed the way hibiscus is being farmed and increased our yield. It has also increased the level of traceability. When you take agricultural products to the global market, they want to see end-to-end traceability. They want to be able to scan a barcode that tells them the origin of a product and the chemicals used to fumigate it. We were able to do things like that through technology.
On our processing site for hibiscus flowers, we implement sensor-assisted processing equipment. That is for quality and moisture control, and it has increased the general acceptance of our products in the global market. When your products are generally acceptable, clients pay more. Technology has generated more income for exporters, processors, and even farmers. Research has shown that if we continue to implement tech successfully at this momentum in the next ten years, the agriculture industry in Africa could tap about 500 billion in additional value. Exporters, processors, and even smallholder traditional farmers have embraced digital transformation, and we are not ready to slow down. We work with over 5,000 farmers, and some of the software we are trying to implement monitors yield, provides field analysis, weather reports, and even climate reports. Technology is making life easier for farmers.
What aspects of agriculture would you like to see redefined by technology on the continent?
I want it to start with the smallholder farmer. Farmers need access to sensor location, weather forecasts, and reports on their devices to better understand harvest. Cultivation is made simpler with these reports and analyses.
For processing, agric technology helps eliminate waste. About 35 per cent of harvested produce go to waste. Technology can help optimise the value chain to reduce wastage. It often takes about seven days to process 12 tonnes of hibiscus. With the right technology, it will take 48 hours. That is the advantage of integrating the right technology into the value chain.
How would you describe your impact since inception?
Impact since inception has been laudable. We have empowered over 5,000 farmers. We have a lot of women and youth in the hibiscus value chain, in addition to a lot of smallholder farmers. We’ve also been able to provide smallholder farmers with credit capital. Our investment in the space creates job opportunities for over 1,500 women and youths.
We contributed to the GDP in multiple ways through our export earnings. Our operations have a major influence on communities in Jigawa, Kano, Katsina, and Nasarrawa, where we operate. We also give farmers land to cultivate other crops in addition to hibiscus. So that they can feed their families and improve their general well-being during off-seasons.
How would you describe the attitude of youth to agriculture nowadays?
It has been fantastic, and I think that is why the momentum cannot stop. When we have town hall meetings with farmers and the youths find out the founders of AgroEknors are in their early 30s, they get inspired. I work with and mentor some of my peers. They can see what is happening, and it motivates them. With companies like ours and a few others bringing both public and private finance into the field, there has been a lot of youthful enthusiasm in agriculture recently. Access to credit improves, and farming becomes more enticing to youngsters.
What are your prospects for the future?
We have begun the process of improving the agricultural value chain. However, we recognize that there is more work to be done in the coming years. We aim to extend our worldwide footprint in Asia, Europe, and North America, and we want to keep investing in an integrated back-end process that connects us to farmers. We want to be able to scale across more products and countries with our current technology. We are already a leading hibiscus supplier in Nigeria, with operations in nearly all the states and regions in the country, but we want to expand. We want to train more people and increase our resource allocation. We wanted to be intentionally impactful and resiliently innovative, so we are holding ourselves accountable by launching sustainable innovation that enables increased productivity and profitability for ourselves, smallholder farmers, and other actors across the value chain.
Interview by Adekunle Agbetiloye