2020 was a challenging year for the world; the pandemic shut down markets, jobs were lost, and it took a lot for most businesses to stay on their feet but this is not about 2020. This is about the miracle that is the agricultural sector in Nigeria. A labor-intensive sector that generated a total GDP contribution of 80.7 billion dollars even in the midst of a lockdown. Constituting about 22% of the GDP for that year alone; its contribution becomes even more amazing when you consider the percentage distribution of farmers by scale in Nigeria. As of 2019, it was speculated that more than 80% of farmers in Nigeria were small-holder farmers. This means that despite operating at a much smaller scale, these farmers contributed more than 20% to the national GDP.
It is easy to get confused when throwing random stats around but think of the explanation above as a sector finding wings to fly when the system was rigged to keep it down. A notable example of this is how the agricultural sector was expected to receive ~ 10% allocation status in the national budget of 2020 in line with the Maputo Declaration but rather received a 1.8% allocation in the 2020 budget, a far cry from what was necessary to aid agricultural development in the country. It should be no surprise that this continuous allocation deficit coupled with insecurity, broken supply chains, and lack of access to finance, has put the agricultural sector in Nigeria on its last legs.
An important fact that helps us understand the scale of this problem, is how in 2019 alone Nigeria’s agricultural trade deficit widened, with imports exceeding exports by N689.7 billion naira with a majority of these imports being food (NBS, PwC). This means that we spent more importing food than we made from exporting agricultural products. Solving problems of this scale is probably more dependent on better policies than it is on technological innovation, but we cannot sit on our hands and wait for such policies; we would have to create solutions that not only work but also help change the narrative.
It is important to note that while innovation is often described as the creation of new paths or perspectives, its essence still comes from understanding familiar problems. As a tech innovator, your solution must fit into a level within the hierarchy of the variety of problems that plague the agricultural sector. Understanding the origin of the problem you are trying to solve and the resources required to solve it will help you make better decisions in your pursuit of innovation.
So, If you are a change maker passionate about making the agricultural sector better here are 4 problems in the agricultural sector that you can build your solutions around:
1 - Lack of access to finance
Although the Nigerian government has provided several facilities through the Central Bank of Nigeria (CBN) to help provide small-scale farmers with adequate financing, the farming sector still lacks adequate access to finance. This problem is usually a mix of a lack of enough data to judge credit risk for access to financing, poor fiscal policies, and a lack of financial inclusion in proposed financing solutions. In building a solution for this problem, you must consider your market demographic and build for inclusion. It is a tough problem to tackle but can be very rewarding if done well and at a scale not only in Nigeria but across Africa.
2 - Shortages of Agricultural inputs
Over the past few years, a lack of agricultural inputs such as seedlings, fertilizers, and even herbicides has caused low yields on farms in Nigeria. This combined with a lack of access to tractors and farm mechanization has affected farm productivity and yield rates drastically because apart from crop inputs, these tools are necessary for processes that range from irrigation to harvesting. As an innovator, fixing this problem would require understanding the supply chain of these inputs and the points of dysfunction that cause the shortage. It is a multilayered problem that once fixed can improve not just the supply chain of inputs within the country but also offset our agricultural trade deficit in a positive direction.
You can read about how we do this here
3 - Absence of Value Addition and supply chain linkages
Due to the nature of the percentage of smallholder farmers, lack of agricultural processing infrastructure, and other contributing factors; the processing and manufacturing segment of the agricultural value chain is underdeveloped in Nigeria. This spirals out into several other secondary problems, one of which as stated in the earlier parts of this article is the agricultural trade deficits. Value addition to agricultural produce can give rise to more exportable material, curb import spending and contribute to GDP growth. This problem is largely infrastructure based and as an innovator, seeking and fostering collaboration with primary players would be a starting point to developing new ideas and solutions for this problem.
4 - Fragmented supply chain between primary players and the market due to a lack of infrastructure for transportation and storage
A lot happens between the farm and the market, from the logistics of transportation to the requirements for storage, a lot goes into getting the food to your vendor in the market or to the port. According to the Nigerian Institute of Transport Technology (NIIT) it is estimated that Nigeria loses 3.7 trillion Naira to food wastage and poor cold chain logistics yearly. This accounts for almost a 40% loss of the country’s total food production. There are many points of dysfunction but it is a problem that can be tackled if you are willing to take it on.
Like with farming, patience is going to be a major ingredient for success as you tackle these problems, but nothing is impossible, and with the agribusiness sector in Africa being projected to be worth 1 trillion dollars by 2025, it is as good a place as any to bring solutions to problems already on the table.
You can read more about how we are doing this ourselves here