FCMB Forum: Stakeholders Believe Nigeria Can Leverage Agritech To Achieve Competitiveness


Sunday, August 30, 2020 / 4:30 PM/ Nifemi Taiyese for Proshare WebTV/ Header Image Credit: WebTV

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Stakeholders have made a strong case for leveraging Agritech to achieve competitiveness in the Nigerian economy.


This was part of the key submissions at the 2020 Agritech Epic conference hosted virtually by First City Monument Bank, FCMB which focused on the theme "Redefining and Repositioning Agricultural Value Chains During and Post the COVID-19 Era" that highlighted financing, technology and opportunities for Nigeria to be a part of the agric global value chain.


Giving the welcome address at the webinar, Mrs. Bukola Smith Executive Director, Business Development FCMB emphasized how essential food security and sustenance is to the world, as the pandemic outbreak of COVID 19 echoed the importance of technology and innovation to the agricultural sector.


Businesses at different stages of the agricultural value chain according to her must seek a new approach of doing things and staying afloat. She noted that accessing finance around agricultural trade is needed for businesses to thrive and achieve maximum productivity.

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Mr. Olushola Obikanye, the Head, Agric Business and Structured Trade & Commodity FCMB giving his presentation said in the 1950s and 1960s Nigeria reflected an agrarian economy, which was achieved through a well clustered/structured value chain. He further defined the value chain as 'the interplay of activities that go in a particular sector and also various activities that have an impact on the target end'.


Highlighting the various stages of producing, processing, farm machinery/ equipment and storage as part of the value chain with different opportunities and strategies, he said agricultural businesses across all value chains must have access to finance to scale their business by taking into consideration the following;

  • Access to information through a well-networked system.
  • Proper understanding of the structure of the business.
  • Adequate information about financial records through proper bookkeeping.
  • Eligibility for funding i.e if the business can access loans.
  • Identifying an Agric friendly institution that also has subject matter knowledge to serve as a lender.
  • Having security/collateral which is a requirement for those that will provide the funding.


Following Nigeria's realization to go back to Agriculture, as a nation, there is the need to fix the value chain and ensure the farmer is well informed and also ensuring the farmer has access to the best resources. The areas of 'structure, access and logistics' are very crucial parts of the value chain that needs to be fixed as there is the dire need to re-examine all agricultural fragments of the country.


Obikanye called for the government to collaborate with the organized private sector to achieve growth in the agricultural sector. The issue of financial literacy also has to be addressed in the Nigerian clime as most farmers do not get access to funds because of the knowledge gap present. Government funds priced at single-digit interest rates, Commercial Banks and Development Partners are avenues for those in the Agric business to source funds from. 

He also advised Nigerian practitioners involved in the Agric value chain to acquire global certifications required to seamlessly export globally.


Speaking further he said there are different types of funding available to businesses and they are long, medium- and short-term funding which is going to be determined by the kind of business being run, as it is essential to get the right kind of financial products for success and longevity of the business.


Mr. Rufus Idris, Deputy Chief of Party, USAID Feed the Future Nigeria Agribusiness Investment Activity, providing insight on the role of USAID highlights that they identify the constraints in the Agribusiness space and provide solutions to the bottlenecks through connecting businesses with financial institutions to scale and improve technology, provide consultants to guide in the area of strategy and decision making, and support with capacity building through deploying requirements to improve operations.


He emphasized employment and job creation to practitioners in the Agric value chain by equipping them with digital skills through periodic training. 


Giving statistics, Idris stated that agriculture contributes 24% to Nigeria's GDP and also employs two-thirds of the labour force and as such provides huge potentials and opportunities for people in the country. To achieve innovation, he stressed that it is important to pay attention to market intelligence information.


A lot of companies within the Agric business space that adopted technology before the pandemic outbreak of COVID19 were able to continue activities to an extent compared to those that did not.


On his part, Mr. Mike Ogbalu, CEO Verve International, said technology serves as a multiplier effect in various sectors and hence the need for Agric businesses to leverage technology to solve all the problems that exist in the value chain which will improve the output of the space.


To achieve scale Ogbalu harped on the need to create a single digital platform that brings together all the different stakeholders, which will also serve as an available infrastructure that seamlessly allows the manufacturers to connect with the remote farmer and also farmers connecting with investors and so on.


The technology solution platform will help to solve the challenges of access to information and visibility which will in turn have a greater impact on the nation's economy and also assist in optimizing financial inclusion. 


Talking on growth strategies, Ogbalu is of the view that expanding across Africa starts from having the capacity to thrive locally. It is important for the quality, standards and presentation of products to meet global standards. He calls for more investments in Nigeria's processing industry. There is a need to gather information on what is happening in the ecosystem which will help in the creation of innovation that will aid activities.


Kemi Arosanyin Director Africa Trade Expansion Program, World Trade Center, Miami giving her expert knowledge on the subject matter attested to the fact that there are many export opportunities for the agricultural sector in Nigeria across the regional sector provided the products add value. 


"Nigeria needs to address the complications in terms of exporting to the global community to be able to take advantage of the export opportunities. To be part of the global market integration, Nigeria needs to shift from raw materials to finished consumer goods which now has more demand on a global level.


She opined that Nigeria has not scratched the surface of the export opportunities that abound.

Arosanyin identifying some of the trade regulations in sub-Saharan Africa that Agribusinesses should be aware of include;  Inspection Requirements, Product Certification, Documentation Requirements and Import Standard Markings.


Financial risk, Market risk and institutional risk are some of the types of risks present in the Agric business. After highlighting the types of risk, the African trade expansion expert recommends some risk management strategies and approaches for Agricultural businesses in Africa.


1. Portfolio diversification: to various value chains in the industry.

2. Insurance: Signing up for insurance products that indemnify the business.

3. Contract Production: An agreement/commitment with an off-taker that will help mitigate risk in the event of price fluctuation.

4. Exploring New Technologies to help with overall output.


Speaking on the Africa Free Trade Continental Agreement Arosanyin said under the AFCFTA the entire trade processes and standards will be harmonized across all fifty-four participating countries which she opined is an advantage for Nigerian MSMEs. AFCFTA is a market access instrument which is a great opportunity Nigeria can benefit from.


Giving the closing remarks, Divisional Head Agric Business FCMB Kudzai Gumunyu mentioned that the comparative and competitive advantage is essential for Africa to compete with the world.


"We are seeing a new breed of Africans who are taking the bulls by the horn through leveraging technology to provide a new narrative of agriculture," he said.

Gumunyu said as a financial institution FCMB is discovering ways to partner and achieve growth for Agriculture through adopting technology as a relevant and pertinent tool to developing strategy.

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