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Industry Reports

October 01, 2023

Agritech as an essential partner for enhancing food security in Nigeria

Nigeria’s agricultural sector remains an integral one, contributing significantly to the country’s economy and providing employment to around 70% of the informal sector. The National Bureau of Statistics reports that in 2022, agriculture accounted for 21.09% of the nation’s GDP. Year on year, we have seen an increase in the contribution of agriculture to Nigeria’s GDP, owing to a number of factors including the rising popularity of agritech startups as a viable sub-sector.

Agritech as a business sector has come a long way in a short time. Over the last decade, agric technology companies have built tested, proven and successful digital solutions that have yielded real impact, transforming agricultural processes and outcomes, while attracting both local and foreign investment. This has resulted in a vibrant Agritech market in Nigeria, attracting more players and investments, positioning the country as a key market in sub-Saharan Africa. Take for example, of the $133 million raised by agritech startups in Africa in 2022, ThriveAgric was responsible for about 45% of the total investment that came to the sector across the continent in that period. Thus, underscoring Nigeria as a key destination for agricultural investments on the continent. Furthermore, a Microsoft report predicts that agribusiness in Africa will be worth US$1 trillion by 2030 and Nigeria needs to be strategically positioned to feature prominently in this future. 

According to the ‘Agritech in Nigeria: Investment and Opportunities’ report published by GSM Association, agritech startups largely innovate across three prongs of digital agricultural solutions namely: access to market, access to assets and access to services. These areas have been identified as major challenges for smallholder farmers who are responsible for most of our food production as a country. From accessing quality farm inputs, up-to-date farming techniques/skills, quality storage and premium markets, farmers need to be empowered to focus on the business of farming and not worry about external circumstances. Factors like market price uncertainty and market demand can be hedged positively with proper systems in place; these are other areas ThriveAgric is invested in, in addition to working directly with smallholder farmers round the year from pre-planting season to harvest. We are integrating technology to address challenges of productivity, accessibility for farmers and overall better agricultural practice for over 500,000 farmers and to great success. 

As a country, Nigeria has been impacted by global macroeconomic conditions as much as local or home-grown challenges. Our resilient nature as a people has spurred innovation that has ensured we navigate the worst of conditions. Last year, extreme climatic conditions caused wanton destruction of lives, properties and livelihoods especially in farming communities. According to the National Emergency Management Agency (NEMA), more than 4.4 million people were affected in 2022 by flooding that wiped away more than 676,000 hectares of land during harvest time. In 2021, the numbers were equally poor. So far in 2023, we have experienced flooding from non-stop torrential rains even in cosmopolitan cities like Lagos. This calls for urgent intervention for food security.

In 2022, as a Presidential candidate, President Bola Tinubu pledged to establish a National Agricultural Commodity Directorate, once elected. This, he said, would be for the purpose of repositioning the agricultural sector for maximum growth. As the newly-elected president of Nigeria, President Tinubu has doubled down on his plan for the agric sector with the promise that his administration would create agricultural hubs across Nigerian states to boost food production and Nigeria’s food security. This consistent messaging represents good faith in the sector and we believe that follow-on actions will not only promote food security, reasonable price stability, but enhance the livelihoods of smallholder farmers and every other value along the agricultural value chain.

To meaningfully enhance national food security, key stakeholders like agritechs involved in agricultural production at scale must be engaged and supported. Over the past years, ThriveAgric has disbursed over $100m worth in input  financing to smallholder farmers and off taken more than 1.5 million metric tonnes of farm produce. This includes contributing 6.5%+ of grains to the national grain reserves. We have done this by working with farmers in 23 states of the country, providing them with expert advisory and extension services including supporting them with storage infrastructure in multiple locations. In line with our mission to accelerate an Africa that feeds itself, we have begun piloting in neighbouring Ghana and Kenya. Our work with smallholder farmers have yielded social benefits such as reducing poverty and improving gender equality. Smallholder farmers that work with us produce double the national average yields due to access to better quality seeds, fertilisers and equipment. At ThriveAgric, we will continue to adopt a multifaceted approach to drive sustainable agricultural practices. 

The success notwithstanding, it’s worth reiterating that agritech in Nigeria is still a very young sector where creative entrepreneurs innovate around existing challenges to arrive at the best possible outcome for farmers, investors and the country at large. According to the AfDB, agri-SMEs are annually underfunded by approximately $100 billion. To survive, agritechs are tweaking their business and pushing boundaries to optimise for scale, revenue and impact and in the process lessons are being learnt sometimes at great and avoidable cost. With many young entrepreneurs in the sector coming up with innovative solutions to address food security, now is the time for government and institutional support to encourage agribusinesses as a critical catalyst in the nation’s economic future.

In addition to bridging the funding and skills gap for smallholder farmers, agritech remains a veritable opportunity for massive employment and for leading meaningful lives. As a socially-conscious business, we better the country’s talent pool and create social impact for the youth via our Tech-Talent Accelerated Program (TAP) - a scheme designed to increase the participation of more young people in tech.  Like most accelerators, TAP equips participants with the knowledge and skill set to start or improve their career, whilst introducing them to the opportunities in the fast-growing Agribusiness industry.

When we started ThriveAgric in 2017 in Abuja, our vision was and continues to be ‘to build an Africa that feeds herself and the world’. In order for us to achieve this vision, we have to solve the wide issue evident on the continent of food insecurity, which we have started addressing in Nigeria. We will continue on our mission to raise local capacity and build a network of 1 million farmers in 2024, and break down the barriers limiting food security and food sufficiency. 

On this Independence Day, we celebrate our country Nigeria and the strides we have made so far in utilising technology to address food security. As the leading agritech in Nigeria, we make a commitment to continue to lead the charge on building a viable and sustainable food ecosystem. For our Farmily in Nigeria, we remain indebted to partners, investors and everyone involved in making the ThriveAgric story what it is today and are excited for the future ahead. Happy Independence Day Nigeria!

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