• Saturday, April 13, 2024
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Agribusinesses revenue in Nigeria, others fall 20% as tripe shocks hurt output – Report

Agribusinesses revenue in Nigeria, others fall 20% as tripe shocks hurt output – Report

Agribusinesses in Nigeria, Tanzania and Zambia have seen their revenues fall by an average of 20 percent in four years owing to the devastating impact of COVID-19, climate change, and the Russian-Ukraine, according to a recent AGRA report.

The report titled ‘From Crisis to Opportunity’ stated that agribusinesses across various value chains in Nigeria, Tanzania and Zambia are still recovering from the impacts of COVID-19, climate change and the Russia-Ukraine war.

“Many agribusinesses have been unable to bounce back completely from the impacts of COVID-19, highlighting the need for us to build more resilient market systems,” the report stated.

The report revealed that due to the “triple crisis,” revenues of agri SMEs in these countries have declined 20 percent year-on-year since 2020, as many businesses still grapple with escalating expenses caused by climate-related issues and the ongoing war in Ukraine.

“In all three countries, agribusinesses in Nigeria recorded the highest percentage of capital injection and staff trimming,” the report said.

“Agribusinesses in Nigeria have declined by 49 percent since Covid-19, and many SMEs invested 42 percent of personal revenues into their businesses to prevent them from folding,” it stated.

According to the report, 36 percent of these businesses have reduced their staff strength due to revenue shortage.

“Increases in the cost of doing business, especially for transport, produce and labour, all resulting in higher prices with lowering customer spend in the market,” the report said.

SMEs in Nigeria experienced a dip of 49 percent between 2019 and 2020, and are still finding it difficult to bounce back today, the report noted.

It added that the high cost of transportation is a leading cause of Nigeria’s agribusinesses decline contributing 85 percent to its headline decline.

The report revealed that while agribusiness owners in Tanzania sourced loans from commercial banks, those in Nigeria had to self-fund their businesses. “This is due to inhibiting loan policies affecting people in the agricultural sector in the country.”

Like Nigeria, Tanzania has not been spared of the “triple crisis”, as the country lost 82 percent of its agribusinesses revenue between 2019 and 2020, the highest of the three countries, the report said.

“Agribusinesses in the country have had to use 24 percent of personal funds for their businesses to run smoothly and cut down staff 33 percent since after Covid.”

In Zambia, agribusinesses recorded 61 percent of their revenues between 2019 and 2020, experienced staff reduction of 24 percent, and invested 33 percent of personal funds into their businesses, it said.

Maize was the hardest-hit crop in Tanzania and Nigeria in 2020 after COVID-19, while in Zambia, tomatoes and soybeans were two crops that were majorly affected in the same year.

The agency’s report focused on the impact of these “triple crises” — Covid-19, climate change and the war in Ukraine.

“We hear the voices of this often-unheard group, who form a critical market for farmers, and we recognize their need for targeted support and investment,” Agnes Kalibata, president of AGRA, said in the report.