Wastes mostly made up of perishable items such as tomatoes, pepper, fruits and vegetables often accumulate along the express road by the Mile 12 market in Lagos. Losses accrue to individuals and businesses in the value chain as a result of such wastage due to poor preservation and storage techniques.
Most farmers and foodstuffs sellers still rely on the natural shelf life of farm produce which given Nigeria’s weather conditions often does not exceed a few days. This translates into higher prices of foodstuffs that get to the consumers as the retailers have to factor in the cost of the produce that would get wasted before they finish selling off the stock of foodstuffs they have. So, consumers have to pay about three times higher than what they should have paid. In practical terms tomatoes sold for N100 could actually sell for as low as N30 if the retailer is assured that there would not be wastages.
Wholesalers and retailers of perishable foods but farmers mainly also experience lower returns due to poor storage and preservation techniques. Current techniques for cooling and refrigeration often rely on the availability of electricity. There is therefore the need to develop technological innovations that will address the issue of storage and preservation without totally relying on the national electricity grid.
As a result, a number of Nigerians in the private sector are already taking advantage of the inherent business opportunity in this problem to work on and develop low cost storage solutions that will enhance storage and preservation of fresh produce. Quite a few are already providing such solutions on a small scale but cannot scale up to serve the mass market not because their ideas cannot attract sufficient profit after up scaling but because they simply cannot afford to do so.
It is for this reason that the Gems4 Enterprise Challenge Fund was developed to provide both technical and financial support (up to £150,000) to private sector actors willing to adopt innovative business models. These models must have approaches that will develop and deliver storage and preservation solutions powered by affordable and alternative energy sources to poor actors within wholesale and retail value chain.
The Fund seeks to support private sector providers with proven business case for delivering innovative business solutions targeted at low income actors, particularly those in informal sectors.
Ultimately, the objective of the Fund is to stimulate business innovations resulting in job creation and improved incomes for poor and vulnerable men and women within the Wholesale and retail sector.
The GEMS4 Enterprise Challenge Fund is being implemented in Nigeria by the UK Department For International Development (DFID) with the GEMS4 project.
The GEMS4 project already works with business associations, service providers, producers, retailers, wholesalers and other actors involved in the market, by linking them up, so as to work together and serve each other better.
Additionally, the project is building local capacity and changing market incentives so that the sector better meets the long-term needs of the economically challenged. More information on the fund is available on the project website.