Poverty eradication in Nigeria: How GBFoods creates value in agric using backward integration
In a world where countries strive for increased development in human capital, poverty has remained a major socio-economic problem. Due to this challenge, the United Nations made poverty eradication the first of its sustainable development goals to be achieved by 2030.
Whilst some progress has been made in the fight against poverty, the Covid 19 pandemic created a setback due to the lockdown, influencing a downward spiral of income for many people.
The World Bank estimates that between 88 million and 115 million more people were plunged into poverty mostly in South Asian and sub-Saharan countries as a result of the COVID-19 pandemic. The United Nations recognises poverty as a violation of human rights hence declared October 17, annually, to observe the International Day for the Eradication of Poverty; a day devoted to presenting and promoting the eradication of destitution and poverty.
The theme for this year is” Building Forward Together: Ending Persistent Poverty, Respecting all People, and our planet”. This approach is about transforming human relationships with nature while discouraging discrimination against people in poverty. It also speaks to building on the moral and legal framework of human rights, placing dignity at the centre of our actions.
In the process of building forward, people living in poverty will be encouraged, supported, and involved in decision-making for collective progress. Looking beyond the financial aspect of things, they will be enriched with knowledge, positive energy and resourcefulness for community and societal growth.
Over the years, the Nigerian government has made efforts to eradicate poverty. The National Poverty Eradication Programme (NAPEP) was established in 2001 to replace Poverty Alleviation Programme (PAP) founded a year earlier. Since its establishment, NAPEP has provided skills acquisition and training for self-reliance through collaboration with various agencies and organisations. However, more needs to be done in the quest to eradicate poverty in Nigeria.
The National Bureau of Statistics based on its 2019 Poverty and Inequality report in Nigeria, highlights that forty percent of Nigeria’s population live below the country’s poverty line of $381.75 per year.
To improve on poverty eradication, the government diversified focus on other sectors beyond Oil and Gas for revenue generation. By expanding into the agricultural sector, citizens can create earning and human capacity potentials through subsistence and commercial farming.
At the subsistence level, families can cater for feeding needs irrespective of their income and save funds for other necessities. At the commercial level, the government continues to create an enabling environment to facilitate growth and sales by partnering with private organizations to drive development.
As one of the largest food brands across Africa, GB Foods continues to be at the fore of celebrating indigenous growth in agriculture by empowering farmers in various communities. Through effective and sustainable collaboration with the government and other stakeholders, the company continues to take steps towards eradicating poverty among farmers and other grassroots community members through Backward Integration.
Read also: CHI Limited deepens investments in backward integration programme
In 2017, the Federal Government implemented measures aimed at discouraging importation through an increase in tariffs on tomato concentrate from 5% to 50% with a $1,500 levy per tonne. In line with its economic diversification plans, the government also developed a draft code of practices to improve the tomato chain value from planting stage to harvesting to assist farmers in producing fresh tomatoes for local industry and foreign exchange earnings.
The Federal Government recently amended this Policy made up of Supplementary Protection Measures to implement the ECOWAS Common External Tariff with effect from the 6th of September, on the importation of Tomato not put up for retail sale at 10% duty rate and 20% IAT Levy to be limited to National Supply Gap by investors/processors with verifiable Backward Integration Programme (BIP).
GBFoods has remained the most compliant organization to the BIP and continues to strive towards encouraging an encompassing value chain. The government having seen some of the challenges of the previous policy amended it to further encourage stakeholders on growth.
Through backward integration, GBFoods set up facilities for a cost-effective and reliable supply for production. There is room for a bigger platform to engage more people at the lower cadre in the production process hence a means for stable employment in the journey to eradicating poverty. It is pertinent that for farmers to benefit effectively, there must be a sustainable value chain that impacts production. This should be a means of imbibing solutions to the average person involved in farming.
‘‘To improve the value and supply chain in the sector, it is important we make Backward Integration a priority because it solves some of the challenges around indigenous production, growth, and pricing. For us at GBFoods, we try to expand our capacity to absorb the need of farmers and consumers. This is a huge step in the fight against poverty eradication and the need to empower women at the grassroots. In the communities we operate, women are very active and with our input, we continue to empower them to earn and take ownership of their own enterprise said Teddy Ngu, director, Corporate Affairs, GBFoods.
The Federal Govt of Nigeria also sees backwards integration as a key pillar for job creation and poverty eradication. In the tomatoes sector, the government rolled out a tomatoes policy to encourage sector players to go into tomatoes cultivation on owned farms and also using outgrowers. GBFoods has been very supportive of the said policy…and in the words of Mr Vincent Egbe, MD, GBFoods, Nigeria – GBFoods has been the most compliant with the government tomatoes policy through its integrated farm and factory in Kebbi State.
Nigerians may recall that in 2020, GBFoods in partnership with the Central Bank of Nigeria, the Kebbi State Government, and the Emirate of Yauri built a N20 billion Tomato Processing Factory. The fresh tomatoes processing factory is one of the largest in Africa and the only fully backward integrated plant in the sub-Saharan African region. The project created over 1,000 jobs for people in the grassroots including farmers, factory workers as well as construction workers.
Additionally, smallholder farmers were engaged by the company as out-growers. They also received training on good practice and were equipped with seedlings, agrochemicals and other farming essentials to improve their capacity and productivity.
With the capacity to create opportunities to grow rather than import produce, more farmers and other workers have access to knowledge that will enable them to become more competent, and productive, as well as channel resources for economic growth. It has also encouraged members of communities where GBFoods operate to have a sense of belonging and ensure that they build together. This will go a long way in the fight towards poverty eradication. Three bosas for GBFoods.