Business leaders in the agriculture space are of the view that Africa, and Nigeria in particular, must begin to look at ways of moving away from the smallholder farming model alone.
Smallholder farmers produce 80 percent of the food currently consumed in Africa, and there have been, before now, discussions around supporting them to unleash their full potential.
However, experts that spoke at the ongoing annual Africa Business Convention 2023, organised by BusinessDay, noted that agriculture will not become investable if models that encourage connections and aggregation are not prioritised.
“We need to look at ways of moving away from the smallholder model alone,” Sanne Steemers, president, of Rest of Africa, AFEX said at a panel session themed ‘Mobilising the necessary resources, through investment and innovation, for Africa to feed itself and the rest of the world’.
“So what we’re looking at is also options for setting up say, agricultural estates, either large-scale farming or clusters of medium-sized farmers that for example, share equipment, with rental mechanisms and such.
“But the connection and aggregation is very important because otherwise, agriculture will not become investable,” Steemers added.
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While moderating the panel session, Olanrewaju Oniyitan, founder, W-Holistic Business Solutions, said Africa can build on the potential that it has by putting structure in place for smallholder farmers to come together and grow.
Ben Leyka, CEO, Africa Agric Council also said that the promotion of agriculture as a business in recent years cannot be backed up by investment data because 60 percent of the farmers that produce the food on the African continent are eluded from real investments.
“You find that these farmers do not qualify for investment through traditional channels; retail banking, private equity firms, DFIs, etc, but are more open to donor funding/grants.”
This investment ratio, he said, is already a problem because it doesn’t convey the profitability in agriculture from an investment perspective.
Stakeholders say data show that by 2025, Africa will still be importing food of up to $110 billion. This, according to them, can be turned around via local production if the issue of financing in the sector is tackled.
The African business leaders drew attention to the issue of policy implementation.
“From the policy formulating perspective, agriculture is prioritised. It’s implementation that is the problem always,” Leyka said.
They also said measures like trainings, an enabling environment, infrastructure, having an organised structure, and governance will better position agriculture in Africa for foreign financing/investments.
