• Thursday, February 22, 2024
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Building a smart marketplace for food

Building a smart marketplace for food

According to the Cadre Harmonisé, an initiative focused on food and nutrition analysis that conducts biannual studies across 26 states and the Federal Capital Territory (FCT), approximately 26.5 million Nigerians are expected to experience extreme levels of food insecurity in 2024. Almost 9 million children are at risk of suffering from acute malnutrition or wasting. Among these devastating figures, nearly a third of these children could face severe acute malnutrition (SAM) and require urgent nutrition treatment.

Meanwhile, farmers working to put healthy, affordable food on the table are losing yields due to theft and ongoing conflicts. As instability affects Nigerians in conflict areas, food security, availability and access remain at risk. Severe weather events such as the El Niño crisis are striking, and inadequate infrastructure reduces the shelf-life of fruits and vegetables. Disasters such as these are becoming more fierce and too frequent.

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Parallels can be drawn between two industries providing basic human necessities in Nigeria: energy and food production. Nigeria’s grid produces energy at a quarter of its capacity, highlighting the inefficiency of basic infrastructure. The costs of food and essential non-food commodities continue to climb due to constraints on supply.

As Nigerians face a climate crisis, malnutrition, and rising inflation, families face hunger and often have no choice but to take on debt to cover their basic needs.

Private investment is needed to increase Nigeria’s food resilience and self-reliance

Investment in enhancing the economic potential of businesses and individuals in the agricultural sector can build resilience and self-reliance. Private capital is needed to create upgrades across the agricultural value chain, focusing on innovation at various stages of production, processing, distribution, and consumption of agricultural products.

We grow produce in Africa yet prioritise value addition abroad, allowing processed goods to be imported back into the region. Focusing investments on processing facilities for value addition and agro-industries to develop agricultural goods locally could significantly increase farmers’ earning power, creating higher incomes and reducing post-harvest losses.

Q: The costs of food and essential non-food commodities continue to climb due to constraints on supply

Farm inputs and investments in technology offer solutions that provide farmers access to high-quality seeds, fertilisers, safe agrochemicals, and innovative agricultural technologies that can elevate productivity. Since 2013, BII has committed $165 million to support leading fertiliser manufacturer, Indorama Eleme Fertilizer and Chemicals Limited in constructing and operating the world’s largest single-train urea plant in Port Harcourt. BII’s financing aims to maximise Nigeria’s potential by reducing our heavy reliance on imported fertiliser. We can and should become more self-sufficient, increasing the competitiveness of Nigerian exports.

Reducing post-harvest losses with infrastructure development

Improving infrastructure such as storage facilities, modern farming machinery to replace labour-intensive methods and upgrades to roads can decrease post-harvest losses, and improve efficiency. This can help facilitate the transportation of agricultural products to global, regional and national markets.

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In November last year, BII committed US$26.5 million to AFEX, Africa’s leading commodities platform. The investment will help multiply storage capacity and implement warehouse technology with next-generation software that captures post-harvest pricing. This enables up to 200,000 more farmers to maximise sales from crop harvests, projected to double farmers’ income.

We are also supporting AFEX’s plans to improve the scale, speed and development of local processing capacity – creating jobs and helping to expand operations beyond its current fleet of over 200 warehouses in Nigeria, Kenya, and Uganda, where macroeconomic issues such as high inflation and interest rates, domestic tax hikes and climate events exacerbate the need for impact investment.

Elsewhere, the Nigerian Stored Products Research Institute is leading the implementation of innovative technologies to realise greater value from the agri value chain. Another effort, the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), has facilitated over $373 million in financing to support exports, including investment in storage facility projects. The partnership between NIRSAL and private investors has enabled the construction of new warehouses and silos in various regions across the country.

In line with this trend, at a national level, Nigeria invested NGN 66 billion in silo complexes, grain aggregators and warehouses to increase capacity to preserve agricultural goods such as grain – staples of the Nigerian diet. Despite this progress, more solutions are needed.

Building a modern food marketplace

As the global population grows, demand for more diverse and nutritious foods and robust supply chains will intensify. Harnessing science and technology will ensure that food supplies are sustainable and protected from extreme weather events.

Disruptive technologies provided by companies such as SunCulture combine solar water pumping technology with high-efficiency drip irrigation so farmers can increase their productivity while spending less. Through our climate innovation facility, we also support Pula, an agricultural insurance and tech company that designs and delivers innovative agricultural insurance and digital products. Its mission is to help smallholder farmers endure yield risks, improve their farming practices, and bolster their incomes over time.

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New digital technologies and services can impact food production, processing, and preservation. By increasing our investment in tech-enabled solutions to prevent food crises before they start, we can build capacity amidst climate-induced challenges to help drive a more productive, efficient, and competitive agricultural system for years to come.

 

Benson Adenuga, Head of Office & Coverage Director for Nigeria, British International Investment