Africa Business News: Entrepreneurs. Investments. Banking & Finance. Emerging Markets. Start-Ups
Wednesday, 15 January 2014
The entrepreneurship of agribusiness
RUTH OLUROUNBI examines the entrepreneurship potential in the agriculture sector.
There have been much talks about agribusiness in Nigeria. Recently, the Minister of Agriculture and Urban Development, Dr Akinwumi Adesina, urged the EU member states to pay more attention to investing in Nigeria’s agribusiness. He reasoned that rather than focusing on granting aids to the country to develop the sector, the EU countries should look into the possibilities of forging more partnerships with local farmers, saying doing this would develop the value chain, as well as grow the nation’s economy.
Just this last December, the minister was quoted to have said agric sector attracted $8bn private sector investment in two years. “In the last two years, we have been able to attract eight billion dollars of private investment commitment in to agriculture sector in Nigeria and four billion dollars is being implemented as we speak,” he said.
A few days ago, the Ondo State governor, Dr Olusegun Mimiko, solicitated a further partnership by his state with the International Fund for Agriculture Development (IFAD) for the sakes of “massive” youth engagement in modern agriculutere.
Agribusiness, experts believe, is the next big thing in the world’s future, most especially that of Nigeria’s. Much had equally been written on how to succeed in this type of industry. Some reports said a potential agribusiness owners need to create their “distinctive market” and “give room for varieties”, among others.
But, how much business opportunities are in this industry? What are those specific opportunities entrepreneurs can maximise in this sort of business?
It is on record that agriculture sector contributes about 40 per cent to Nigeria’s Gross Domestic Product (GDP) and employs over 70 per cent of over 150 million people. The beautiful thing about this industry, according to experts, is that with agro-allied industries spanning its services from production, manufacturing, agro-inputs (fertilisers, pesticides, etc.), packaging and distribution besides extension of credit facilities for agricultural investment, “the market potential in Africa’s fast growing, second largest economy is huge,” a journalist in one of the national dailies wrote.
Yet, there is a gap to be filled in this industry, and if entrepreneurs would seek to close the gap, there’s no imagining the economic returns, Seyi Gbadamosi, an agriculture entrepreneur, said. The opportunities in this industry, according to him, “are enormous”. Aside farming and fishing businesses that many people were aware of, one entrepreneur who rents out tractors said, his business is one area an agropreneur can focus on.
Intensive production technology for fresh vegetables for instance, is one area an agropreneur can look to do business in, a technology expert said. Friday Osho, an agroprenuer explained this method to include innovation in agricultural machinery and farming methods, genetic technology, techniques for achieving economies of scale in production, the creation of new markets for consumption, the application of patent protection to genetic information, and global trade.
Now with the growth of modern supermarkets in Africa, coupled with urbanisation and a rising middle class, according to an online report, there is a high demand for quality vegetables that can be obtained using intensive production technologies.
Aquaculture, another agribusiness opportunity, is an area UNDP report encourages young people to invest in. According to the report, “Nigeria alone imports over US$900 million worth of fish annually.” And according to those in the know, almost every country in West Africa is embarking on aquaculture and incentives packages have been designed to attract investment. CHI Limited, for instance, has started with a large aquaculture project in Ibadan, but experts are saying that this project only accounts for less than two per cent of the country’s total demand.
Equipment leasing, an area filled with potential in agribusiness, as those dealing in this field testify, guarantees investment opportunities. Bolaji Lawal, founder and CEO of Cassini Farms, said one of the greatest challenges facing Nigerian farmers is a lack of farming equipment.
Therefore, Wale Adejuyigbe, an entrepreneur, who lends people tractors in the north said this is an area other entrepreneurs could tap into.
Fertilizer production and distribution, seeds and pesticides, are among business opportunities that can be found in agriculture industry.
Featured are two agroprenuers who testify to the “golden opportunities” in agribusiness.