Chaim Zach, Managing Director and CEO, Agric International Technology and Trade; Kabiru Rabiu, Group Executive Director, BUA Group; and Aliyu Abbati Abdulhameed, Managing Director, Nigeria Incentive-Based Risk Sharing System for Agricultural Lending: Interview

Interview: Chaim Zach, Kabiru Rabiu, Aliyu Abbati Abdulhameed

To what extent is the lack of data affecting policy-making and investment in agriculture?

CHAIM ZACH: We are facing a problem in terms of both data availability and reliability. When investing in poultry, for instance, Nigeria’s average consumption is around 1.6 kg per capita per annum, as opposed to the average of 9-10 kg per capita per annum in the rest of Africa and 48 kg per capita per annum in Europe. That number speaks to the growth potential of poultry in the country. However, the consumption of chicken meat in Nigeria is divided into three sections, which is not the case in developed markets. Poultry data in Nigeria is split between fresh chickens, old layers and cockerels, many of which grow in people’s backyards and for which there is no record. Thousands of households have these across the country, which represents a big data gap when it comes to knowing the size of Nigeria’s poultry consumption. In addition, the available data does not take into account commonly smuggled commodities, like rice or chicken meat, which make their consumption and demand figures hard to rely on.

ALIYU ABBATI ABDULHAMEED: Accurate and relevant empirical data is crucial across the entire sector, especially considering the complexity of this segment, where science meets political economy. Policymakers have to design and execute policy for all aspects of agri-business in a dynamic situation. Policies cannot effectively address the needs of citizens without being backed by data. For financiers and investors, clarity is critical, and currently, agricultural projects in sub-Saharan Africa – particularly in the primary production segment – are often perceived as a black hole with no possibility of developing accurate risk profiles and ensuring a return on investment. At the level of the practitioners, agricultural performance is determined by a myriad of factors, from weather, soil quality and capacity, seasonality, biology and physics, to macroeconomic factors including trade policies and global trends. The availability of credible and timely data coupled with analytics is therefore crucial for adequate agricultural value chain interventions, effective policy responses, targeted finance and investment.

KABIRU RABIU: The lack of data is a very important factor affecting the agricultural industry and other sectors of the Nigerian economy, and it certainly affects decision-making. In rice, for example, there has been a significant increase in production, but because there has not been accurate data, it makes it difficult for investors to decide on what side of the value chain to invest. It is difficult to decide whether to go into production or processing, which is a key choice driving the development of the industry. The National Bureau of Statistics (NBS) has recently put a lot of effort into making information available, and they are doing a good job. Companies try to improve their access to information by taking averages from a range of sources, but the NBS remains the most reliable source of data today.

How can technology help to improve the productivity of Nigerian farmers?

ABDULHAMEED: To deliver strong impacts on a large scale, research and development (R&D) efforts must be scaled up and bundled as “research for innovation”. This type of research is critical for providing efficiency and value to all other segments, right up to the market. Such activities centre on the use of advanced analytics and data in building progressive technologies and innovative solutions. The role of science, technology and innovation as enablers for the agri-business value chain cannot be overemphasised. One example is the way that technology has reduced the turnaround time for issue detection and remediation on remote farm sites. Farm management information systems facilitate real-time control and effective management of multiple operations and projects. Technology is also helping farmers protect their financial performance by leveraging mobile primary post-harvest processing systems to store value and access markets via tech-enabled produce aggregation and on-demand marketplaces. They can also gather information on weather, current prices of commodities, insurance and other services.

RABIU: Technology is transforming the productivity of Nigerian agriculture. First, sophisticated soil analysis informs farmers of what soil to use for different crops in particular areas. In the past it was largely a one-sizefits-all approach. The rice farmer and maize farmer would both use the same exact inputs. Now there is the potential to use technology to identify what fertiliser is needed, which not only saves farmers money, but also optimises the crop yield and improves productivity. In other markets, technology is enabling precision farming, where GPS equipment is integrated into the process. Nigeria has now started on this journey as well. Irrigation is another key technology that is boosting productivity. Previously, farmers were dependent on conventional irrigation using open canals. Today sophisticated pumps are giving farmers the ability to draw water from their own land, allowing them to irrigate without relying on rivers. Lastly, smartphones are being leveraged to deliver apps to connect farmers with investors, boosting their access to the crucial financial backing needed to buy inputs and upscale operations.

ZACH: Nigeria is a suitable destination for agriculture because of the richness of its soil, its constant rainfall and regular sunshine. Most of what is needed for successful agricultural business is already given naturally, including fertile soil, water and sun. However, the lack of infrastructure and challenges related to Nigeria’s tropical environment do pose difficulties that technology and R&D can successfully address. For instance, managing a livestock business like poultry in a tropical environment is challenging, and requires the creation of a cooler environment to maintain the productivity of chickens. Building the necessary infrastructure to provide the right temperature and humidity, along with adapted feed distribution systems, is critical. Investing in technology is what can unlock the potential of the sector and make it thrive in this type of environment.

How is the sector’s human capital being developed?

RABIU: These are exciting times for Nigeria. We have to do more in terms of human development in agriculture, as the sector remains the largest contributor to Nigerian GDP. There are still a lot of peasant farmers, and many fewer commercial farmers. The Central Bank of Nigeria and others have started to increase access to credit, which is bringing a lot of empowerment to the sector. For a Nigerian farmer without the right irrigation structure and no access to the right seeds or fertiliser, we see a significantly lower yield and one full harvest season less than we should expect given the conditions on the ground. With the right education, access to credit and infrastructure, farmers will be empowered ZACH: The oil and gas and financial services have benefitted from a lot of government attention over the past few decades at the detriment of other industries. Nigeria imports most of the finished products and technology it needs to run its economy. Over 70% of the population works in agriculture, but it has not received much support from the government or the academic institutions until now. Some universities providing agriculture-related degrees and curricula had students graduating without ever seeing a farm. This speaks to the lack of practical and vocational training, which requires increased attention from the universities and where private sector players can play a role.

ABDULHAMEED: All of the improvements currently being made across different segments are futile if we do not address the behavioural and capacity issues that exist in the country. For this, a context-specific approach relying on traditional governance is required. Human capital development in Nigerian agri-business remains suboptimal, with many subsistence and smallholder farmers unaware when they are producing at a loss. In order to overcome these challenges, there is a need for capacity building that takes into account group dynamics and governance structures and also focuses on basic book keeping and financial literacy.