How BATN Foundation, BOA’s collaboration is driving sustainable agric development
AT the last Africa Investment Forum session titled, ‘Agribusiness: investment conversation with industry leaders’ in November 2018, executives of the continent’s top agribusiness companies and other stakeholders who gathered to examine investment in agric-business in Africa noted that investments from the private sector would facilitate a conducive environment for and boost the emergence of locally owned agro-processing industries capable of creating jobs and increasing incomes in Africa.
Agriculture, which represents 15 per cent of the continent’s total GDP, is estimated as the continent’s largest economic sector and Nigeria contributes 14% of its total agricultural output.
The $1 trillion growth in the food market in Africa forecast by World Bank for 2030 places an obligation on Nigeria to strengthen its investments in boosting agriculture yield and integrating the value-chain over the next decade. Notably, this will require the agriculture budget to GDP be sustained at seven per cent annually, at the minimum.
Agricultural financing is reckoned as the single most important factor affecting the performance of the sector in Nigeria. Sadly, inadequate financing or capital hindered the growth of the agriculture sector. The impact is felt more by smallholder farmers who account for 70 per cent of the total farming population and produce some 90 per cent of Nigeria’s food needs.
Regrettably, the low credit rating of agricultural production in Nigeria by commercial banks makes it difficult for agric-businesses to access loans from banks. This rating is occasioned by a number of factors, including the risks involved in agriculture, profitability; bad loans accrued overtime and poor level of literacy of the vast majority of farmers who are not conversant with bank procedure.
According to the Nigerian Bureau of Statistics (NBS), credit to the agriculture sector has been in the neighborhood of three per cent of total credit to the private sector in recent years. This pales in significance when compared to credit to other industries despite the sector contributing more to the nation’s Gross Domestic Product. It is, no doubt, the least credit allocation from banks.
Notably, in recent years, the Federal Government has designed various initiatives in a bid to address the problem of inadequate access to loans and bolster credit market for agribusiness. These initiatives include the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), Anchor Borrowers’ Programme, Commercial Agriculture Credit Scheme (CACS), which are financing and risk management strategies to support development of the agriculture sector.
Also, as canvassed at the 2018 Africa Investment Forum session, the private sector and well-meaning international organisations have been complementing government’s effort in ensuring the economy is diversified through agriculture and in achieving self-reliance in food production and boosting foreign exchange earnings. These include the International Fund for Agricultural Development (IFAD), the Bill and Melinda Gates Foundation, Dangote Foundation, British American Tobacco Nigeria Foundation (BATNF), among others. A common goal in the agricultural transformation drive of these organisations is the bid to increase agricultural productivity for smallholder farmers as well as their household income.
This is often effectively done through collaborations between them and government institutions on established or new agricultural initiatives.
A recent example of such partnership is the memorandum of understanding (MoU) recently signed between the British American Tobacco Nigeria (BATN) Foundation and the Bank of Agriculture (BOA) with the aim of enabling the latter implement several of its agricultural programmes across the country thereby driving economic growth through agriculture.
The initiative is encapsulated in the BATN Foundation Wealth is Here campaign, a youth-centric initiative, through which it hopes to bridge the gap mitigating the involvement of agropreneurs in agriculture.
Speaking on the partnership, the Executive Director, BATN Foundation, Abimbola Okoya, said the signing of the MoU underscores the commitment of both organisations to work together in attaining a joint mandate to promote sustainable development in Nigeria.“I am excited about this partnership and the initiative because it has the youth at its core. Young people are the heartbeat of Nigeria, the future powerhouse of agriculture.
Hence, they should not be ignored” she said. Unfortunately, many young people do not see a future for themselves because of the tough business environment. With the Wealth Is Here Initiative, BATN Foundation is bridging the gap by providing access to grants, market and technical support to encourage the establishment of viable business enterprises.
She also expressed BATN Foundation’s commitment to support sustainable agricultural development through its 2018 – 2022 country programme and commitment to invest N700million.
The Executive Director, Bank of Africa, Mr Olabode Abikoye, described BATN Foundation as a big partner for any corporate engagement. “We are honoured to be a part of this initiative and I am happy that BATN Foundation is identifying what the critical need is and is stepping into the gap to fill that need. I am also impressed that the Wealth is Health campaign by BATN Foundation has a lot of thought-out initiatives,” Abikoye said. “What BATN Foundation has done is to give hope to our teeming youths and convince them that they can prosper in Nigeria and don’t need to leave the country for greener pastures. We identify with that as a development finance institution that has the rural economy as our primary focus. We appreciate your gesture,” he added.
Abikoye stated that one of the crucial points the BOA has based its activities on is ensuring a reversal of the urban-rural migration and provide a tangible basis for rural folks to hope for better livelihoods.