Hitting the $1 TRILLION agribusiness mark

Agribusiness in sub saharan Africa is estimated to develop from $313 billion in 2010 to a $1 trillion industry by 2030 according to the World Bank. This stakeholders say would be a laudable achievement considering the underlying prospect for job creation, food security and economic development.

However, on the road to attaining $1 trillion mark are challenges and opportunities which given the right response will railroad Africa out of poverty.

The four greatest challenges of agribusiness in Africa are listed as:

  1. Infrastructure deficit.
  2. Financing deficit of 11 billion annually for expansion.
  3. Input supplies
  4. Policy and regulatory environment

Narrowing down to the financing deficit, Nigeria alone has a yearly deficit of $4.6 billion – $6.5 billion due to the following reasons:

  • Only few agribusiness firms in the medium and large scale operation have access to agricultural financing particularly actors in the midstream and downstream value chain activities such as processing, marketing and trade.
  • Smallholder farmers are majorly underserved even when in cooperatives and producer association.
  • Short term loan tenor
  • Interest rates average more than 20%
  • Collateral, credit history, large documentation and long processing time.
  • Mismatch in demand and supply gap with regards to lending volume, tenor and product mix

In surmounting the aforementioned challenges, it is imperative for agribusiness financing to consider:

  1. Financing of working and investment capital across the value chain.
  2. Leveraging innovative programs that take cognisance of the infrastructure, technology, training, value addition, extension support services and markets in the implementation of agricultural funding programmes.
  3. Financial institutions and private sector agribusiness players should explore collaboration with value chain actors and organised cooperative groups to create a pragmatic model that intertwines stakeholders into a comprehensive agribusiness ecosystem.
  4. Agribusiness cooperatives and Development Finance Institutions (DFI) needs to live up to their primary role in organising and delivering agribusiness funding.

In the light of the above, Tritech as a brand is positioned to play a definitive role in this direction in collaboration with other stakeholders.

2 thoughts on “Hitting the $1 TRILLION agribusiness mark

  1. Interesting piece. Hope it will address issue of access to finance.

    1. Addressing the issue of access to finance is an understatement. It will revolutionise Agribusiness.

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