Business
Nigeria eyes private funds to spark agriculture boom
Can investors get rich by backing Nigerian agriculture? An increasingly loud chorus of voices say that answering this question may be the most pressing challenge facing Africa’s most populous country, ahead of defeating Boko Haram Islamists or curbing rampant corruption.
Nigeria last week jumped ahead of South Africa as the continent’s biggest economy after the re-calculated results of national output were announced. Experts agree that agriculture offers the best chance to generate millions of new jobs quickly. But, while job creation and improving food security are national priorities, the best way to spark an agriculture boom is to focus on profit, said agriculture minister Akinwumi Adesina. “It is not about bread,” he told a conference of business and government leaders last month. “It is about making money.”
Armed with degrees from elite US universities, including Harvard Business School, Nigerian Kola Masha returned home in 2007 looking to launch a business with a positive social impact. Youth unemployment was the greatest threat facing Nigeria but few people realized how dire the situation had become, he told AFP.
From 2007 to 2010, Nigeria had one of the world’s fastest growing economies. However the number of people unemployed also rose by 16 percent each year. Youths were especially hard hit, with 56 percent out of work in 2010, according to official data. The trend was in part a result of the so-called oil curse: Nigeria, Africa’s top crude producer, has given excessive attention to the oil industry which generates very few jobs, while ignoring job-creating sectors. “Most people I shared that with said, ‘Oh my God, it’s a time bomb’ and I said ‘no my friend, it’s a bomb that has already gone off’,” Masha said.
A long-running sectarian conflict in central Nigeria has killed more than 10,000 people this century, while the gruesome Boko Haram Islamist insurgency in north has claimed thousands more lives since 2009. “If you talk to anybody in the armed forces they will tell you that it is men aged 16-24 that are driving this whole thing,” Masha said. “They are angry and hungry.”
In 2010 he launched Doreo Partners, a firm committed to creating 10 million jobs by 2030 through private investment in small-scale agriculture. Doreo’s pilot project in northern Kaduna state provides 1,800 farmers with a “complete end-to-end” assistance package, including training, credit to buy equipment and access to high quality seeds, said Masha.
The firm brokers the sale of produce, taking a commission, and earns interest on the loans, of which 99.7 percent have been repaid so far, according to Masha. The key is creating farm organizations, or franchises, which can produce a reliable, high-quality yield that buyers can count on, he added.
