post-harvest losses

Exploiting Agribusiness Opportunities in Africa: Food Security, Employment, and Economic growth

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In various continents of the world, Agribusiness has been known to be a driver of economic growth. In Africa, it has a positive impact as it accounts for 30% of national income as well as a bulk of export revenues and employment. Kenya for example, is a key producer of tea, accounting for 59.6% of total production in Africa. The country is a leading tea exporter and one of the largest black tea producers in the world. With an estimate of 33 million small holder farms in Africa, a vibrant agriculture driven economy can cause increase in yields, increase in income generation, reduce in post- harvest losses and thereby put an end to food wastage. Agribusiness is capable of initiating the agricultural growth that will positively improve the livelihood of Africa’s increasing population. It can fasten Africa’s progress towards development.

In Nigeria for example, over 78.4 million people are willing, able and actively looking for job, development in agribusiness can have a direct impact on this people because an efficient and effective agribusiness will lead to increased employment in agro industrial activities.

Agribusiness does not only cover farmers it covers input suppliers, agro processors, traders, exporters and retailers. It is a term which indicates farming and all other industries, and services, that constitute the supply chain. The business of agriculture is not to be neglected in development priorities, the focus should not only be on urban industrialization, government need to get their role right on building necessary industrial capability and capacity, strengthening managerial capacity and promoting institutional services.

To successfully achieve desired result in agribusiness, understanding and comprehension of the nature of the business and its untapped opportunities is important. Food importation in African countries has to reduce and promotion of local agricultural products has to be carried out adequately. Although there are challenges as regards climate, policies, governance, laws, infrastructure and basic services, the goals to end poverty, hunger, have improved nutrition and sustainable agriculture should be a focus that will ensure motivation. To reduce the incidence of extreme poverty and unemployment, increase in importation, massive migration of rural peasants into the cities, agribusiness needs to be promoted and financially supported efficiently and effectively.

Africa’s projected population by 2050 is 2 billion; the continent has an estimate of more than one- fourth of the total un-fed people in the world. To guide against starvation, rapid rise in food prices, severe malnutrition, food riots, extreme poverty, higher rate of social vices and diseases; there is indeed a crucial need, to exploit the opportunities in agribusiness and make the business of agriculture more productive and profitable like never before so as to achieve improved social outcomes and solve the problem of poverty and food insecurity.

For a better result, Africa needs to take important decisions concerning agribusiness opportunities and act in a better way.

Written by Idowu T.Owoeye


BOI CAP FUND – Revitalizing the Agric cottage industry

 The Agro-Processing industry received a major boost as the Bank of Industry (BOI) launched the Cottage Agro-processing Fund to stakeholders and operators in the Agricultural sector on Thursday September 18, 2014 at a media briefing in Lagos. The BOI Managing director Rasheed Olaoluwa in his speech said the Cottage Agro-processing (CAP) Fund was a new dedicated Fund, the first of its kind by the Bank of Industry (BOI) and is designed to enable BOI being Nigeria’s leading development finance institution play its catalytic role of paving the way for other financial institutions to take up the task of financing agriculture and make changes that will help in revolutionizing the sector in the process demonstrate to other financial institution how to lend to small and medium industries in the perceived high risk sectors of the economy. The fund is targeted at small-and medium-scale industries at the low-technology, labour-intensive end of the spectrum and is expected to finance about 1000 projects at nine percent interest charges, with total management fees of 1%,a tenor of five (5) years with a moratorium of six (6) months. The Fund will also help in creating a total of 20,000 direct and indirect jobs.

“The Fund size of N5billion for the Cottage Agro Processing (CAP) Fund is only a starting point, as we intend to deploy a 2nd Phase after the full utilization of this initial Fund. We want to encourage all SMEs to take full advantage of this Fund.  But as they say, nothing good comes easy.  Loan applicants must come prepared with viable business plans.  We expect them to utilize the loans judiciously, add value and create jobs. “Full and timely repayment of loans granted under this Fund will provide the entrepreneurs with clear paths to bigger project loans from BOI and therefore greater wealth creation opportunities for their companies.” The BOI boss said. Olaoluwa disclosed that applicants for the fund could become beneficiaries within two to four weeks, if they have the appropriate and suitable business plan.

Mr. Rasheed Olaoluwa further stated, “The Cottage Agro Processing (CAP) Fund will provide loans to beneficiaries to establish small scale plants or mini mills to process Nigeria’s agricultural products such as cassava, oil palm, paddy rice, groundnut, yam, maize, sorghum, cocoa, sheanut, plantain, cashew, hides and skin, meat, chicken and fish. These products are grown all over the country and have been selected to ensure an even distribution across Nigeria’s 36 States.”  Mr. Olaoluwa said priority products for each state have been identified and a number of partners have been assembled for the effective operation of this Fund. He said further said the projects financed will be located very close to the source of the agricultural products to be processed and the business plan must address both the primary and secondary sources of energy to power the plant.

The BOI MD/CEO said the bank was going into this in realization that industrialization is a prerequisite for sustainable economic growth and development, adding that funds accruable from the sale of oil cannot bring about the desired growth and generate employment, except the nation embraces technology and industrialise.

Why BOI CAP Fund?

  • Agriculture is the mainstay of the Nigerian economy
  • The sector enjoys the support of the federal government
  • Create jobs and ensure wealth distribution
  • The intervention aligns with the federal government’s Agricultural Transformation Agenda, as well as other industrial sector interventions of the federal government.

Who is the Fund for?

The fund is designed to benefit Limited Liability Companies, enterprises and Coorperative societies engaged in the processing of Agricultural produce into food products and/or raw materials, either for industry use or for export.

Capacity Building/Business Support for the CAD Fund

The Bank of industry (BOI), understanding the need for entrepreneurship know-how for the agropreneurs mandates that all applicants to the CAD fund must undergo entrepreneurial training at any of the existing accredited enterprise Development Centres (EDCs) as part of the loan application process.

Agro Processing as a National Imperative

According to UNIDO, IFAD and FAO (2008), Agro-processing is the processing, preservation and preparation of agricultural production for intermediate and final consumption. Under Nigeria’s Industrial Revolution Plan (NIRP), Agro-processing is one of the four (4) key sectors that have been identified as strategic and in which Nigeria has a comparative advantage. The Nigerian agro-processing industry plays a vital role in the national economic development so therefore it is imperative to explore alternative income generating opportunities to support small holder farmers in agro-processing. The Agriculture sector needs to grow to such a point where we become self-sufficient in food and are net food exporters. It is important to note that agro-processing has multiplier effects in job creation, reduction of post-harvest losses and generating better rural incomes.

Because of the market forces of supply/demand, there are periods of glut and scarcity of food supplies, this could be rectified through the development of an agro-processing industry as agricultural produce are perishable and cannot be stored for long period during periods of glut. Consequently, large amounts of fruit and vegetables are wasted during periods of glut which result in great losses to farmers as well as to our economy.  Unfortunately, our agro-processing industry remains largely underdeveloped because of a lack of investments in this respect.

Agro-processing has backward linkages with the primary agricultural sector (smallholder farms, forestry, livestock, fisheries, etc.) and forward linkages to downstream industries.  For instance, a High Quality Cassava Flour Processing Plant uses cassava as raw materials and supplies its product to Flour Milling Plants. It ranges from upstream/minimally processed activities (e.g. oil processing, saw milling, etc.) to downstream/technology intensive activities (e.g. rubber manufacturing, paper production, etc.).

Checklist of Document Required for Loan Application

  1. Formal Application
  2. Photocopy of Certificate of Registration (Form CAC/BN/A1).
  3. Business Plan
  4. Valuation report on existing assets prepared by an accredited BOI valuer.
  5. Value of equipment to be purchased from a BOI accredited supplier (including invoices).
  6. Source(s) and value of raw materials to be purchased expressed in units.
  7. Two (2) passport photographs of the Promoter (business owner)
  8. Photocopy of the Current Tax Clearance Certificate of the Proprietor.
  9. Means of Identification (i.e. International Passport or Driver’s License or National Identity Card) of the Proprietor.
  10. Bank Statement of the Business Enterprise for six (6) months.
  11. Declaration of Outstanding Liabilities to other Banks and Individuals.
  12. Reference letter from a recognized traditional ruler or authorized Local Government Official.
  13. Provision of a minimum of two (2) External Guarantors to guarantee the loan. The Guarantors must belong to any of the following categories:
    1. Senior Civil Servant (not below the rank of Assistant Director).
    2. Bankers (not below the level of Branch Manager), with minimum of 5 years in service with the Bank (current employer).
    3. Lawyers (SAN).

Individual Guarantor’s Requirements

  1. Letter of Intent to guarantee
  2. Profile/CV of the guarantor.
  3. Means of Identification (i.e. International Passport or Driver’s License or National Identity Card).
  4. Notarized Statement of Net-Worth with affixed passport photographs (Standard Form will be issued by BOI).

The CAP Fund Application Form and requirements to access the fund can be obtained on the Bank of Industry Website: