Agritech: Why Nigeria Needs Urgent Move Towards Commercial Farming

Oshone Anavhe

In 2018, Nigeria conducted a National Living Standards Survey in collaboration with the World Bank, utilizing data from all states in Nigeria except for Borno due to insecurity. Insights gathered from the survey revealed that the highest levels of poverty in the country were seen in households that solely engaged in subsistence agriculture.

According to Nigeria’s former Statistician-General and CEO of the National Bureau of Statistics (NBS), Dr. Yemi Kale,  “This doesn’t mean agriculture is a bad thing. It simply means the way we do agriculture in Nigeria has to be improved so that it does not become synonymous with poverty or we have to find other sources of income for farmers to supplement their standard of living.”

This underscores an established notion that subsistence agriculture alone can never sustain any household in Nigeria, a worrying fact as according to the Food and Agriculture Organization of the United Nations (FAO), over 70% of Nigerians engage in the agriculture sector mainly at a subsistence level.

The average smallholder farmer in Nigeria makes use of crude implements and tools to grow food to take care of their needs, before selling off the excess, if any. It appeals to farmers in rural communities because it allows for self-sufficiency and participation in informal trade via these markets to obtain other needed goods.

The challenges with subsistence farming are its heavy susceptibility to climate change, labour productivity, and a severe lack of formal education on key aspects. As such, it has stifled agricultural productivity in Nigeria, resulting in declining levels of food sufficiency and increasing dependence on food imports which has affected the agricultural sector’s contribution to the national GDP.

As of 2021, Nigeria registered a contribution of 23.36% by the agriculture, forestry, and fishing sectors to its GDP. On the other hand, Sierra Leone registered the agricultural sector’s highest contribution to the GDP in Africa, at almost 60%.

Experts have argued that the biggest factor affecting the output gap between rich and poor countries is the gap in agricultural labour productivity. Furthermore, development economists have pointed out that the low agricultural productivity in poor countries stems from the persistence of small non-mechanized farms (subsistence farming).

Moving From Subsistence To Commercial Farming

It is a known fact that Sub-Saharan Africa’s agricultural production significantly underperforms when compared to the rest of the world.

With 34 million hectares of arable land as of 2019, the largest in Africa and seventh largest in the world, one would assume there would be a booming agricultural sector in Nigeria, thereby challenging high poverty rates, unemployment, food insecurity, and food export dependency. Yet, in 2018, Nigeria surpassed India as the world’s poverty capital, with around 87 million people living in extreme poverty. Furthermore, Statista estimated that by the end of 2022, the unemployment rate in Nigeria would reach 33%.

“A whooping 795 million people in Africa were moderately or severely food insecure in 2021. Of those affected by moderate or severe food insecurity, more than 40% (about 322 million) faced food insecurity at severe levels meaning that they had run out of food and had gone a day or more without eating, ”Business Day reports.

As the world faces an economic downturn, the resulting impacts of the COVID-19 pandemic forced the slowdown of several industries and severely devastated already-struggling economies, there is a greater focus on developing national capabilities and ways in which to revive stunted economies.

For Nigeria, agriculture plays a critical role in transforming its economy, alongside achieving other essential development goals like improving nutrition and ensuring food security. As such, to accelerate economic growth, urgent agricultural transformation must become a reality. This can be achieved only when Nigeria successfully advances its largely subsistence farming-focused sector towards sustainable and structured commercial farming.

When Nigerian farmers begin to move from planting decisions based on their survival needs to planting decisions based on economical and logical reasoning, there lies the foundation for exponential trade growth, resulting in an enlarged economy and sustained food security.

To achieve this, there needs to be deliberate investments and commitments by agents in both the private and public agricultural sectors. In the long term, this will result in a return to time past when Africa boasted of complex and thriving agricultural systems which enabled food production and security.

Agritech And Impact On Commercial Farming

Agricultural technology (Agritech) is the use of technology in agriculture via products, services, or applications to improve yield, efficiency, processes, and profitability.

Nigeria, in particular, has been very accepting of the sub-sector, with increasing numbers of companies aiming to address the challenges of the agricultural sector via the use of technology. In the last decade, Nigeria has become a vibrant Agritech market in Sub-Saharan Africa, a fact seen by increasing investments despite a wariness due to the perceived risk and the opportunity cost compared to other sectors.

For example, between 2021 and 2022, five Nigerian Agritech companies secured $84.05 million collectively, owing to their innovative digital solutions to address Nigeria’s agriculture problems. The companies and the respective funding secured were: Hello Tractor ($1 million), Vendease ($3.2 million), Releaf ($4.2 million), Agricorp ($17.5 million), and ThriveAgric ($58.15 million).

Founded in 2017 (and fully operational since 2018), ThriveAgric secured not only the largest funding in the Agritech sector but was also one of the top Nigerian startup fundraisers in Q1 2022. They received $56.4 million in debt funding from commercial banks and institutional investors and a $1.75 million grant to support 50,000 smallholder farmers growing rice and maize in Nigeria.

Espousing a philosophy they label – ‘Farmer Obsession’, ThriveAgric states that they seek to own and support wellbeing in all areas of smallholder farmers’ lives with the end goal of promoting food production and security. According to Co-founder and Chief Executive Officer, Uka Eje, ThriveAgric helps farmers scale their productivity and be positioned to service more value for their efforts, thereby resulting in the sustainable growth of Africa’s agricultural sector and stronger food security, manufacturing, and trade.

This is an ambitious goal, but it seems that they truly understand the urgent need for development in Nigeria’s agricultural sector to help farmers scale their production and move us away from subsistence farming. They recently announced the launch of an initiative aimed to achieve just that.

Labelled the ThriveAgric Marketplace, they aim to provide access to quality and affordable farming inputs & tools like seeds, fertilizer, crop protection products, grains, water pumps, etc., to boost local farm produce production. ThriveAgric also plans to aggregate large volumes of produce in high demand from smallholder farmers to enable supply and trade to domestic & global offtakers.

These are just a few ways in which ThriveAgric and other Agritech contemporaries are challenging the issues in Nigeria’s and Africa’s agricultural sectors, leveraging technology as they do so. Nonetheless, they cannot transform the industry and our communities alone. Greater investments by the government and the public are needed.

Previously, there was little to no sustained effort to develop commercial farming skills or functional value chains, which severely hindered the transition from subsistence to commercial farming. With the above initiative and many more to come from the Agritech sector, we become one step closer to building a thriving and sustainable agricultural system, securing food security, and achieving the Sustainable Development Goal (SGD) 2 which is to “End hunger, achieve food security and improved nutrition and promote sustainable agriculture”.

To do so, there needs to be a recognition of the interlinkages between supporting sustainable agriculture, ending rural poverty, and empowering small farmers.

Oshone Anavhe is the Vice President Operations, ThriveAgric