Unfortunately, today, much of this potential remains unrealised, with the continent spending over $35bn annually on importing food. In my country, Nigeria, the agriculture sector accounts for 22% of the nation’s GDP, and 75% of non-oil exports – representing a golden opportunity to become a global powerhouse in food. With a population of 170m and a young, cheap labour force, it has 84m hectares of arable land, of which only 40% is cultivated, and is home 260bn cubic metres of water with two of the largest rivers in Africa.
With these attributes, there is absolutely no reason Nigeria should be spending over $5bn annually – as it currently does – importing food that can otherwise be grown locally. Adding value to agricultural produce through processing is really where the attraction lies for most individuals seeking to truly tap into Africa’s consumer markets. Processed foods represent a $2 trillion industry globally, yet our continent barely registers. Instead, raw agricultural produce continues to be shipped out of African nations, processed overseas, and exported back at high premiums.
Harnessing this untapped potential is a key priority for us in Nigeria, where I spent the last three years as the senior investment advisor to the now-former agriculture minister, Akinwumi Adesina. The experience underlined the critical role of the private sector in transforming African agriculture, and seeing the progress we were able to make in just a few short years inspired me to become a private investor in the sector.
After leaving government, I established Agrolay Ventures, an investment firm targeting early-stage agribusiness and food-related companies and projects that seek to redefine the food production and retail opportunity across Africa’s large consumer markets.
The company tackles key challenges such as access to finance – a key constraint for micro, small and medium-sized enterprises – a lack of youth engagement, and the perennial issue of value addition. Agrolay Ventures invests seed capital in existing companies, as well as incubating its own.
These include the Nuli Juice Company, a producer of healthy beverages that use locally sourced fruits and vegetables from farms across Nigeria, and Agroblends, an innovative food company that celebrates African heritage by turning popular homemade African food recipes into ready-to-eat meals that are shelf-stable.
These two businesses reflect a dedicated farm-to-table approach, creating world-class food products made from home-grown agricultural produce. The companies create ready markets for Nigerian farmers, locally process Nigeria’s agricultural crops to enhance value, and brand these products for the country’s fast-growing consumer base. It is vital to encourage Nigerians, especially its large youth population, to see beyond the challenges of operating agribusinesses in Nigeria, and instead, take bold steps to be a part of an ongoing movement, one that will restore Nigeria’s dominance in agriculture. Building up our private sector base in the sector will be vital in achieving this.
Ada Osakwe is the Chief Executive of Agrolay Ventures, a 2014 Archbishop Desmond Tutu Leadership Fellow, and included in the 2014 Forbes Youngest Power Women in Africa list.
