We want to catalyse investment in Africa’s agric sector
As long as we uphold the ideals of sustainable and responsible investment and trade, women will not be left behind.
In this interview, Bamidele Seun Owoola, Chief Executive Officer, Welcome2Africa International, discusses her work of promoting Africa's agriculture sector with Chibuike Oguh, Financial Nigeria's Associate Editor for frontier markets.
Chibuike Oguh (CO): Congratulations on your recently concluded Agrique Africa Investment Mission To Nigeria (AAIM2017) in Abuja. What was your motivation for organizing the summit?
Bamidele Seun Owoola (BSO): As a Britishborn Nigerian, I grew up in the UK with a one-sided perspective of Africa. This, however, changed when I visited Africa for the first time at age 19. From this visit, I was inspired by the various opportunities in Africa. Quite frankly, I wanted the world to know about these opportunities.
I believed the more people knew about the opportunities, the more likely development in Africa would occur. As my interest in Africa grew, I realized it was important to have some type of sector-focus. So I spent some time researching the various sectors
of African economies. Agriculture stood out.
I didn't understand why many African countries imported so much food that they could be growing themselves. But I have realized that one of the biggest challenges facing agribusiness in Africa is that of finance and investment. Ironically, Africa is a net importer of food and other agricultural products despite its enormous potential, and the many opportunities that remain untapped. 60% of global arable land is found in Africa; 70% of Africa's population depends on agriculture for their livelihood, and the sector accounts for 75% of the continent's domestic trade.
Investment in agriculture, therefore, can contribute to correcting Africa's food-trade deficit, improve food security and help in achieving SDG 2, “Zero Hunger”. Agricultural development also promotes inclusive growth through job creation (including for women and youths), raising incomes, and reducing poverty. To meet the food demand of Africa's rising population, $80 billion annually is required in investment.
Once I realized this, I began to attend many agribusiness conferences. In the years 2014 and 2015, every conference that was about agriculture, I found myself there, irrespective of where in the world it was.
This provided me the opportunity to speak to different investors from around the world to better understand their perspective with regards to agribusiness in Africa. Simultaneously, I was touring Africa, and engaging with agribusiness players. From all these various activities, I realized that there was a need to create platforms that bring together investors, financiers, agribusinesses and all those with a commercial interest in Africa's agribusiness sector. This was the key motivation surrounding the recentlyconcluded AAIM2017 in Abuja. Unlike the previous edition, this one had a specific focus on Nigeria.
CO: What impact do you think was made with the conference which obviously focused on one of the most important sectors in Africa?
BSO: The first impact was that of knowledge-sharing. We had an incredible lineup of speakers with a wealth of practical experience. Some of the speakers came from African Development Bank, Dangote Industries, ECOWAS Commission, Japan International Cooperation Agency, and Central Bank of Nigeria.
Having the speakers share their insights provided an opportunity for the delegates to better understand the opportunities in Nigeria's agricultural sector, and how to navigate around the challenges. In line with the goals of Welcome2Africa International, the event enabled business partnerships to be formed for the betterment of agribusiness in Africa.
CO: What do you see as the major issues in financing agriculture in Africa, based on the proceedings at your event?
BSO: Access to finance is critical for the growth of the agriculture sector. Agriculture in Africa is seen to be a risky sector. Some of the risks include droughts, floods, pests and diseases. There is also the transaction costs of covering large geographical distances.
Lack of understanding of the financial risks and opportunities in agriculture deprives the sector of much-needed funds to boost production, processing and marketing.
Mr. Aliyu Abbati Abdulhameed of Nigeria Incentive-based Risk Sharing System for Agricultural Lending discussed how NIRSAL engages with the entire value chain and provides technical support. Blended finance as a possible solution was also brought to the fore. The hybrid fund structure combines public, philanthropic and private capital. The non-commercial capital acts as a firstloss cushion, with the objective of leveraging larger volumes of private finance into markets where risks are high and financial returns uncertain, but there is the possibility of major positive social impact. This insight was provided by Sunny Nyemah, Chief Investment Officer/ Director at Allianz International Holdings.
CO: AAIM held in Abuja after hosting the conference in London and Ghana. As you turn to Frankfurt, Germany for the next edition, what would be your objectives?
BSO: The objective of all the conferences is to catalyse investments in Africa. We have decided that this event will be held in Frankfurt for several reasons. Frankfurt is an alpha world city and a global hub for finance and commerce. Frankfurt is also home to the German headquarters of Nestlé, the world's largest food company, located in Niederrad. Other important food companies are Ferrero SpA (German headquarters) and Radeberger Gruppe KG, the largest private brewery group in Germany. Germany as a whole has a huge commitment to the development of Africa. And Frankfurt is home to the $150 million Africa Agricultural Trade and Investment Fund.
Apart from the networking opportunities for all participants, financiers at the event will have an exclusive opportunity of being presented with pre-vetted exporting agribusinesses seeking $3 - $15 million in growth capital.
CO: Your organizing these summits expands the footprints of women in the value chain of agriculture. But as agriculture turns from a development endeavour to big business in Africa, how do we ensure women – who have for long been in subsistence farming and petty trading of produce – are not left behind?
BSO: A core goal of Welcome2Africa International is to catalyse investments into Africa's agribusiness sector; but not just any type of investments. We are keen on responsible and sustainable investments. We want to facilitate investments that adhere to the Environmental, Social and Governance (ESG) principles. We want to promote positive impacts and avoid negative ones.
In Africa, 80% of the agricultural production comes from smallholder farmers, who are mostly rural women. Some of my favourite agribusinesses happen to be led by women. One of the key discussion points in our forums is that of responsible and sustainable investments. Therefore, as long as we uphold the ideals of sustainable and responsible investment and trade, women will not be left behind.
CO: What are the other activities of your organization?
BSO: The backbone of our services is knowledge-sharing and capacity development. We have put together a collection of investment summits, trainings, workshops, stakeholder dinners, trade, business missions and briefing sessions all centered on growing the network of investors, donors, and companies with a commercial interest in the development of agribusiness in Africa. All this supports our brokerage, match-making and introductory services.
For those interested in having access to agriculture commodities in Africa, our network and on-the-ground presence put us in a good position to support their sourcing goals.
Bamidele Seun Owoola, Chief Executive Officer, Welcome2Africa International