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.

Financial Nigeria Magazine - - Contents -

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

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