The rate of youth unemployment and insecurity in the country is alarming. But Lola Masha, the co-founder/Executive Director of Babban Gona, says information technology (IT) and agric sectors, hold promise of huge job oppotunities. Masha, who was country manager for OLX when she led various product partnerships across Emerging Markets, Middle East and Africa, and Emerging Markets at Google, says efforts of the Central Bank of Nigeria (CBN) in the agric sector will lead to sustainable growth in the sector. LUCAS AJANAKU reports.
What’s your reaction to the border closure by the Federal Government?
Hopefully, the closure of the borders will allow for a focus on locally produced goods, and help contain major revenue losses.
What further measures should the government take to pursue its diversification agenda and grow the non-oil sector?
The decline in oil prices has been a strong impetus for the government to diversify the economy, and you will agree that some steps have been taken in that regard. The major sector we see this diversification agenda playing out in is in agriculture. However, there are other things that can contribute to our economy. Take the example of western countries that have built their entertainment, IT and media industries. Growing the non-oil sector is a feat that has also been accomplished by emerging market countries such as Brazil, and this is quite similar to the Nigerian context because they are a resource rich country that is succeeding in exploring other sectors aside from the oil-sector.
The population of the country is exploding without concomitant efforts to create jobs for the predominantly youthful population. What’s the way forward?
I believe concerted efforts are key, and at Babban Gona, we envision that agriculture will play a major role in creating these jobs. Agriculture is an essential driver of economic development, contributing up to 22per cent of Nigeria’s gross domestic product (GDP) and holds great opportunities for job creation in Nigeria. However, a lot still needs to be done to harness the potential the sector possesses. Vital to this is the role played by smallholder farmers who are typically rural dwellers, with little or no land holdings, dependent on traditional methods and tools but accounting for up to 80per cent of production in the sector. We are recreating the narratives around agriculture and helping to make it attractive to the youth.
Youth (25 and under) in Africa are estimated to be over 60 per cent of Africa’s 1.2 billion people, and so we need to solve this urgent need to harness the potential of this segment of the population and create millions of jobs as they enter into the labour market. Between 2010 and 2030 alone, the estimated number of jobs required was pegged at 80 million jobs. When this potential is harnessed through agriculture, the African continent is brought closer to attaining the goal of food security and ending hunger.
How would you describe the agricultural landscape in Nigeria?
The Nigerian agricultural landscape is still largely untapped, but bursting with possibilities. This transitional, evolving state is largely due to the fact that growth in the sector is driven by farmers growing for subsistence. Even though there are a few large farms, as well as a few innovators who adopt more modern practices such as hydroponics, aeroponics, aquaponics and others, the majority of production is still executed by smallholder farmers. And because these smallholders are constantly plagued by a myriad of challenges ranging from inaccessibility to credit, quality inputs and other support, the Nigerian agricultural sector presents an exciting opportunity as solving these smallholder challenges will help in transforming the sector and produce positive rollover effects within the economy as well.
With its current state, do you think it can assure food security?
The Nigerian agricultural sector may not currently assure food security, however, I have no doubt that we can achieve this if we make it a priority to increase productivity within the sector. Like I mentioned earlier, smallholders are the backbone of this sector, with an average farmer owning a field size of 0.5-0.7Ha. If these individuals are empowered through training, provided support through planting and connected with the markets, their productivity and incomes can be impacted significantly such that they can scale their land holdings, and produce even more.
What’s your scorecard for the various intervention programmes by the banks?
I see the banks taking a proactive stance in improving the agricultural sector, and I envision that this will improve in the coming years. For instance, the Central Bank of Nigeria and the Bank of Industry have some fantastic initiatives which we have had the privilege to be a part of (e.g the Anchor Borrowers Programme which served us for two seasons). Other innovative interventions from and partnerships with commercial banks have provided much needed liquidity that enable farmers to get relatively low-cost credit.
What’s the role of technology in the mix?
Technology has a huge role to play in enabling the growth of this sector. I believe that through concerted efforts, technology can be instrumental in driving critical aspects of growth. For instance, technology can be leveraged to improve germination rates or planting efficiency thus improving farmer productivity. It is also an essential part of achieving financial inclusion, by connecting farmers in hard to reach places with the financial services they require. In general, technology makes processes all round faster and smarter, thereby reducing loss and waste. The role of technology cannot be over-emphasised.
How does the Babban Gona initiative speak to some of the challenges facing the agric sector?
We run an innovative model designed to serve the bottom of the pyramid. This is because we believe that agriculture is Africa’s job creation engine and our model is playing a critical role in transforming agriculture in Nigeria. Through our model, we offer a suite of services to smallholder farmers that helps them to overcome the challenges of fragmentation and low economies of scale. We all know that despite being the backbone of the agricultural sector, the majority of smallholder farmers have for long remained impoverished, earning less than $2/day. To tackle this, we have developed a model that addressed the three key inhibitors to the profitability of smallholder farmers ie high costs of production, low yields and low prices at harvest. Our services include: training and development; financial credit; agricultural inputs; and harvest, storage and marketing services.
These services we provide our farmers in the form of low-cost credit has historically enabled our member farmers to significantly improve their yields and incomes to around 2x and 3x the national average.
Since 2012 when this initiative was launched, what has been its impact on the agricultural sector by way of increase in smallholder earnings, job creation and others?
We have embarked on strategic partnerships to develop and scale our model since 2012. Till date, our organisation has delivered around 140,000 loans to smallholders who have produced over 200,000 MT of grains with a repayment rate of up to 99 per cent. Interestingly, by 2015, Babban Gona grew to become the largest single maize producing entity in Nigeria. From our modest beginnings of +100 farmers in 2012 we have made remarkable progress, franchising an average of 20,000 member farmers in our current planting season. The average yields per hectare our members have consistently achieved is a strong 2x increase in comparison to the national averages. This impact has not been limited only to our member farmers, but also extends to their families and communities. We have developed schemes to support female relatives of our Trust Group members through innovative programmes such as our Last Mile Retailer. Currently, we offer our services to smallholders across five Northern states and nine Hubs across in Katsina, Kano, Kaduna, Bauchi and Plateau.
How do you impact on the farmers?
We are a social enterprise, and so impact is front and centre for us. We offer innovative products to our members that dramatically increase their net incomes by directly impacting all the key indices of their productivity such as their yield, input costs and commodity prices after harvest. The higher yields are achieved, first of all, through the individualised holistic input package which we provide on credit. Furthermore, we enhance the human capital of our members via our Farm University Programme that provides access to critical knowledge to adopt best agronomic practices and become more commercial in their outlook to farming. This increase in net income has enabled members to make significant investments in improving their children’s education, health/nutrition, and invest in additional farm land and livelihood enhancing assets. A significant number of our members have invested in assets such as home improvements, maize grinding machines, cars, trucks etc. Also, following harvest we obtain premium prices for our members through delayed sales. A heartwarming reminder for us of the significance of our work is the story of one of our members who was able to use the profits generated as a Babban Gona member to purchase two cows and a cart. Out of appreciation to Babban Gona, he painted on the side of his cart “Babban Gona, Maganin Awo, Allah Yadda”, which means “Babban Gona , the medicine for hunger, God provided!
How do you recoup your credit and at what interest rate?
Through strong risk mitigation systems we have put in place, we have been able to maintain repayment rates of up to 99 per cent. This is also the reason why we can price our credit to our members at a significantly discounted interest rate compared to traditional microfinance that delivers credit at 30per cent to 60per cent APR.
Do you think the graduates churned out yearly really align with the required current skills set?
Yes and no. I think there has been a decline in the educational sector, given the incessant strikes and other challenges. However, this could also play out in producing resilience, a skill that is quite vital to succeeding in tough situations. With respect to the soft and hard skills, some things are not taught within the four walls of a classroom. What I think is necessary is a paradigm shift amongst our graduates and youth in general to put in the work necessary to develop themselves and be patient to see the results of their hard work.
What’s the way forward?
I believe in taking the right steps in the right direction. Nigeria as a country needs to concentrate on its latent potential, especially in agriculture.