Prioritise funding to agricultural startups, expert urges govt

Sat, May 18, 2024
By editor
4 MIN READ

Agriculture

MRS Deina Mayaki, Co-founder of Agriarche Ltd., an agriculture consulting firm, has emphasised the need for government to prioritise funding for African agricultural startups, highlighting the sector’s potential and challenges.

Mayaki said this in a statement made available to the News Agency of Nigeria (NAN) on Friday in Lagos.

NAN reports that Agriarche bridges the gap in Africa’s agriculture, by empowering farmers with traceability, visibility, and profitability through innovative technology.

It builds trust throughout the food chain, connecting farmers to markets, boosting incomes and cultivating a flourishing food system for all.

Mayaki highlighted the insufficiency of funding directed toward the agriculture sector, despite its role in employing over 60 per cent of the continent’s population.

She noted that in the first quarter of 2024, 50 million dollars was attracted to agriculture as against  151 million dollars directed toward transport and logistics and 105 million dollars to Fintech.

According to her, these represent 11 per cent, 32 per cent 23 per cent when compared with figures recorded in the same period of 2023.

She further lamented the lack of prioritisation for agricultural funding, citing a PWC report that showed less than 3.8 per cent of commercial bank funding went into agriculture.

According to her, despite the agriculture sector’s immense potential, access to finance remains a major hurdle, particularly for smallholder farmers.

“Agriculture claims to have about 60 per cent to 70 per cent of the African population employed by it.

“If we are serious about feeding the nation and being self-sufficient in food, then we should invest in agriculture,” Mayaki added.

The expert restated the importance of channelling adequate funding into agriculture, pinpointing that the issue waName(required)Email(required)WebsiteMessage

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s not lack of capital but rather the structural and delivery mechanisms in place.

She lamented the sector’s informality and fragmentation, leading to a dearth of feasibility throughout the ecosystem.

“Agriculture should attract the necessary funding. We need to prioritize the funding that is coming into agriculture.

“The government can quote the 2015 subsidy programme and the 2020-2023 Anchor Borrow Programme that was done, but the capital itself is not the problem; it is the way it is structured and delivered,” she said.

Mayaki stressed that agriculture encompasses not just farming but also production, distribution, logistics, and last-mile delivery, with technology playing a pivotal role in enhancing visibility and addressing these challenges.

“The agriculture sector in Africa is very informal, very vague, highly fragmented. And this promotes a lack of feasibility across the ecosystem.

“Agriculture is beyond farming, it entails production, distribution, logistics, production, and last-mile delivery. This involves hard and soft tech along the line, and we advocate for technology because it helps to enhance feasibility.

One of the challenges is this vagueness because people are not confident to structure the financing for the ecosystem and to know what the needs are,” she said.

Highlighting the obstacles hindering funding access to the sector, Mayaki cited insecurity in rural areas, the prevailing structure of agriculture in Africa, and the absence of a credit system for farmers.

She also underscored the significance of financial inclusion, noting that it extends beyond mere access to credit but encompasses digital and financial connectivity to global opportunities.

Mayaki argued that the lack of financial inclusion perpetuates a vicious cycle wherein financial inflow into the sector is stifled, ultimately impacting millions of farmers.

“Lack of access to finance, inadequate technology and concerns around insecurity in major rural areas, where agricultural activities take place, are some of the factors affecting funding to the sector.

“Farmers are the major actors, but they are financially excluded. And I would like to say that financial exclusion means that they are digitally and financially excluded so they have no way to connect to this global opportunity,” Mayaki said. (NAN) 

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May 18, 2024

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