The Buhari administration has set two targets for farming: to reduce the country’s food import bill — currently about $6bn a year, according to the United Nations — and to increase farm exports, reducing Nigeria’s dependence on oil as a source of foreign currency earnings.The Buhari administration has set two targets for farming: to reduce the country’s food import bill — currently about $6bn a year, according to the United Nations — and to increase farm exports, reducing Nigeria’s dependence on oil as a source of foreign currency earnings.
Kola Masha, managing director of Doreo Partners, an impact investment company, believes the challenges and opportunities are far greater.
“We are driven by the problem of insecurity,” he says. Nigeria’s working age population is growing at more than 3.5m a year, according to the National Bureau of Statistics. Unemployment rose from 21 per cent in 2010 to 35 per cent last year, with youth unemployment at more than 60 per cent. “The result is an economic crisis and Boko Haram,” he says. “We urgently need to create as many jobs as the entire population of Germany.”
Nigeria has somewhere between 15m and 30m smallholders, producing an estimated 95 per cent of the country’s $90bn farm output. They are subsistence farmers, often with less than a hectare of land.
Through Babban Gona (“great farm” in Hausa), a franchise system that organises smallholders into co-operatives, Mr Masha plans to turn subsistence farmers into commercial ones, creating jobs and giving young people a reason to stay on the land. The model is simple. First, farmers are selected for their leadership qualities and willingness to adopt new techniques, using interviews and tests that are designed for people who are not literate. Then they are trained in management and conflict resolution and given help to form small co-operatives. Next comes training in commercial farming.
Each participating farmer receives a loan of $1,000 for a year’s worth of inputs such as seeds and fertiliser. Every stage of the crop cycle — mostly maize and rice — is overseen. Farms receive frequent visits from a supervisor, who logs a wealth of information on a mobile app, including data from satellite monitoring of chlorophyll levels in crops. At harvest, Babban Gona provides marketing services, including warehousing, helping to ensure good prices.
This year, the initiative won a Skoll Award for social entrepreneurship, for, among other things, raising its farmers’ yields and incomes to 2.3 times the national average. Mr Masha says more than 99.9 per cent of its farmers have made their repayments on time, and that Babban Gona has had positive gross margins from inception, positive underlying earnings since 2015 and positive net income since last year.
Babban Gona’s operations are concentrated north of Zaria in Kaduna State in northern Nigeria. Mr Masha moved there in 2012 and began trying to recruit farmers. At first, he says, it was a failure. “We were offering training, finance and premium prices for their crops,” he says. “Most of them just said, ‘Yeah, yeah . . .’
“Now, Babban Gona is turning away many more farmers than it can recruit. Last year, there were 8,000 members. This year, there are more than 20,000, farming 14,000 hectares. Mr Masha expects to have twice as many members next year; his target is 1m by 2025, providing livelihoods for 5m people, requiring an annual $1bn in working capital.
The village of Sabon Gari Gazara, about an hour up the road from Zaria, is one community that has benefited.
Umar Magaji, a 35-year-old farmer, owns 1.5ha and, as of this year, leases another 2.5ha. He plans to lease a further 2ha next year. Thanks to Babban Gona, he says, his yields are two to three times what they once were.
He has refurbished his house, bought a motorcycle and enrolled his children in the village school. The year after next, he hopes, he will make the pilgrimage to Mecca. “In the village, we measure poverty by the number of people buying food in small quantities,” he says. “You don’t see that any more.
“When the FT met Mr Masha in Lagos in late September, he had just returned from London and Paris and was about to fly to Amsterdam in search of funding.
Ladi Balogun, chairman of Tenet Investment Company in Lagos, says he is close to reaching a deal that would fund the scheme to reach up to 200,000 members. How far can it go? Mr Masha talks of extending the scheme across Africa, providing 200m jobs financed by $150bn of working capital, backed by guarantees from African governments.
Babban Gona is not the only scheme of its kind. Mira Mehta has a similar project growing tomatoes — a higher risk and higher margin product — in the same region. Ms Mehta, whose Tomato Jos farmed its first 35ha this year, also has big ambitions but she worries that land constraints will become a problem before long. Small farmers, Ms Mehta argues, can produce only so much. “The issue arises when land becomes scarce. You will hit that problem sooner than you think,” she says.
According to the UN’s Food and Agriculture Organization, Nigeria uses about half of its 71m hectares of available agricultural land. In Ms Mehta’s experience, however, land classed as “available” often has people living on it. It is one of the challenges to food security and rural employment that Babban Gona is trying to find a way around.