The general perception about agribusiness being a ‘dirty job’ that requires you owning and cultivating your own farm with hoes and cutlasses is gradually changing thanks to startups powered by technology. This wrong perception has discouraged many young Nigerians from venturing into farming; they would rather chase the limited white-collar jobs available. However, with advancement in technology, this is no longer the case as you can now confidently be in the business of agriculture without necessarily getting ‘dirty’.
The present government is also committed to agriculture and it has come up with various policies to protect local farmers and boost local production of some of the crops grown in Nigeria. The government has promised to ban the importation of rice this year and also placed a restriction on crude palm oil importers’ access to forex in the interbank market. These policies are geared towards boosting local production, hence creating immense opportunities for local farmers.
Here are some agritech startups that are worthy of investments in 2018.
This is Nigeria’s first digital agriculture platform which is focused on connecting farm sponsors with real farmers in order to increase food production while promoting youth participation in agriculture.
This agritech startup is currently disrupting the agriculture ecosystem in the country by connecting small-scale farmers with investors using their platform App which is available on Google and Apple app stores.
The farmers are provided with good seedlings, implements, advice and training from agriculture extension officers on better agricultural practices for different types of crops and better production methods.
Farmers and sponsors all receive a percentage of the profits on harvest. The platform also makes provision for insurance cover for all existing farm projects, so that in the event of unforeseen circumstances, the sponsors’ capital can be refunded. The insurance covers only the initial sponsorship capital, as it does not cover the return after harvest. The platform uses the sponsors’ funds:
- To secure the land,
- Engage the farmer,
- Plant the seeds,
- Insure the farmers and farm produce,
- Complete the full farming cycle,
- Sell the harvest and then,
- Pay the farm sponsor a return on their sponsorship.
While this farm process is ongoing, the farm sponsors are able to keep track of the full-cycle by getting updates through texts, pictures and videos.
How it works
- Select to either become a Farm Sponsor or Farm Follower and create your Farm Sponsor profile.
- Go through the profiles of the farms which are spread across the country. These include cassava farms, tomato farms, chicken farms, and maize farms. The farms have different tenures/contract periods and varying ROI from 13-25%.
- Sponsors can watch farmers grow the farm and engage them at will as updates are sent through videos/pictures/timelines.
- At harvest, farm products are sold to the consumer markets and the profit is then split between the farmers, farm sponsors & Farmcrowdy.
This is another startup that is set to disrupt the agric value chain by empowering under-financed farmers across Nigeria. The platform is a farmers’ marketplace that connects local farmers to investors. The platform provides access to global best agricultural practical advice through SMS to local farmers without internet. Farms under their platform range from rice to cassava, potato and maize farms. Generally, ROI ranges between 10% and 30% depending on the farm and crop. The platform has formed partnerships with the International Institute for Tropical Agriculture (IITA) for improved seedlings and insurance companies that provide insurance cover for the risks.
How it works
- For farmers seeking investments, they simply sign up on the website, and get connected to individual and corporate investors for funding within the estimated fund raising duration before cultivation.
- After harvest, Growsel also helps farmers provide partner buyers who are always available to buy out produce from farms.
- Farm updates from weeding to planting, fertilizing and chemical applications, and harvesting are provided via photos, videos and chats in real time from surveyors in the field using their exclusive Farm Monitory feature.
- Investors in turn can browse through available farming projects; select a crop and farm of their choice and invest in line with their budgets and estimated ROI.
This is an agritech startup that looks promising in the agriculture value chain. They work with farming communities and drive real change by providing what farmers need to be better and happier people. They also deploy technology to increase yield and productivity as extension workers use an app which gives daily information; farmers also get automated messages. The farms range from poultry to rice, groundnuts, soya-beans, sorghum, and maize farms. The farms are spread across the federation. All farms have insurance covers such that regardless of what goes wrong, subscribers’ capital is insured.
How it works
- Decide to subscribe to a farm by creating an account. You can use your email to get
- Choose a farm or farms and the quantity you want, then proceed to pay the subscription fee. This can be done online and with the aid of standby staff to ease you through the process. Payment will be reflected in your account immediately.
- Get multimedia updates from happenings on the farm live; the updates will help you keep track of events and offer practical knowledge on the process of production, from start to finish.
- Upon successful harvest, expected returns of proceeds from the produce are distributed to the subscribers all within the stipulated time. Expected returns are as stipulated in the terms of agreement.
These startups are not only positively impacting the lives of local farmers and their families, but making huge profit for farm sponsors and investors. Definitely this year looks bright for agritech startups.
Fidelity Bank Plc must cover the chink in its curtains to keep rising
Fidelity Bank Plc follows the narrative of top tier-2 banks, which have had better or easier years.
The Nigerian banking sector has consistently been one of the most profitable sectors in the Nigeria Stock Exchange market. However, in 2020, Deposit Money Banks (DMBs) have faced a flurry of impediments, which may have affected their solidity.
With reduced income from fee and commission implemented at the start of the year by the Central Bank of Nigeria, the paucity of foreign currency for international transactions, the resulting economic contraction from dire effects of the coronavirus pandemic, and the consequent operational constraints of keeping employees safe, 2020 is obviously fraught with numerous disorders for banking institutions.
For most, it hasn’t exactly been a year for growth at all, more like a walk in the woods, where improvements to bottom-line is almost unexpected. This period, many banks seem content with simply surviving and fundamentally matching their previous feats.
Fidelity Bank Plc follows the narrative of top tier-2 banks, which have had better or easier years. The bank generated a 2020 9M PAT of N20.4billion, rising 7.08% from the corresponding figures last year, but drilling solely into its results in Q3’2020 and its exact comparative period in 2019, the bank suffered reduced interest revenue, reduced fees and commission, reduced profit before tax, and reduced after-tax profit.
Fidelity Bank Plc concluded Q3 with a profit position of N9.1billion, 13.7% decline compared to its position in 2019 y/y. PBT reduced by 12.9% from N10.8billion in 2019 to N9.4billion this year. Gross earning in Q3 was only N49billion as against N57billion in 2019 – plummeting 14%.
The Group Chief Executive Officer of the bank, Mr. Nnamdi Okonkwo, commenting on the result said: “Our 9 months results reflect our resilient business model, particularly in a very challenging operating environment. We worked closely with our customers to gradually recover from the economic impact of the pandemic and the attendant effect of the lockdown. The drop in gross earnings was due to the decline in interest and similar income, caused by lower yields and drop in fee income.”
True cause of the reduction in earnings
DMBs generate gross earnings under three primary subheads: Interests earned, Fees and commission, and Other operating income. Fidelity Bank Plc generated a combined total of N150.8billion for the period ended September 2020 from these three categories, compared to the N158.5billion in the corresponding period last year.
Deeper analysis reveals that this rising tier-2 bank has seen more deficit in revenue from fee and commission compared to the other aforementioned gross-earnings’ generating-sources within this period. Interest earned dropped by a difference of N4.3billion, while revenue from fee and commission saw a decline of N4.8billion from N14.5billion in 2019 to N19.3billion YoY.
Fee and commission as a component of gross earnings
Card maintenance fees, account maintenance fees, commission on remittances, collect fees, telex fees, electronic transfer fees, amongst others, represent the plethora of channels that makes up income from fee and commission.
The real insight this particular component of gross earnings provides is that a spike in revenue generated indicates increasing/increased customer account activity. The more a customer maximizes the usage of an account’s product and facilities, the more the revenue earned from this segment. Thus, earnings from fees and commissions are so overriding due to their apparent controllability.
For example, a bank could make the decision to purely pursue and aggressively drive the usage of its ATM debit card and promptly see the revenue from commission rise. Furthermore, an increased rate of card production and collection necessitates usage and consequently means more money is earned as card maintenance fees.
The fact that gross earnings reduced mostly from fees and commissions should be a telling concern for the Management of Fidelity Bank Plc. Post covid-19 would birth the dawn of a new era for business processes. The management must guarantee the usability of its electronic banking channels, promotion of its cards, and with urgency, implement improved service delivery mechanisms to ensure that it is the first port of call to customers for general payments and remittances.
These measures are of grave significance in the bid to bridge its widened fee and commission income gap.
Holistically, in the 9 months ended September, it is worthy of note that the bank made certain advancements. Customer Deposits, Net Loans and Total Assets all grew in double digits. Customer Deposits grew by 22.3% from N1.2billion to N1.5billion, Total Assets also rose by 21% from N2.1billion in 2019 to N2.5billion, and Net Loans rose by 12.9% to N1.3billion from N1.1billion.
Airtel is paying up its debts
Airtel’s annual report revealed that the company has a repayment of $890 million due in May, as well as, an installment of $505 million due in March 2023.
Airtel’s presence in 14 countries from East Africa to Central and West Africa would have been impossible without relevant financial investments. But, while the funds have been key to its growth in the past few years, many of its financial obligations are starting to mature quickly.
The Covid-19 pandemic has had negative economic effects on different sectors of the economy; however, the resilience of the telecom sector is evident in an increase in Airtel’s income. The overall performance of Airtel increased with a revenue growth in constant currency of 19.6% in Q2 compared to 16.4% recorded in Q1, while revenue on reported basis increased by 10.7% to $1.82 billion, with Q2 revenue growth of 14.3%.
Unilever Nigeria Plc: Change in management has had mixed impact
9 months into the change of management, Unilever Nigeria Plc’s performance in Nigeria has been largely underwhelming.
Change in the management of a company is never a walk in the park. Transitions usually take time to yield the desired results. Organizations can look to past successful managerial transitions for inspiration, but not for instruction because there is no defined playbook. The decision to replace Mr Yaw Nsarkoh, who served as the Managing Director of Unilever Nigeria Plc until the end of 2019 was plausible, but adjustments were never going to be an easy task.
Mr Nsarkoh had served as Managing Director of the company for 5 years and steered the course of its proceedings with remarkable skill up until the financial performance disaster which culminated in his resignation on November 28th, 2019.