Akinwumi Adesina, minister of agriculture of the Federal Republic of Nigeria, speaks during the annual meeting of the Clinton Global Initiative (CGI) in New York, U.S., on Tuesday, Sept. 25, 2012. Photographer: Jin Lee/Bloomberg *** Local Caption *** Akinwumi Adesina

Lagos - Can investors get rich by backing Nigerian agriculture?

An increasingly loud chorus of voices says that answering this question may be the most pressing challenge facing Africa’s most populous country, ahead of defeating Boko Haram Islamists or curbing rampant corruption.

Nigeria last week jumped ahead of South Africa as the continent’s biggest economy after recalculated results of national output were announced.

But in terms of per capita income, Nigeria’s global ranking is still a grim 121, with 84 percent of its 170 million people living on less than $2 (R21) a day, according to 2010 World Bank estimates.

Experts agree that agriculture offers the best chance to generate millions of new jobs quickly. But, while job creation and improving food security are priorities, the best way to spark an agriculture boom is to focus on profit, according to Minister of Agriculture Akinwumi Adesina.

“It’s not about bread,” he told a conference of business and government leaders last month. “It’s about making money.”

Armed with degrees from elite US universities, including Harvard Business School, Nigerian Kola Masha returned home in 2007 looking to launch a business with a positive social impact. Youth unemployment was the greatest threat facing Nigeria but few people realised how dire the situation had become, he said.

From 2007 to 2010, Nigeria had one of the world’s fastest-growing economies. However, the number of unemployed people rose by 16 percent each year. Youths were hard hit, with 56 percent out of work in 2010, according to official data.

The trend was in part a result of the so-called oil curse: Nigeria, Africa’s top crude producer, has given excessive attention to the oil industry which generates very few jobs, while ignoring job-creating sectors.

“Most people I shared that with said, ‘Oh my God, it’s a time bomb’. I said, ‘No, my friend, it’s a bomb that has already gone off’,” Masha said.

A long-running sectarian conflict in central Nigeria has killed over 10 000 people this century, while the gruesome Boko Haram Islamist insurgency in the north has claimed thousands more since 2009.

“If you talk to anybody in the armed forces they will tell you that it is men aged 16 to 24 driving this thing,” he said. “They are angry and hungry.”

In 2010, Masha launched Doreo Partners, a firm committed to creating 10 million jobs by 2030 through private investment in small-scale agriculture. Doreo’s pilot project in northern Kaduna State provided 1 800 farmers with a “complete end-to-end” assistance package, including training, credit to buy equipment and access to high-quality seeds Masha, said.

The firm brokered the sale of produce, taking a commission, and earned interest on the loans, of which 99.7 percent had been repaid so far, he said. The key is creating farm organisations, or franchises, that can produce a reliable, high-quality yield that buyers can count on.

Halliru Saleh, a franchise leader, said that with Doreo’s partnership he had boosted his per-harvest output to 400 bags of maize from 35. His workforce had shot up from five to 100.

Most crucial is a guaranteed 9 percent return that Doreo has promised his “high-net-worth” investors because, like Adesina, Masha believes the way to ignite a revolution is to offer wealthy people a chance to get richer.

At the conference, Adesina said Africa’s richest man, Aliko Dangote, had invested $2.5 billion in agriculture and urged smart investors to follow his lead. “When you see cassava,” he said, referring to a staple crop, “think money.” – Sapa-AFP