By Michael Adaji, Communications Specialist
In Nigeria, high-end food producers rely heavily on imports because locally produced grains often fall short of basic food quality standards. This issue is attributed to the incapacity of local agribusinesses to generate and deliver substantial quantities of food-grade grains. However, the COVID-19 pandemic disrupted global supply chains and imports, creating a new window for local actors like Adefunke Desh Nigeria Limited (ADN), also known as Arzikin Noma, to explore opportunities to scale local supply and trade of high-quality grains.
Despite these opportunities, up to 30 percent of the grains supplied by Adefunke Desh were still being rejected due to poor quality. Ugochukwu Oguike, Adefunke Desh’s Chief Operating Officer, stated, “We had to deal with up to 30% rejection rate which meant that three out of every ten trucks we sent from our factory were rejected. Now, with each truck costing us up N24,000,000 per 30MT of soya, our losses were around N18,000,000 per every ten trucks because we had to sell below market value to feed millers.”
To avoid recurring revenue loss, ADN reevaluated its operations and began a process to reposition itself towards its vision of becoming Africa’s leading agro-allied supply chain for best quality grains by 2030. This vision includes ensuring strategic partnerships for food security and sustainability through climate-conscious engagement.
In 2021, ADN received a co-investment grant worth $1.7 million from the USAID West Africa Trade and Investment Hub (Trade Hub) to scale up its operations. The grant aimed at improving competitiveness and boosting the incomes of partner smallholder farmers by increasing supplies of high-quality maize, soybean, and sorghum.
Through this grant, ADN addressed challenges surrounding grain quality by implementing an outgrower scheme that provided participating farmers with input finance and comprehensive training on modern agronomy and grain handling. Additionally, significant improvements were made in grain storage, cleaning facilities were fully leveraged through employee upskilling and recruitment for field and factory operations.
After two years of implementing the co-investment grant program from Trade Hub/Adefunke Desh partnership mobilized 6,498 farmers cultivating 5,677 hectares of farmland generating $6.7 million in sales revenue—surpassing their initial targets significantly. "Prior to this," said farmer Binta Suleiman," I only got an average of 10 – 20 bags from a hectare of maize farm but with this support I was able harvests as many as 46 bags."
The co-investment partnership facilitated construction enhancing existing warehousing capacity further evidenced through establishing new SILOs weighing bridge sorting machine alongside acquisition five DAF trucks haulage activities highlighting firm’s growth resulting partnership Trade Hub."As result activity trade hub able achieve zero-rejection rate most premium client Nestle result improved laboratory facility enhanced logistics fleet reduce haulage time farmer training backward integration enabled production premium-quality grains improved raw material input factory sustainable manner." Adeoluwa Michael Adeshola remarked.
The socio-economic impact included creation jobs establishment new business entity Arzikin Noma within outgrower space empowering farmers inputs extension service training access premium markets aligning vision leading agro-allied supply chain high-quality grains piloting successful outgrower model Kenya plans expansion across Africa journey highlighted Nestlé Nigeria PLC recent acceptance consistent annual grain supply exceeding MT annually evidence transformative potential strategic investment such USAID West Africa co-investment grant Nigerian agribusinesses contributing livelihood empowerment future food security across Africa.
Alerts Sign-up