Access to financial sources is not always the main key to ensuring the sustainability of agribusiness ventures launched by young African entrepreneurs. This is the main finding of the second day of the African Youth Agripreneurs Forum held in Ibadan, Nigeria, from 25-26 April 2017.
During a session on ‘Financing Youth in Agribusiness,’ the forum explored the financial aspect of agripreneurship. Loans, credit lines, equity were among the ideas discussed. But how about starting a business with creativity as your only capital?
Cote d’Ivoire-based CEO, Samuel Martin, argued that while it is difficult, it is entirely possible. By managing resources already available in the market and brokering other businesses, Martin started a small company that gave school kids in his home country access to computers. Not only his first business was a success, he later built ten other businesses, both at home and abroad, on the same zero-capital model and went on to study the concepts of this model in graduate school in the United States. Today Martin runs a foundation in Cote d’Ivoire that helps young Africans start a business capitalizing on creativity.
In fact, creativity seems to be the most essential requirement when facing financial limitations. The director of the social impact investor Acumen Fund, Godfrey Mwindaare, argued that mitigating the risks associated with investing in agriculture can go a long way to make up for funding that a young agripreneur does not have. Chief among the points Mwindaare gave is that when seeking financing, young agripreneurs should pursue financing that comes with technical assistance and room for capacity building. Another important point is that financing should be patient and not too susceptible to currency depreciation.
The fact that most investors are more willing to give money to businesses with a successful track record and very little risk, is to the disadvantage of the majority of African agriprenuers. Meanwhile, thanks to technology, the businesses with most potential are the new ones; either created over the past five years or the ones to be created in the near future. The founder and CEO of Ubuntu Capital Mamadou Kwidjim calls this gap the dilemma and mismatch paradox of African entrepreneurs. Ubuntu Capital focuses on helping young entrepreneurs who cannot find access to financing. Its model attempts to provide not just access to capital but also skills development, policy advocacy and advisory services.
Towards the end of the forum, the question of the future of African agripreneurship had to be explored. The session was titled ‘The future of youth in networked agribusiness economies’ and focused on envisioning a new Africa approach driven by agriculture.
The future of African agribusinesses is invariably linked to maximizing the use of technology in form of mechanization and ICT systems, argued Hemant Nitturkar, Project Director at the International Institute of Tropical Agriculture. A young computer engineer on the panel, Lilian Uwintwuali, was quick to agree with Nitturkar. She added that when ICT experts work with farmers to understand their problems, innovative solutions can be devised to overcome various challenges.
The demographics of Africa present both an opportunity to invest in a growing young population and an impending crisis of not having enough food to go round. Edson Mpyisi, an agricultural economist with the African Development Bank, describes this double-edged demographic sword as demographic dividend and demographic disaster.
It is estimated that by the year 2030 the food industry will be worth one trillion dollars. It therefore only makes economic sense that the African Development Bank invest in the youth and in agriculture as the safest bet to avert a food crisis by capitalizing on Africa’s immense demographic dividend.
A number of partner organizations participating in the Forum pledged to support the agripreneurs. Daniel Karanja of the Initiative for Global Development (IGD) pledged to sponsor the top 5 AgriPitch competitors to attend the Durban IGD Frontier 100 Leaders and Farming is Cool event at the World Economic Forum in Durban in May 2017. The President of the Brazil-Africa Institute, João Bosco Monte, offered to organize a two-month training for 30 agripreneurs on cassava with Embrapa in Brazil. The Ministry of Youth Promotion of Côte d’Ivoire has offered to host the next AYA Forum (AYAF-2) in 2018 in Abidjan.
By all accounts, the AgriPitch segment at the end of the African Youth Agripreneurs Forum represented the exciting climax of the two-day deliberations. Ten agripreneurs had a chance to present proposals that they have worked on in the past two months before a panel of judges. The three winners will move on to work closely with the African Development Bank on their ideas on how Africans can improve the way they produce, process and distribute African agrifood products.
The African Youth Agripreneurs Forum comprises of the following: the AYA Forum, a 2-day Conference/Workshop with thematic discussions and presentation of success stories; Agri-Pitch Entrepreneurship Competition that will lead to a selection 3 finalists for presentation at the AfDB’s Annual Meetings in India in May 2017; and side events including a mentor and incubator training programme. It is organized by the AfDB, in cooperation with the IITA, the African Agribusiness Incubators Network and the Technical Centre for Agricultural and Rural Cooperation ACP-EU (CTA).