Nigeria: Agribusiness Investors Count Losses As Hospitality Sector Remains Closed

30 June 2020

Agribusiness investors are lamenting low patronage and glut of products due to the closure of businesses by operators in the hospitality sector as a result of the Covid-19.

According to them, the situation is causing them untold economic hardship.

This is because hoteliers, event centre owners, bar, among others are their major customers.

Speaking recently, the Managing Director, Agrecourse Limited, a crowd-funding platform for agriculture, Mr. Ayoola Oluga, said the traction gained by the agricultural sector in the last one year since the government closed the border must be sustained by reopening the hospitality sector.

He said many smallholder farmers had reaped the benefits of increased production and increased income due to the border closure. He, however said with the continuous closure of the hospitality sector they are now experiencing low patronage.

"With the advent of the coronavirus, another set of problems have risen. Some farmers have continued to find it difficult to sell their products, especially fish farmers. This is mainly due to the shutdown of the hospitality sector, where you find the major off-takers," he said.

On his part, the General Manager of Linace Farms, Imo State, Mr. Azubuieke Chiemeka, said most off-takers are presently off business, due to uncertainty of business sustainability.

"There is also a glut of products now, and everybody is selling at lower prices, as people are afraid to re-stock because they cannot sell their old products," he added.

On his part, the Chief Technology Officer, ThriveAgric, another crowd-funding platform for agro-allied investments, Mr. Ayo Arikawe, explained that chickens from their farms are mostly sold to "processors, who, in turn, sell to restaurants and hotels"

"We know this affects their sales, making them keep more stocks in cold rooms unnecessarily, and there is an increased logistics cost for them. We essentially reduce the birds stocked this period to match off-takers' demand," he added.

Explaining measures put in place to cushion the effect of the Covid-19, the CEO, Agro Park, Mr. Ayodele Alabi, said as a result of the restrictions across the country, a good number of their partners had either reduced or totally shut down their operations.

According to him, "We are diversifying into staple crops like maize, sweet corn, soya, rice, beans, and we have cultivated about 130 hectares of maize; 10 hectares of sweet corn; 40 hectares of rice; 85 hectares of land is ready for second ploughing for soya; 100 hectares of land is at 65 percent completion for beans cultivation and for, livestock, we have signed contracts with off-taker partners with a strong ecommerce platform, which has taken about 20 percent of our stock in four weeks."

The moves, he added, were done, "because we understand that post Covid-19, the demand for food will rise, and we are strategically positioning to take a huge market share."

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