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How Inflation impacts my business — Farmer

Ada Osakwe is the chief executive officer of Agrolay Ventures, an agribusiness investment company based in Lagos, which invests in African agricultural food-related companies. Ms Osakwe is an alumna of Kellogg School of Management, at Northwestern University in the United States of America, where she obtained a Master of Business Administration. She is the producer of Nuli juice, made from fruits grown in Nigerian farms.

In this episode of PREMIUM TIMES’ weekly series, Women in Agriculture, Ms Osakwe speaks on how rising cost of production is affecting her business.

PT: You began your journey into agriculture after working with the Nigerian government. What birthed the idea at that time?

Ms Osakwe: I worked with the Nigerian government as a senior advisor on investment to the Minister of Agriculture between 2012 and 2015. I saw that Nigeria at the time was importing over $10 billion worth of food, ingredients and staple foods that people eat on a daily basis. So, I founded Nuli in 2016. It was really focused on using locally grown agricultural produce to make value added products. I really wanted to be part of that movement that addressed food insecurity, that’s how Nuli was born in 2016.

PT: Since you started the juice factory, would you say you’ve seen a significant difference regarding the nutritional benefits and people getting what you wish they could get from natural fruits in the last few years?

Ms Osakwe: Yeah, absolutely. Unfortunately, we don’t have clear metrics that have been measured around it, but I can give you anecdotal evidence that customers have shared with us. Recently, somebody sent a message to me on Instagram and said, ‘I buy your Zobo drink, and I’ve been buying it for years. Honestly, I am healthier, my skin is better’. This is a man. He said he feels stronger. His blood sugar levels are better and that’s a man in his 40s. We have much older people who will drink our ginger drink and that’s what they have for their digestion. So that really is the impact.

PT: You are based in Lagos and then you are moving to another southern state, why not to cities like Abuja?

Ms Osakwe: I mentioned we want to make Nuli for every Nigerian. We had Abuja for one year in 2016. Then we opened up Lagos after that. I also relocated to Lagos, and so I was not on the ground. As much at the time we were building out the business and the structures, the processes and the system. Abuja then required a bigger outlet, because the brand was growing, and we needed a bigger space.

So, we closed down with the hope that we’ll get a bigger space. We actually paid rent for a place. But that place never came to fruition, and the landlord had to return our rent to us. As a result, we just haven’t been able to refocus our efforts to open in Abuja where our story actually began. We would one day want to be back in Abuja. We want to finally open Port Harcourt; we want to open in Kaduna, Kano and other major cities.

PT: You talked about getting the fruits from the smallholder farmers. What locations are they based in? Then what kind of challenges do you face regarding sourcing them, because sometimes they might be unavailable for your production?

Ms Osakwe: We have supply chain logistics challenges. Then we have to resort to using retailers or middlemen to be able to get the products we couldn’t get directly from our small holders. We currently work with small holders, across from Abeokuta. Then even closer to us, is the Lekki/Epe area, from plantains to lettuce to pineapples, and those are some of the major value chains.

Ada Osakwe is the chief executive officer of Agrolay Ventures.
Ada Osakwe is the chief executive officer of Agrolay Ventures.

About 120 of the smallholder farmers service all our stores in Lagos. The beauty about going to other parts of the nation is even being closer to the farmers in certain parts that grow particular items that we’ve had challenges getting all the way down to Lagos from time to time. It will be part of our strategy to build these linkages.

PT: There was a time when farmers in the north wouldn’t allow movement of goods to the south. How were you able to address that at that time?

Ms Osakwe: You know, it was between that and even the year before, that’s COVID 19, when there were issues with logistics, and borders were being closed even between states. There were times it (our product) wouldn’t have a particular flavor, because we cannot source it. I think we addressed it by being able to communicate that with our customers from day one. They believe and trust our integrity. We became quite good with that. People bring me pineapples from the Benin Republic but we don’t use that variety. We just have never even used anything else that’s not grown in Nigeria because we only use the variety that’s grown here.

PT: Tell us about your challenges as an award winning female Agroprenuer, especially in a sector seen to be dominated by men?

Ms Osakwe: It’s just the biases people have, the expectations they have for a woman, the cultural issues as women that we have to deal with as well. I say that many times that I’ve been lucky because of the high-level positions I’ve had very early on in my career. I’ve been able to have a seat at the table, with lots of experienced experts.

That has given me a lot of credibility, especially in my field, because I earned that credibility. I earned it. I was prepared. I can add value to conversations and proposals and initiatives. As a result, I was practicing. So that’s one thing as a woman, and when you are a respected woman, nobody really sees it. But what I did find, especially when I was in government, right, I was in the civil war within the civil service for three years, maybe four. Then there were issues around age: does she look young? How old is she even? And you have both men and women, actually, in this culture, who treat you with a little bit of disrespect, because you don’t look like the norm. You don’t fit the mould of what a senior advisor who has won Forbes Africa Business of the Year, and all the other awards, should look like.

PT: As an expert in the agriculture sector or a former stakeholder, what is your opinion on issues surrounding agricultural developments, regarding farm inputs?

Ms Osakwe: It all begins right after the next stage after research, right? Making sure you have quality seeds and the right drought resistant so that whatever environment our farmers are in, they can grow them. Then, having access to quality seeds or fertiliser. It continues to be a challenge. The government must step in and do it efficiently in a way that you’re not seeing corruption. However, people come in to collect those fertilizer contracts, but never deliver it to the farmers. Now, this current administration with the new CBN regulations is really doing a lot for intervention funds. They also try to open that up as well. But we are still watching. It’s a very difficult sector that has been played with so much corruption so people have been rent-seeking and they don’t want it to be efficient, they don’t want it to work.

PT: Let’s talk about insecurity. It’s affecting farmers, if the farmer does not produce, how then would you be able to get the fruits and then make your juice?

Ms Osakwe: Thankfully, it is not as significant. I guess the quantities we buy are still not what is at risk to that insecurity or maybe big companies that require those inputs in large quantities have been superbly affected. Instead, what’s affecting us is inflation. What’s affecting the rise in the cost of diesel? These are things that immediately pass on and become truly something that is just the opposite of progress.

PT: So how are you able to deal with inflation at this time? Like you said, it’s the opposite of business progress so how are you able to manage it? What measures are you taking?

Ms Osakwe: It’s tough. Okay, it’s been really tough. It is a vicious cycle. Nobody wins in this situation. It is tough. Even before I got on this call another one of the factories was writing that we need diesel. I’m like, you have this, how are you managing it in this current situation? It just becomes really tough to make decisions. You’re having to manage your situation. You depend on your farmers to give you some level of succor by saying ‘okay, you can pay me two weeks’ time or you can pay me three weeks’ time’.

Some may not allow that discussion. Then on the other side, we sell to big corporate firms and supermarkets that we just give them on a weekly basis and they don’t pay immediately. We’re lucky that in 2021, we increased prices, but this was passed on to consumers.

You’re trying to still be affordable. There’s a limitation to how much I can pass to the consumer at a higher price. Yes, it’s a lot. As a business owner, as an SME owner, trying to thrive and build your brand in this country is very tough.

PT: Let’s talk about your staff. Do you think it gets to a time where you have to maybe dismiss them or relieve them of their duties or something? If things do not get better?

Ms Osakwe: It’s already happening in terms of how we assess the workforce just to deal with the situation we’re in. There are two people that were recently put on a part time job. I can’t afford you as a full-time position. You know, this is the reduction in your salary. You can come two days a week.

PT: How are you sure that products maintain high nutritional values? What measures do you take to make sure your products do not jeopardise the quality of the produce they give you?

Ms Osakwe: Yes, that’s a great question. We have a whole quality assurance and control team and we just don’t compromise. We don’t compromise in production; we work with only those farmers that understand that we don’t compromise and then maintain that integrity. We support them where we can. That’s really how we just make sure that we are saying, ‘We don’t cut corners’. I think people know that about us. We just don’t cut corners.

PT: You mentioned something about how owning a business in Nigeria can be very terrible. There are young people who want to own businesses in Nigeria. So what would you tell them, considering the situation of inflation?

Ms Osakwe: In January, across Africa, you hear that 11 million youth are entering the workforce to work, and only 3 million jobs are available for them on the continent. So, we have an unemployment crisis, we have an issue. Then Nigeria is facing the same thing. When it comes to entrepreneurship, it’s also not easy. Many of the youth will turn to entrepreneurship, meaning that they become self-employed.

Many of them don’t even have the capital that is necessary to start and then grow the business. It shouldn’t be a business for the sake of it. While you are doing this entrepreneurship, you should be thinking about ‘how am I building a sustainable enterprise that’s really going to give me wealth, not just give me food for today and tomorrow, that’s truly going to build wealth for me so that I can pay the salaries for my staff, the school fees for my children, and when I start having children, I can start owning property’?

Ada Osakwe is the chief executive officer of Agrolay Ventures.
Ada Osakwe is the chief executive officer of Agrolay Ventures.

That’s the sort of vision when I think of entrepreneurship that I want to see our young people get into. Yet the system is so challenging. Which bank is going to give them that money? You have all these intervention funds, even from CBN. But even for me as my business is today, I say I want N1 billion now that I know is going to transform, the bank will tell me when N2.5 billion in security and collateral to cover that. If I have 2.5 billion in collateral assets, why would I be begging for a billion in loans?

So even in our small way at the Nuli, we’re trying to figure out how do we make sure young unemployed, who are turning to entrepreneurship, have the right opportunities for them backed with all the tools to make sure they’re successful, to make sure that they grow the access to finance, the training, the exposure, the mentorship, the networking.

PT: Tell us more about your plans on empowering young people at Nuli?

Ms Osakwe: We are piloting 40 girls. We want to make sure that we’re able to have young people own their own unique store. So, the Port Harcourt store I speak of is not going to be owned by us. It’s going to be owned 100% by young women. We just finished our interviews, beecause among the unemployed, over 50% is typically women. So we want to have these opportunities where she gets access to a loan set over four years at 0%. But she just came back from the sales of the store. She will get mentorship and support, she will get training, business training on how to run your hospitality business.

PT: What’s your parting shot with regards to finance, agriculture and business?

Ms Osakwe: I just feel really proud that I was able to roll up my sleeves and enter this thing, you know, called agribusiness in Nigeria, by myself. And we just continue to push. I am really excited about the impact made. And I knew that there was a lot more to come across the board, from agriculture impacts to nutrition, to entrepreneurship, women empowerment, job creation, and much more.

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