Growing your Agri-Business amidst COVID-19
By Emmanuel Allottey
Agribusiness provides the backbone of an economy which supplies the basic ingredients to mankind. The effects of COVID-19, border closures, lockdowns, and social distancing intended to slow the spread of the disease have disrupted the agriculture supply chain in Africa. The survival of Agribusiness is crucial to eradicating poverty and hunger, creating jobs, rapid industrialization, economic diversification and shared prosperity.
According to a World Bank report, Africa’s Agribusiness industry is expected to be worth $1 trillion by 2030. This provides the opportunity for individuals in Agribusiness to increase their wealth exponentially as their businesses grow. Most African countries rely heavily on food imports, despite having up to 60 percent of the world’s uncultivated arable land, fertile soils, abundant labour, and all-year sunshine. This trend should reverse with the success of domestic Agribusinesses. The African continent collectively provides access to one billion people as a ready market for Agribusiness.
Agribusiness owners impacted by COVID-19 should consider the following interventions:
Hi-tech farming: the introduction of technology and automated machinery into farming operations will deliver competitive advantage where human labour is impacted by lockdown and other COVID 19 protocols.
Working Capital: it is imperative to keep the business running by ensuring there is enough cash to cover the completing the endless list of daily operations, between dealing with the production, packaging, and distribution of your products. Agreement with financial institution to provide temporary overdraft facilities or bridging finance will support the continued production of goods to be sold. Alternatively, the owners can inject further capital into the business to keep it running.
Distribution Model: innovative alternatives to traditional selling and delivery methods need to be adopted. The use of websites, third party logistics companies can add value by providing a broader customer base.
Customer Value: offering discounts and even added products during this pandemic will increase goodwill among client and eliminate the cost associated with wasted produce. Supporting local communities through donations and giveaways of farm produce will improve brand perception and increase market visibility.
African Governments in partnership with Financial Institutions have introduced programmes and initiatives to support the growth of Agribusiness. Some initiatives include; Infrastructure funding, input funding, subsidised loans, export ready assistance among others. With the continued harsh impacts of COVID-19, Agribusiness owners will need to adopt transformative strategies to remain resilient and continue to contribute to the economic development of the nation.