the NIRSAL Agr ibusine ss Pe r spe c tive Pre se nta tio n b y - - PowerPoint PPT Presentation
INST IT UT E OF CHART E RE D ACCOUNT ANT S OF NIGE RIA (ICAN) CONF E RE NCE 2018 SME s: Re vving the E c onomy to Ac tion the NIRSAL Agr ibusine ss Pe r spe c tive Pre se nta tio n b y MR. AL I YU A. ABDUL HAME E
INST IT UT E OF CHART E RE D ACCOUNT ANT S OF NIGE RIA (ICAN) CONF E RE NCE 2018 SME s: Re vving the E c onomy to Ac tion …the NIRSAL Agr ibusine ss Pe r spe c tive
Pre se nta tio n b y
I YU A. ABDUL HAME E D MD/ CE O NI RSAL
Oc tobe r 3, 2018
I ntro duc tio n Ag rib usine sse s a nd the Nig e ria n E c o no my NI RSAL ’ s Ac tivitie s in F a c ilita ting Ag rib usine ss Co nc lusio n 1 2 3 4
1
Conte nts
2
E c onomic gr
e nds in Nige r ia
3
So urc e : Wo rld Bank Ope n Data, NI RSAL Analysis
T he Nige r ian E c onomy
NIGE RIA, GDP PE R CAPIT A (CONST ANT 2010 US$) 2007- 2017
US$2,564 2016 US$2,412 2017
NIGE RIA, GDP GROWT H (% ) (CONST ANT 2010 US$) 1961 - 2017
2016 0.83% 2017 33.7% 2004 25% 1970
he na tio n ma na g e d to re c o rd a me a g re 0.8% GDP g ro wth in 2017 re c o ve ring fro m the de pre ssio n in 2016 with -1.6% g ro wth.
ye a rs o f the la st de c a de 2007-2017 a nd de c line d by 2% in the la st 3 ye a rs le a ving GDP pe r Ca pita a t
US$2,412 c ompa re d to world a ve ra g e of US$10,634.
20 Hig h Inc ome Countr ie s 7 L
m Out pe r for me r s 11 Re c e nt Out pe r for me r s 9 ‘Middle r ’ Ve r y r e c e nt Ac c e le r a tor s 17 ‘Middle r ’ Consiste nt Gr
s 13 ‘Middle r ’ Vola tile Gr
s 14 Unde r pe r for me r s
Inc luding Ghana and Rwanda Inc luding T anzania, Uganda, Mor
T he se 18 Outpe r for me r c ountr ie s have c umulative ly lifte d 1billion pe ople out of pove r ty be twe e n 1990 and 2013
Ac c o rding to Se pte mb e r 2018 Mc K inse y Re po rt, Nig e ria is ra nke d a “Volatile Gr
” with “ No r e lative c hange: No or inc onsiste nt impr
4
So urc e : Mc Kinse y Glo b al I nstitute (MGI ), Se pte mb e r 2018, NI RSAL Analysis
Pr
Countr ie s asse sse d by MGI
Outpac e d US g ro wth c o nsiste ntly fro m 1965-2016 with GDP pe r c apita g ro wth ab o ve 3.5% annually fo r 50 ye ars Outpac e d US g ro wth c o nsiste ntly fro m 1996-2016 with GDP pe r c apita g ro wth ab o ve 5% annually fo r 20 ye ars
F alle n b e hind: Slo we r re lative g ro wth than US fro m 1965–2016
E c o no mie s with GNI pe r c apita o f $6,000 o r mo re in 1987, e xc e pt Ho ng Ko ng and Sing apo re whic h are Outpe rfo rme rs
No re lative c hang e : No o r inc o nsiste nt impro ve me nt re lative to US fro m 1965– 2016
5
So urc e : Mc Kinse y Glo b al I nstitute (MGI ), Se pte mb e r 2018, NI RSAL Analysis
Pr
Countr ie s asse sse d by MGI
Rapid gr
for ming e c onomie s we r e attr ibute d to c e r tain ke y fac tor s in the MGI r e por t
6
So urc e : Mc Kinse y Glo b al I nstitute (MGI ), Se pte mb e r 2018, NI RSAL Analysis
L e ssons fr
gr
e c onomie s
Go ve rnme nt Po lic ie s e na b le d a pro- g rowth
Cyc le b a se d o n
Pro duc tivity, I nc o me a nd De ma nd b y:
te c hno lo g y a c c umula tio n
fo re ig n ma rke ts
inve stme nts, c o mpe titio n a nd ma rke t e ffic ie nc y. Nume ro us hig hly
Compe titive L a rg e F
irms:
priva te se c to r c ha ra c te rize d b y hig hly c o mpe titive firms e me rg ing a s g lo b a l pla ye rs.
inno va tio n a nd inve stme nts in R&D
de ve lo pme nt a nd hig he r inc o me s Ac kno wle dg e me nt a nd de lib e ra te Suppo rt to Sma ll
a nd Me dium E nte rprise s (SME s):
s ha ve b e e n a po lic y
fo c us o f ma ny
tho ug h c re dit g ua ra nte e pro g ra ms, inno va tive sub sidie s, a ssista nc e with inte rna tio na l c e rtific a tio n, dig ita l te c hno lo g ie s, e - c o mme rc e a nd c o nne c tivity pla tfo rms
MSME s ar e a c r itic al c ompone nt of the Nige r ian e c onomy and de libe r ate atte mpts must be made to suppor t the ir gr
7
So urc e : E RGP 2017-2020, SME DAN/NBS Surve y 2013
F
MSME s in Nige r ia
37,000,000
MSME s in Nig e ria a c c o unt fo r:
50%
84%
mplo yme nt
7.27%
xpo rt E a rning s
In spite of the ir importa nt c ontributions a nd pote ntia ls for g rowth, SME s fa c e a numbe r of c onstra ints a nd c ha lle ng e s
I na de q ua te a c c e ss to fina nc e Po o r infra struc ture L imite d a c c e ss to ma rke ts L imite d use o f mo de rn te c hno lo g y Hig h le ve ls o f unskille d wo rkfo rc e Multiple ta xa tio n Diffic ult re g ula to ry e nviro nme nt
8
Nige r ian Agr ic ultur al Pote ntials
T he Ag ric ulture se c to r ha s the po te ntia l to g ro w to a ra te o f
8.37% in re a l te rms
By 2020
g re w @ a ra te o f
3.45% in re a l
te rms
In 2017 full ye ar
T he Agr ic ultur e se c tor : T he e c onomy as a whole : g re w @ a ra te o f
0.83% in re a l
te rms
while
NGN17.2 T r illio n
(Re al/ Co nstant Pric e s)
(c o ntr ibute d 25% to RE AL GDP) NGN23.9 T r illio n
(No minal/ Curre nt b asic Pric e s)
NGN69.2 T r illio n
(Re al/ Co nstant Pric e s)
NGN114.9 T r illio n
(No minal/ Curre nt b asic Pric e s)
NGN21 T r illio n
(Re al/ Co nstant Pric e s)
* So urc e : NBS 2017 Re po rts & E
RGP
Agr ibusine ss MSME s, par tic ular ly, r e main one of Nige r ia’s gr e ate st hope s for e c onomic gr
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E c osyste m of Ag ribusine sse s
Ag rib usine ss MSME s spa n a c ro ss se g me nts o f va rio us a g ric ultura l va lue c ha ins, a c c o unting fo r 97% of the Agr
ic ultur al GDP of Nige r ia as at 2013* Pr e - Upstr e am Upstr e am Midstr e am Downstr e am
AVC Se gme nts
xpo rt b ro ke rs
xpo rt Me rc ha nts a nd L
e rtilize r Ag ro -d e a le rs
Input Distrib uto rs
ra c to r a nd E q uipme nt Hiring Ag e nts, Bo o king Ag e nts, Ope ra to rs, Me c ha nic s, e tc .
a rme rs
xte nsio n Ag e nts
Pro duc e rs
T ub e rs, Aq ua c ultu re , F F V, Po ultry, Rumina nts, Apic ulture , e tc .
(e xtra c tio n, milling , drying , c le a ning , e tc .)
ra nspo rta tio n
I nte rme dia rie s
T ype s o f Agr ibusine sse s
*2013 NBS a nd SME DAN Re po rt
So me o f the se Ag rib usine ss e s c a n g e ne ra te up
to 200% Re tur ns o n Inve stme nt
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Nige r ia is ble sse d with four (4) major
tunitie s for agr ibusine sse s to thr ive
So urc e : AfDB, 2015, F rie nds o f E uro pe , 2014
… whic h if prope rly ma na g e d, would de live r:
F
Se c urity & Nutritio n E c o no mic Gro wth &
Dive rsific a tio n
E mplo yme nt Ge ne ra tio n
& L ive liho o ds
Susta ina b ility F
E xc ha ng e E a rning s Ba la nc e o f T ra de Nige r ian Agr ic ultur al Pote ntials
L AND
84 millio n he c ta re s o f a ra b le la nd with o nly a b o ut 50% in use
MARKE T
Hug e c o nsume r ma rke t o f 200millio n pe o ple with unsa tisfie d de ma nd
L ABOUR
Hug e supply o f la b o ur–
a g e d 15-65 ye a rs
WAT E R
Pre dic ta b le ra infa ll pa tte rn; Billio ns c u. m o f surfa c e a nd unde rg ro und wa te r
11
Capitals r e quir e d to maximize the pote ntials
ibusine sse s
F INANCE Capital
Pa tie nt c a pita l to po we r a n a g ric ultura l re vo lutio n
T E CHNOL OGY Capital
Sc ie ntific a nd te c hno lo g ic a l so lutio ns fo r inc re a se d pro duc tivity
HUMAN Capital
I nte lle c tua l a nd te c hnic a l c a pa c ity fo r a g rib usine ss
E QUIPME NT Capital
Hig h-e nd e q uipme nt fo r me c ha nisa tio n a nd c o mme rc ia lisa tio n … but lac ks four (4) c r itic al c apitals
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Othe r limitations
ibusine sse s … and is limite d by se ve r al othe r c onstr aints…
pe rc e ive d risks
c o sts
imite d a ttra c tive ne ss
xc lusio n o f wo me n a nd yo uth in a g ric ultura l de ve lo pme nt
c o mmitme nt to c lima te re silie nt pra c tic e s
ne ffe c tive po lic ie s, re g ula tio n, g ra de s a nd sta nda rds
a c c e ss a nd inc e ntive s
Broke n a nd unde rpe rforming va lue c ha ins Poor infra struc ture Adve rse a g ri- busine ss e nvironme nt Poor foc us on inc lusion a nd susta ina bility Poor a c c e ss to fina nc e
pile ptic Po we r supply
na de q ua te T ra nspo rt a nd Sto ra g e F a c ilitie s
a c k o f o rg a niza tio n
nsuffic ie nt inputs, e q uipme nt, te c hno lo g ie s a nd suppo rt se rvic e s
So urc e : NI RSAL , AfDB
NIRSAL e xists to De - r isk Agr ic ultur e and F ac ilitate Agr ibusine ss
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CBN De sig ne d to Re -De fine , Me a sure , Re -Pric e , Sha re Ag ric ultura l b a se d risks I nc o rpo ra te d
$500millio n No n-Ba nk F ina nc ia l I nstitutio n Nig e ria n Ba nke rs Co mmitte e F e de ra l Ministry o f Ag ric ulture & Rura l De ve lo pme nt Pub lic Priva te Pa rtne rship Ra ise c o mme rc ia l b a nk a g ric . le nding po rtfo lio fro m the c urre nt fig ure to 7% b y 2026; E xpa nd I nsura nc e Co ve ra g e fro m 0.5 to 3.8 millio n sma ll-sc a le fa rme rs a c ro ss va rio us a g ric . va lue c ha ins E xpa nd c o mme rc ia l le nding to 3.8 millio n sma ll- sc a le fa rme rs b y 2026 using va lue -c ha ins NI RSAL Ob je c tive s Ab o ut NI RSAL
About NIRSAL
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NIRSAL ’s Mandate
I nstitutio na lize inc e ntive s fo r a g ric ultura l le nding F ix b ro ke n a g ric ultura l va lue c ha ins (AVC) Re de fine , Dime nsio n, Me a sure , Pric e a nd Sha re a g rib usine ss re la te d c re dit risk Build lo ng te rm c a pa c ity Stimula te the flo w o f fina nc e a nd inve stme nt in to the a g ric ultura l va lue c ha ins
Mission “T
be twe e n a g ric ulture a nd fina nc e ; ma ximizing the pote ntia l of a g ric ulture for food se c urity, job c re a tion a nd e c onomic g rowth” Vision “T ra nsforming the E c onomy, De live ring Inc lusive Growth a nd Impa c ting L ive s”
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NIRSAL ’s Mandate
NIRSAL ’s Stra te g ic Pilla rs
Sha re c re dit risks with pro vide rs o f F ina nc e a nd I nve stme nts (up to 75% lo ss inc urre d) De ve lo p inno va tive I nsura nc e pro duc ts to b e ne fic ia rie s Build c a pa c ity o f fina nc ia l institutio ns a nd a g ric ultura l va lue c ha in pla ye rs; F ixing the b ro ke n AVC Ra te le nde rs a nd Va lue Cha in a c to rs a c c o rding to the ir e ffe c tive ne ss Re wa rd va lue a dde d pe rfo rma nc e b y AVC a c to rs a nd le nde rs
Risk Sha ring $300milio n I nsura nc e $30millo n T e c hnic a l Assista nc e $60millio n Ra ting $10millio n I nc e ntive Me c ha nism $100millio n
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Our five (5) str ate gic pillar s pr
r isk manage me nt ope r ations and inte r ve ntions
18
NIRSAL is foc use d on the upgr ade , de ve lopme nt and inte gr ation
ic ultur al value c hains
NIRSAL ’s Approa c h
F inanc e c an only be attr ac te d to fixe d agr ic ultur al value c hains
19
1) Str uc tur ing Value Chain F inanc e
Catalyzing financ e and inve stme nts for agr ibusine sse s
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Wo rking Ca pita l a nd Asse t F ina nc e fo r
Prima ry Produc e rs
Wo rking Ca pita l a nd Asse t F ina nc e fo r
Proc e ssors
Wo rking Ca pita l fina nc e fo r struc ture d
c onsume r/ re ta il ma rke ts
Wo rking Ca pita l F ina nc e fo r T
e c hnolog y Provide rs a nd E quipme nt Supplie rs Simplifie d I llustratio n Ag ric ulture Va lue Cha in F ina nc e a nd Inve stme nts
a nd fina nc ing fra me works tha t re fle c t, fit a nd c a pture Ag ric ultura l va lue a nd c a sh flo ws
prima ry pro duc e rs to struc ture d e nd ma rke ts thro ug h o ffta ke a g re e me nts a c c e pta b le to fina nc e
2) De ploying Robust Risk Manage me nt T
all dime nsions of r isk
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I nno va tive I nsura nc e e .g . the NI RSAL Co mpre he nsive I nsuranc e Cre dit e nha nc e me nt to o ls e .g . Cre dit Risk Guarante e s T e c h-d rive n mo nito ring using F MI S, AI Gro up a nd I ndividua l Cro ss Gua ra nte e s
Attra c tion for F ina nc ie rs a nd Inve stors:
c o mme nsura te to e xpe c te d re turns
nc re a se d c o mfo rt a nd c o nfide nc e
Catalyzing financ e and inve stme nts for agr ibusine sse s
3) Inc e ntivizing Ac tor s and Shaping Be haviour s
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Ca pa c ity Building fo r pro duc e rs a nd va lue c ha in a c to rs Orie nta tio n a nd Ca pa c ity Building fo r a g ric ulture fina nc e a c to rs I nte re st Dra w Ba c k Sc he me s fo r b o rro we rs Ra ting Sc he me s fo r a g ric ulture fina nc e a c to rs
Re sulting to:
mpro ve d a g rib usine ss pe rfo rma nc e
mpro ve d re pa yme nt b e ha vio urs
nc re a se d unde rsta nding o f the se c to r b y a g rib usine ss fina nc e va lue c ha in a c to rs
Catalyzing financ e and inve stme nts for agr ibusine sse s
NIRSAL ’s Risk Shar ing T T MPs NIRSAL builds and imple me nts innovative T
e c hnique s, Me thodologie s and Par tne r ships (T T MPs) for r isk shar ing
Busine ss Mo de ls
Pre - Upstre a m Upstre a m Midstre a m Downstre a m
Inno va tio n
Me c ha niza tio n
Prima ry Pro c e ssing
Pro c e ssing
Ma rke t
xpo rt Ma rke t Sub - Se g me nts
NI RSAL ’ s Risk Sha ring I nstrume nts
Ag ric ulture / Ag rib usine ss Va lue Cha in (AVC) F ina nc ing F ra me wo rks Cre dit Risk Gua ra nte e s a nd I nte re st Dra w Ba c k Sc he me
Ge o -spa tia l Ma pping & Ag g re g a tio n
F ie ld Go ve rna nc e F ie ld Mo nito ring
T e c hnic a l Assista nc e
MPPS
I nno va tive I nsura nc e Pro duc ts Offta ke Arra ng e me nts Clima te Sma rt Ag ric ultura l I nte rve ntio ns
K e y Se g m e nts Ve ry Hig h Risk Hig h Risk Me d ium/ L
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L
MAMDA & MAMDA RE PE T KUS (Ge rma ny)
Inte r national
Some of NIRSAL ’s Str ate gic Par tne r ships to date
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NIRSAL ’s E F F ORT S F OR YOUT H DRIVE N AGRIBUSINE SSE S
NIRSAL is fac ilitating Agr ibusine ss SME s thr
in Innovative Agr ibusine ss (N- YIA) Str ate gic F r ame wor k
Co ntro lle d E nviro nme nt Ag ric ulture fo r Yo uths in Urb a n a nd Pe ri-Urb a n Se tting s (CE A – UPS) NI RSAL Stude nts K no wle dg e , E nte rprise a nd Pra c tic e Pro g ra m (N-SK E P) NI RSAL Ro undta b le fo r Yo uths in Ag rib usine ss (NiRA)
T he NIRSAL Youth in Innovative Agr ibusine ss (N- YIA) De sk
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Gua ra nte e d
Gua ra nte e d
nte re st Dra w Ba c k Pa id
la unc he d the Are a Yie ld I nde x I nsura nc e pro duc t a nd pro te c te d up to N5.4b illio n re ve nue s o f 25,000 fa rme rs
a unc he d the NI RSAL Co mpre he nsive I nde x I nsura nc e
a nd T ra ine d 184 Middle Ma na g e me nt a nd Ag ric De sk Offic e rs o f c o mme rc ia l b a nks.
to 700,000 fa rme rs a nd 74 E xte nsio n Wo rke rs Mo b ilize d o ve r NGN35b illio n c a sh- b a c ke d c o mmitme nts fro m c o mme rc ia l b a nks fro m Q1 to da te 2018 fo r the fina nc ing
le ve ra g ing stra te g ic pa rtne rships
Risk Shar ing F und Insur anc e T e c hnic al Assistanc e F und Mobilization
I nve stme nt a ttra c te d/ L
NGN77.6b illio n
Dire c t E mplo yme nt Cre a te d: Ove r
360,000
L ive s I mpa c te d: Ove r
1.8 millio n
Some of our Re sults to date
Guida nc e o n the e sta b lishme nt o f Risk Sha ring F a c ility (RSF ) mo de ls fo r Afric a n Co untrie s unde r the a e g is o f the Afric a n De ve lo pme nt Ba nk (AfDB)
Re st of Afr ic a E ngage me nt 28 MIF A suc c e ssfully launc he d in T
T he r
s in the e c onomy c annot be ove r e mphasize d
Conc lusion
he e c o no mie s o f se ve ra l na tio ns ha ve g ro wn thro ug h the e xiste nc e a nd g ro wth o f MSME s.
s a re pro ve n to b e hig hly suppo rtive o f la rg e firms a s pro vide rs o f inte rim inputs a nd in ma ny e me rg ing e c o no mie s, le a pfro g a nd g ro w to b e c o me la rg e c o mpa nie s.
he Nig e ria n e c o no my de pe nds g re a tly o n the pe rfo rma nc e o f pro duc tive se c to rs ma inly Ma nufa c turing , E xtra c tive s a nd Agr
ic ultur e
’s aim is to pr
ly str uc tur e and tr ansition agr ic ultur al value c hain ac tor s in Nige r ia fr
e Agr ic ultur al pr ac tic e to optimally ope r
ating Agr ibusine sse s c apable of tr
ansfor ming the e c onomy.
29
Be ne fits of De - r isking
F inanc ie r s and Inve stor s T hr
ts, NIRSAL hope s to de live r the following be ne fits
a dministra tio n c o sts
inte re st inc o me
pro te c tio n o f c a pita l
mpro ve d ‘ risk-re turn’ pro file o f inve stme nts
po rtfo lio
nc re a se d a c c e ss to fina nc e
mpro ve d pro duc tivity a nd re silie nc e
thro ug h insura nc e
e xpa nsio n a nd g ro wth
nc re a se d inc o me a nd sta nda rd o f living Agr ibusine sse s
c o no mic dive rsific a tio n
nc lusive g ro wth a nd susta ina b le de ve lo pme nt
nc re a se d c o ntrib utio n to GDP
T he E c onomy
30
Inve stor s and F inanc ial Institutions Gove r nme nt and Polic y Make r s
NIRSAL
Ope n up to o ppo rtunitie s fo r re turns ma ximiza tio n a nd inc re a se fina nc ing to Urb a n a g rib usine sse s le ve ra g ing a va ila b le risk ma na g e me nt me c ha nisms Cre a te e na b ling e nviro nme nt fo r a g rib usine sse s a nd a g ric ulture fina nc e to thrive fo r the de live ry o f a dditio na litie s a nd po sitive impa c t to the na tio n. Rise up to the c ha lle ng e to ta ke a dva nta g e o f o ppo rtunitie s fo r inc re a se d struc turing into o ptimize d a g rib usine sse s
Agr ic ultur al Value Chain Ac tor s
Call to Ac tion
Collabor ation is r e quir e d ac r
the de live r y of signific ant impac t and r e alization of mutual be ne fits
T he Ac c ountants Community
Suppo rt a g rib usine sse s in the de ve lo pme nt o f b usine ss a nd fina nc ia l mo de ls tha t wo uld a ttra c t fina nc e a nd inve stme nts to the se c to r fro m the mo ne y a nd c a pita l ma rke ts.
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