Nigerian startups digitize local food supply chain


LAGOS, October 26 (Reuters) – Nigerian start-ups are digitizing the local food supply chain, helping traders cope with high food costs and farmers selling their produce.

Two of these companies, Vendease and Sabi, created last year, have created digital marketplaces that allow wholesalers, traders, restaurateurs and hotels to buy directly from farms and manufacturers.

Inflation has been in double digits in Nigeria since 2016, although it has eased over the past six months. Price increases peaked in March amid COVID-related disruptions, currency devaluations and security concerns in food-producing regions.

Start-ups work with producers by offering credit to farms to help them grow, signing supply agreements, collecting the produce and selling it at a specific rate to buyers – earning money. money on interest and through a commission of around 1% to 5%.

Vendease CEO and co-founder Tunde Kara believed his three-month-old business was doomed when Nigeria’s commercial capital Lagos was shut down in March 2020 to stem the spread of the coronavirus, but it turned out be the boost the business needed.

“It turns out that this singular act of shutting down everywhere and people couldn’t go straight to the market themselves and we could because we had a license as a sourcing company helped change the habits of ‘buying these companies, “Kara told Reuters. .

Vendease claims to have helped more than 100 hotels and restaurants save $ 480,000 in food supply costs over the past nine months.

Michael Williams, Vendease user, general manager of Ebony Life Place hotel and restaurant in Lagos, said: “…

It also helps solve a problem facing African smallholders: lack of access to markets – mainly due to difficulties in transporting goods from rural areas to buyers in cities – which often results in wasted part. of their harvests.

The United Nations food agency said farm losses in sub-Saharan Africa for fruits and vegetables reached 50% before the pandemic and likely increased as they limited movement.

Anu Adasolum is the co-founder and CEO of Sabi, which has registered 150,000 small business users on its platform in five states.

“What we are trying to ensure is that merchants never pay more than they have to pay for all of the products and services that they have access to through us,” she said.

Sabi and Vendease also work with lenders to provide credit to businesses on its platform. Small businesses are the lifeblood of most African economies but often lack the credit to grow.

Farm 360 in Ogun State which produces chicken, catfish and fresh vegetables uses Vendease and accesses funding for feed, its highest cost. This helped increase the daily chicken production by 20% to 2,500, said managing director Mubarak Badamosi.

At Vendease, Kara and her team plan to expand to 20 cities across Africa, including three in Nigeria, and register up to 50,000 businesses on the business platform over the next three years.

Written by MacDonald Dzirutwe, edited by Alison Williams

Our Standards: The Thomson Reuters Trust Principles.

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