AGRA Press Release
[6 th March] … AGRA has today released the 3 rd edition of the ‘African Agribusiness Outlook
Report’ which sheds light on the impact of the “Triple Crisis” – Covid-19 pandemic, climate
change, and the Russia-Ukraine conflict – on small and medium-sized agribusinesses in Nigeria,
Zambia, and Tanzania.
The report, which is jointly produced by AGRA and IPSOS, surveyed 1,623 small and
agribusinesses in the rice, maize and tomato value chains in Nigeria, Zambia and Tanzania, and
the soybean, maize and tomato value chains in Zambia.
The study examined the impact of various measures taken to support SMEs’ performance
during the triple crisis, revealing that a substantial proportion of agribusinesses have
experienced severe declines in revenue during this period, with only some managing to recover.
The report states: “Agribusinesses in agricultural value chains in Nigeria, Tanzania and Zambia,
have been hard hit by the “triple crisis” of Covid-19, climate change and the Russia-Ukraine
conflict. Although the larger businesses were hardest hit in Nigeria and Zambia in 2020, these
businesses appear to have been better able to recover as at 2023.
While supply, demand, and operational costs were significant challenges during the peak of the
Covid -19 pandemic, the report reveals that businesses continue to grapple with soaring
operational expenses in the wake of climate-related impacts and the ongoing conflict in Ukraine.
The report discloses that 58% of SMEs surveyed have experienced substantial revenue
declines of 20% percent or more throughout the “triple crisis” period.
Furthermore, the report reveals some of the strategies employed by businesses to stay afloat
during these challenging times including injecting additional capital, cost reduction measures,
and streamlining their product lines.
Dr. Agnes Kalibata, President of AGRA, noted that Agribusinesses have exhibited remarkable
adaptability, innovation, and determination, on the one hand, but continue to struggle amidst
business disruptions through lockdowns, supply chain disruptions, productivity decreases and
reduced consumer demand.
Dr. Kalibata remarked, “We are all aware of the challenges they are facing, however not much
has been done to look at the cumulative impact of the triple crisis and the specifics of severity
that the agribusinesses are grappling with. As we reflect on the impact of the triple crisis on
Agribusinesses in Africa, we must also recognize the incredible potential these enterprises
possess.”
She noted that as drivers of farmer resilience, job creation, economic development, and poverty
alleviation, African Agribusinesses hold the promise of fostering greater social inclusion and
reducing inequality across the continent.
“There is an urgent need for measures to effectively address and alleviate the impacts of these
crisis on the sector that serves as the primary employer, engaging over 70 percent of Africa’s
population in economic activities and contributing more than 30 percent to the continent’s
economies,” Dr Kalibata emphasized.
The report calls for more collaboration between policymakers, financial institutions, and
development organizations to provide supportive ecosystems that empower the Agribusinesses
and respond to their three top asks: access to affordable finance, fostering a business-enabling
environment, particularly with stable and predictable policies and supporting an effective
regional trade system.
The report recommends more focused, tailored, and concerted investment and support to
improve quality and quantity of produce at the farmer level.
This report recommends the adoption of policies that encourage the development of financial
products specifically tailored to the agricultural sector and improving financial policies to
enhance access to affordable credit.
To optimize the efficiency of SMEs and reduce transaction costs, there is a call for improved
market information. Enhancing information services related to supply and demand is vital, as it
can facilitate better decision-making for agribusinesses. A well-informed market, it notes will
lead to improved supply efficiency. The report calls upon governments to reduce fuel costs,
mitigate currency fluctuations, ensure timely fertilizer subsidies, streamline business registration
processes, and efficiently manage storage facilities.
Summary of key findings
Extent of Revenue Drops
In Nigeria, 51 percent of SMEs reported a decline in revenue since the 2019 Covid-19
outbreak.
In Tanzania, 44 percent of SMEs experienced a drop in revenue.
In Zambia, 21 percent of SMEs reported a decline in their revenue.
impact of the crisis on different sectors and business sizes
In Nigeria, maize was the hardest-hit crop in 2020. Medium-sized businesses were
affected the most but recovered faster than smaller businesses.
In Tanzania, maize was also the hardest-hit crop and struggled to recover compared to
other value chains.
In Zambia, tomatoes and soybeans were significantly impacted. Tomatoes recovered
faster, and medium-sized businesses were hit hardest by Covid-19 but also recovered
more quickly.
Impact of climate change
Unreliable rainfall is perceived as a very big problem in Zambia (54 percent) and Tanzania
(62 percent) but a lower concern in Nigeria (32 percent).
Causes of Revenue Decline
- In Nigeria, the high cost of transport was identified as a leading cause, accounting for 85
percent of the challenges faced. - In Tanzania, low-profit margins were a significant issue, with 83 percent of SMEs
affected. - In Zambia, low-profit margins also posed a challenge, impacting 77 percent of
businesses.
strategies to mitigate the revenue decline and financial challenges
- Capital injection: SMEs in Nigeria injected more capital into their businesses (42
percent), followed by Zambia (32 percent) and Tanzania (24 percent). - Reduced staff costs: To cut expenses, SMEs in Zambia reduced staff costs (24
percent), followed by Tanzania (33 percent) and Nigeria (36 percent). - Loan uptake: While loan uptake grew over the past few years, only a minority of SMEs
took out loans to cope with the crisis, citing perceived affordability as a barrier. Currently,
the highest loan uptake by businesses is Zambia (15 per cent) followed by Nigeria (12
percent) and Tanzania (10 percent).
The report, ‘From Crisis to Opportunity: The 2023 Africa Agribusiness Outlook, is attached on
the email, alongside a fact sheet containing key figures from the report. .
About AGRA
Established in 2006, AGRA is an African-led and Africa-based institution dedicated to placing
smallholder farmers at the core of the continent’s burgeoning economy. AGRA’s mission is to
transform agriculture from a mere struggle for survival into a thriving business. In collaboration
with its partners, AGRA catalyzes and sustains an inclusive agricultural transformation aimed at
increasing incomes and enhancing food security in 11 countries.
/ENDS/