A paint bucket of short-grain rice (around 5kg) was now selling for N9,500 ($5.63), and long-grain had shot up to N11,000 ($6.52). Earlier this year, she could grab either for about N5,000 ($3.57) or N6,000 ($4.29), back when the exchange rate was N1,400 to $1. Even eggs, which used to be an easy buy at N3,000 ($2.14), per crate had painfully jumped to N5,600 ($3.32).
“Everything is so costly now. The best thing would be to start buying in bulk next year,” she lamented, glancing at the piles of goods that now felt as unreachable as the sky.
Nigeria, once Africa’s largest economy, has experienced its fair share of economic ups and downs, but recent sky high inflation has taken a harsh toll on its citizens. Food inflation, which spiked to a 28-year high of 40.87% in June before slightly easing, has been a major factor in pushing overall costs up.
According to the National Bureau of Statistics (NBS), rice, a staple for most Nigerians, saw a massive price jump of 152.92% per kg in just one year, going from N757.06 in September 2023 to N1,914.77 by September 2024. Beans have seen an even more shocking price surge. In September 2024, 1kg of brown beans was selling for N2,738.59, a 281.97% increase compared to last year.
The UN reports that Nigerians spend over 65% of their income on food. Even with the minimum wage raised to N70,000 (a modest $41.89), the increase will do little to shield wallets from food prices that consume more than half of their earnings, leaving families in an endless chain of sacrifice. If hunger were a person, you’d find it wandering every Nigerian street, shoulders slumped.
Agritech takes on Nigeria’s inflation crisis.
The widening gap between what food should cost and what Nigerians pay is not mere coincidence. As Nnaemeka Ikegwuonu, founder of ColdHubs, puts it, this results from a fractured agricultural supply chain.
“You’re dealing with seasonality on one hand and a severe lack of infrastructure on the other to store and manage food effectively. Food production is happening in communities, villages, and hamlets where transporting the produce to urban centres is incredibly challenging due to poor road access. There is no storage infrastructure to aggregate the food initially, and almost no facilities to preserve it,” Ikegwuonu said.
Poor storage and distribution mean a massive amount of food never reaches the market. This is where ColdHubs steps in, a tech-driven company powered by solar walk-in cold rooms, designed to help farmers and traders save their produce from spoiling too soon, extend the shelf life of their fruits and vegetables and increase their income.
“You need a stable supply chain. Even outside the harvest seasons, cold storage facilities allow you to preserve food until the next season. So, ideally, you’d have a cold storage facility within the production clusters to quickly store the freshly harvested produce, ready for distribution when demand rises again,” he stressed.
According to the Food and Agriculture Organization of the United Nations, up to 40% of Nigeria’s food is lost before it even reaches consumers, rotting away in fields, warehouses, or along transit routes.
Tunde Kara, CEO of Vendease, a marketplace allowing African restaurants to order directly from farms and food manufacturers, shares a similar sentiment. “Nigeria’s fragmented food supply chain has long been a hurdle,” he said.
To tackle this challenge, the company has learned to read the pulse of the market, streamline inventory, predict demand, and work closely with suppliers. Through these strategies, Vendease managed to shrink food waste to less than 0.2%, a quiet victory in a world where waste often goes unseen yet costs so much.
With up to 40% of food never reaching the market in Africa’s most populated country, the pressure on what remains increases. This usually means more reliance on imports, costing as much as $10 billion. And with the Naira’s value dropping and import costs skyrocketing, food keeps getting more expensive.
Through volume-tiered pricing, it encourages bulk purchasing, a small act with big ripples, which helps food businesses manage costs. “For instance, one kilogram of tomatoes is 17% cheaper on Vendease’s platform than in the open market,” the CEO noted. This price drop directly eases the financial burden on vendors and customers alike.
According to Kaara, CitySubs, a food business that joined Vendease, was able to cut 23% of its procurement costs. “On average, food businesses see at least a 10% reduction in procurement costs within just the first three months of using Vendease’s services.”
He explained that Vendease has successfully moved 1.5 million metric tons of food by building strong relationships with a wide network of suppliers, negotiating better prices, and ensuring a stable, efficient procurement process. “Our goal is to create a resilient food supply chain that can withstand economic fluctuations,” he stated.
Agritech’s root needs government support to grow.
Shortly after taking office, President Bola Tinubu declared a state of emergency on food security, a move that initially sparked hope. However, despite these efforts, the situation remains largely unchanged. While agritech companies, mostly privately owned are pitching in to help with food security, there is still a long way to go to feed over 200 million people. Government intervention is critical.
“I think the government needs to invest in large-scale infrastructure, especially in irrigation, so that smallholder farmers can practice year-round agriculture. Investing in irrigation is crucial to allow cultivation during the dry season,” Ikegwuonu stated.
He also pointed out the need for subsidies on high-quality seeds. Farmers need support to afford the right seeds instead of recycling the same ones year after year, which gradually lose quality and reduce yields. Alongside seed subsidies, fertilizer support is also essential too, to directly impact the quality of harvests. For him, the path forward is clear, the government must make these tools a priority.
Harvesting ideas, but short on fund
The fractured agricultural value chain is not just a Nigerian problem, it is Africa’s struggle. Despite holding 65% of the world’s arable land, hunger and chronic malnutrition remain rampant, with nearly 40% of food going to waste before it ever reaches anyone’s table.
These challenges have sparked a wave of innovative agritech solutions, with inventors finding creative ways to mend the broken system. But, money, the very lifeblood of any growing industry, flows too slowly.
For instance, while $16.8 billion was raised globally for agritech in 2023, according to AgFunder, Africa only received $275 million. This amounts to just 1.6% of the global funding, far from what the continent requires. Since 2014, Africa has raised $2.4 billion in agritech funding, but by 2024, only $157 million had come in.
“If investment in Nigeria is an indicator of the overall health of African agrifoodtech then we might be in for another down year,” the report noted. “The country has fallen from being the most active regional market in the sector to the third, closing just five deals worth $15 million so far in 2024.”
Truly, agritech may still have a long way to go in Africa’s most populous country, but it carries the promise of transforming Nigeria’s food systems and unlocking a brighter economic future.
