A report by the Financial Derivatives Company (FDC) has said that unless Nigeria deploys digital platforms to improve efficiencies in production, transactions, stakeholder relations and investment opportunities, the country will not be able to drive economic development or attract investment in the agricultural sector.
The monthly FDC publication released yesterday noted that if well handled, the sector could facilitate economic growth through inter-sectoral linkages and provide sustenance for households.
It added that in the last two decades, agriculture contributed at least 20 per cent to real Gross Domestic Product (GDP) in Nigeria.
It, however, stated that the sector has not been able to adequately drive economic growth due to Nigeria’s oil-focused economic structure and internal sectoral problems.
According to the report, if the government focuses its efforts on encouraging the growth of the digital platforms, it can lower the cost of information dissemination to farmers from investors and the government.
It noted that it could reduce the production costs by providing an avenue for easier access to agriculture tools, equipment and machinery as well as aid the investment process by connecting farmers with credit facilities and interested investors.
The FDC report noted that paying attention to the digitalisation of agriculture will reduce the time it takes to transfer funds and provide a smoother transaction process between farmers and stakeholders.
It said: “If the government wants to promote the use of digital agriculture platforms in Nigeria, it must assist in tackling some obstacles these platforms face.
“One problem is the low skill level in the agriculture sector. Without technically skilled personnel, these platforms are at risk of producing poorly designed solutions, which will discourage investors.
“Also, the companies will not be able to build a platform that can adequately tackle the underlying information and communication issues. If the government wants to promote digital platforms, the government must encourage more graduates to pursue a career in agriculture.
“A way to encourage this would be through incentives for graduating from this field like scholarships or grants for students interested in agriculture and technology.”
The report urged the government to encourage the use of digital agriculture platforms by providing incentives for digital agriculture start-ups.
“They can also improve and regulate access to data and information necessary in digital agriculture, offer training at different levels of the agriculture value chain and on different digital technologies.
“Government can also create incentives to encourage the use and consumption of digital products relying on subsidies, voucher systems and tax deductions, promote public-private partnerships with technology suppliers, strengthen the technical capacity and market linkages of suppliers to better react to market demand.
“If the government promotes such platforms, output in agriculture, job creation and agriculture’s contribution to the GDP will all increase. If Nigeria wants to achieve sustainable growth, the government must recognise the role of digital agriculture platforms in the future of the agriculture sector.
“The use of digital platforms must be promoted to tackle information dissemination issues in the production and distribution stages of the value chain. They also improve access to mechanised agriculture tools and facilities that will improve productivity and reduce wastage,” it said.
According to the report, agriculture will help position Nigeria on the path of sustainable economic growth and development.
It listed various examples of the platforms, both nationally and worldwide already in existence to include AFEX, a Nigerian platform established in 2014 and Farmrowdy, another Nigerian platform created in 2016.
FDC also mentioned MyAgro, a digital platform set up in Mali, which uses a mobile layaway model that gives farmers the freedom, flexibility, and security of making payments whenever, wherever they want, interest-free, as one to be replicated in Nigeria.