From Isaac Anumihe, Abuja
A foreign firm, Hello Tractor, has promised to invest $1 million in tractors to assist small-scale farmers mechanise their operations.
Hello Tractor would provide loans for tractor-purchasing which would be repaid from revenues earned by leasing them to local farmers.
Speaking at the unveiling of the pay-as-you-go tractor-financing scheme for agripreneurs, in Abuja, Senior Vice President, Africa Programme, Adesuwa Ifedi said that already the programme has enabled tractor purchases in the states of Nasarawa, Abuja and Enugu.
“These purchases could make tractors accessible to thousands of smallholder farmers via the increasingly popular Hello Tractor leasing platform sometimes referred to as Uber for tractor.
“Hello Tractor offers software and tracking devices that allow farmers to book tractor services from local tractor owners via a mobile phone app.
“The pay-as-you-go model provides financing for entrepreneurs who want to create jobs by capitalising on the demand for tractor services on African farms, but who lack traditional forms of collateral.
“It’s a way to unlock capital for youth who have strong business skills that can help transform African agriculture but are often overlooked by private equity investors,” she said.
According to her, globally there are roughly 200 tractors per 100 square kilometres of agricultural lands, but in sub-Saharan Africa, there are only about 27. This, she said, is illustrative of a mechanisation deficit that has a significant impact on farm productivity and local economies in a region where most people depend on smallholder farming for income.
“Hello Tractor is one of many new agritech start-ups emerging across the continent that are finding business opportunities in addressing this and other farming challenges. However, while private equity groups and large impact investors have provided more than $5 billion for tech startups in Africa, very little of that financing has gone to young agritech entrepreneurs” she said.
Ifedi noted that Heifer International is stepping into the breach to demonstrate the potential of agritech investments to generate jobs for the 10 and 12 million young people enter the workforce every year in Africa– and in an economy that, according to the African Development Bank, generates only three million formal jobs annually.
Earlier, the Permanent Secretary, Ministry of Agriculture, Dr Ernest Umakhihe, has signed an agreement with the government of Brazil to acquire 10,000 units of tractors with implement and 50,000 units of assorted equipment with an in-kind loan at $1.2 billion.
The permanent secretary who was represented by a director, in the ministry, Engineer Abdullahi Abubakar, regretted, however, that the arrangement would have materialised by now if not for the COVID-19 pandemic.
“It’s our hope that the Nigerian farmers will benefit from this gesture when it is made available very soon” he noted, while appreciating the innovation by Hello Tractor and Heifer International for supplementing the efforts of the Federal Ministry of Agriculture and Rural Development Subsidy Programme where agro-machinery and agro-chemicals are procured and sold to farmers every year.
Also, the Chief Executive Officer (CEO) of Hello Tractor, Jehiel Oliver, said that in Africa, subsistence farmers face a lot of challenges ranging from lack of access to finance, lack of technology and organisation.
He said that in Africa, less than two per cent of commercial banks lend money for agricultural purposes and even less than that lend to mechanised agriculture.
So, it is against this backdrop that Hello Tractor and Heifer International stepped in to fill the gap.