Risk Management and Solutions – The way forward for Agribusinesses in Nigeria

Risks are an integral part of agriculture. As such, agroindustry stakeholders, every day, are confronted with uncertainties, and are bound to make decisions that in one way or the other, affect the profitability of their operations, choosing among alternatives in a bid to reduce the financial effects of sundry risks.

 Be it reduced yield or added economic costs, this stark reality is what makes agricultural risk management a big issue in regions where agriculture is a key means to economic empowerment. This becomes even more compelling and interesting when viewed against the backdrop of Nigeria’s quest for an agribusiness revolution.

A couple of months back, the Federal Executive Council (FEC), as part of efforts to diversify the economy, approved the implementation of a policy initiative themed “Green Alternative’’, with the intent of making agriculture the biggest alternative to oil and gas business. The Minister of Agriculture and Rural Development – Chief Audu Ogbeh, while introducing the government initiative to the media, explained that “The Green Alternative’’…outlines virtually everything we need to do, every policy we need to undertake to achieve self-sufficiency in agriculture and also to become a major exporter of agricultural products, a position we occupied many decades ago.’’

Throwing more light on the initiative, Nigeria’s Vice President, Professor Yemi Osinbajo, assures that the Green Alternative, while contributing to the growth of the economy, will steer up interest in Agribusiness in the hearts of Nigerian entrepreneurs and youths at large, adding that “the hope is that this would reduce the import bill weight on the Federal Government, rebuild capacity in food production in Nigeria and create more employment opportunities.”

This indeed is laudable. Nevertheless, though Agribusiness has proven, over time, to be very lucrative, the risks often associated with it, like fire outbreaks, disease outbreaks, weather, erosion, flood and other malicious acts are currently not being well managed in Nigeria, and as such, stand as a great inhibition to the anticipated Agribusiness success and profitability.

Aside this category of risks, there are also price risks, financial risks, institutional risks and personal risks, which need to be managed. Even though some of these risks are easily preventable, agriculture is affected by many uncontrollable events that are often related to weather and the environment, all of which can cause swings in Agribusiness income.

That being the case, it becomes imperative that, for Agribusiness in Nigeria to become more viable and successful, there needs to be an appropriate understanding of Risk Management and Solutions. In this vein, learning new ways to an effective and secured Agribusiness becomes the first step to protecting Agribusinesses from loss.

It is in furtherance of this necessity that Leadway Assurance Limited introduced the Agribusiness Risk Management and Solutions seminars, the first edition of which was held in Lagos, in June, 2016, to aid Agribusinesses in choosing from among alternatives to reduce the financial effects that result from various uncertainties, proffering solutions that will reduce production risks while advancing risk management.

Executive Director, General Business, Leadway Assurance Co. Ltd., Adetola Adegbayi, lending credence to this initiative, emphasizes the need for Agribusiness practitioners to seek cover for the risks involved. In her words, “We want to ensure that those who invest in Agribusiness and fall into loss positions are empowered to continue their business.”

Bode Opadokun, Managing Director of the Nigerian Agricultural Insurance Corporation (NAIC), recently, highlighted the pending risks of having an Agribusiness in areas more prone to disease outbreak and other natural disasters, stressing the need for Agribusinesses to be insured by a reliable insurance provider against impending risks.

The first edition of the seminar held in Lagos brought together agricultural entrepreneurs from different specializations such as fish farming, poultry, crop farming, livestock farming etc., with Dr. Samson Ajibola, Head, Agriculture and Micro Insurance unit, Leadway Assurance Company Limited and Lovemore Forichi, Head of Agriculture, Reinsurance Africa, as facilitators.

Head, Agric Insurance, Leadway Assurance Co. Limited, Dr. Samson Ajibola,(Left); Director, Pula Advisors, Rose Goslinga; ED, General Business, Leadway Assurance Co. Ltd, Ms. Adetola Adegbayi; and Head, Agriculture Reinsurance Africa, Swiss Reinsurance Co. Limited, Lovemore Forichi, during the seminar on Agriculture Risk Management and Risk Transfer Solutions organized by Leadway Assurance Company Limited.

The success of the first edition of the seminar and the revolutionary effect it portends for Agribusinesses in Nigeria, as well as its economic development potentials, highlighted the need to organize more seminars in other parts of the country, especially in the northern parts.

This is what informed the scheduling of a second edition of the seminar, which is slated to hold in Kaduna, on September 22, 2016.

According to the organizers, the programme would be of immense benefit to stakeholders such as large-scale farmers, investors and financiers, agribusiness consultants, insurance brokers, risk surveyors, loss assessors and adjusters working within the Agribusiness value chain.

Though admission to the seminar is free, would-be participants are expected to register ahead of time by clicking: http://www.leadway.com/register/

Leadway Assurance Company Ltd is one of Nigeria’s foremost insurance companies, with a reputation for service excellence and customer focus. Over the years, the company has enjoyed a steady growth in its commitment to providing integrated insurance and financial services to its numerous customers.

Established in 1970, Leadway has always honored its underwriting commitments and has earned a reputation for excellence in claims handling. With its financial capacity growing over time, it now boasts of an ability to underwrite risks of very high magnitude in the oil and gas and manufacturing industries. It also offers subsidiary financial services like Bond, Secured Credit, Miscellaneous Financial Losses and Fund/Portfolio management.

Go here to register for the seminar for free at: http://www.leadway.com/register/

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