Nneka Chile

LAGOS (Reuters – Nigerian start ups digitize the food supply chain. This helps farmers and merchants to navigate high food prices.

Vendease and Sabi are two such companies that were founded last year. They have since created digital marketplaces which allow wholesalers and shopkeepers as well as restaurateurs, restaurants, and hotels, to purchase directly from farmers and manufacturers.

Nigeria’s inflation has been double digits since 2016. However, it has steadily fallen over the past six month. COVID disruptions, currency changes and security problems in food production regions all contributed to price rises that reached their highest point in March.

Start-ups partner with farmers by providing credit, helping them to grow and signing supply agreements. They also collect produce from farms and sell it to buyers at a fixed rate. This allows the buyer to make money through interest as well as a commission, which can be anywhere between 1% and 5%.

Tunde Kara (CEO of Vendease) thought his 3-month-old company would fail when Nigeria’s Commercial Capital Lagos was shut down March 2020 in an effort to contain the coronavirus. But it was the boost the company needed.

Kara said to Reuters that the singular act of closing down everything meant that people could not go directly to the markets. However, we were able to do so because we held a license as a procurement firm. This helped change buying patterns of the businesses.

Vendease reports that it saved $480,000 for restaurants and hotels in just nine months.

Michael Williams from Vendease, the general manager at the Ebony Live Place restaurant and hotel in Lagos said that “… the suppliers do exactly what is required of them. That’s to balance the quality and price of actual produce.

This is helping to solve an issue faced by African smallholders, which is lack of market access. The main reason for this problem lies in transporting goods from the rural areas to cities. Many of these farmers often have their harvests wasted.

According to the United Nations Food Agency, on-farm fruit-and-vegetable losses in sub-Saharan Africa were up to 50% prior and may have increased as there was less movement.

Sabi’s co-founder Anu Adasolum serves as CEO. The platform has 150,000 users from small businesses in five states.

She said, “What we’re trying to achieve is that merchants pay less than what they need for the products and services they obtained through us.”

Vendease, Sabi and Vendease work together with lenders to lend credit to companies on the platform. Most African economies are driven by small businesses, but they often don’t have the credit necessary to expand.

Ogun state’s farm 360, which produces poultry, catfish and fresh vegetable, uses Vendease. The Farm also has financing available for feed. Mubarak Badamosi, the general manager of Farm 360 in Ogun state said that Vendease has helped increase daily chicken production by 20% up to 2,500.

Vendease Kara and his team are aiming to reach 20 countries across Africa, a move from Nigeria’s three. They also plan to sign up to 50,000 companies on their platform within the next three year.