Leveraging Agribusiness to Solve the Root Cause of Insecurity in Nigeria, Youth Unemployment

To create a buffer against regional insecurity, Babban Gona helps smallholders transition from subsistence to profitable commercial farming.

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I confirm that I am fully aware of the eligibility criteria, and based on its description, I am eligible to apply to the CSV Prize 2017.

  • Yes, I'm eligible

Preferred language

  • English

Organization name

Babban Gona

Year founded

2012

Initiative stage

  • Scaling (the solution has passed the previous stages and is growing its impact on a regional or global scale)

Annual budget in 2017 (USD)

  • Over $5mil

Number of beneficiaries impacted so far

  • 10,000 - 50,000

Organization type

  • Social enterprise

Secondary Focus Area

  • Rural development
  • Nutrition

Headquarters location: Country

  • Nigeria

Headquarters location: City

Makarfi Town, Kaduna State

Location(s) of impact

Kaduna, Kano and Katsina States, all in Northern Nigeria

Website

www.babbangona.com

Facebook URL

https://facebook.com/OfficialBabbanGona/

Twitter URL

https://twitter.com/BabbanGona

Problem: What problem is this initiative trying to address?

Babban Gona is tackling the root cause of insecurity in Nigeria by creating entrepreneurs to run scalable and financially sustainable farm enterprises. Despite steady economic growth in the last two decades, a high rate of youth unemployment, almost 50%, has led to rising insecurity, triggering three domestic insurgencies. Due to its high need for labor and low skill requirements, farming has the potential to create jobs and draw millions of young people into the sector, serving as an economic buffer against insecurity.

Solution Summary: What is the proposed solution? What do you see as its most promising aspects for creating shared value?

Babban Gona (BG) empowers smallholder farmers to transition from subsistence to highly productive and profitable commercial operations. We accomplish this by franchising thousands of farmer cooperatives across Northern Nigeria. Due to its low economies of scale, farming is typically unattractive to youth as most smallholders own tiny, fragmented plots of land, and are unable to afford critical yield-enhancing technologies. Further, young people typically have relatively little savings and limited access to land. To reduce these barriers to entry, Babban Gona delivers an integrated package of agronomic and financial training, farm inputs, and marketing services, on credit to each cooperative, enabling its members to increase the productivity and profitability of their farm enterprise. If youth see farming is a profitable venture, it would be harder for extremists to recruit them, offering a sustainable path to increased rural wealth and enhanced food security.

Impact: What is the impact of the work to date? Specify both the social and the environmental impact of your work

With over 40% youth membership, Babban Gona has helped smallholder farmers increase their profitability by up to 3x the national average, generating over $1 million in net income. Our members save on the costs of farm inputs since we buy these in bulk on their behalf and they are able to obtain yields double the national average via individualized input packages offered after soil analyses. As we work along the entire value chain from seed production through harvesting, our members grow maize with high-energy content and reduced levels of aflatoxin, earning quality and delayed sale premiums by marketing their produce in the 6-9 months after harvest when prices appreciate. To date, we have disbursed more than 40,000 loans with 99.99% repayment rate, placing 27,000 ha under sustainable cultivation and providing 200,000 rural people with access to healthy food.

Financial sustainability plan: How is this initiative financially supported? How will you ensure its financial sustainability long-term?

The model was designed to be sustainable from its inception; generating positive gross margins, with a focus on scaling to effectively amortize the fixed costs of running the business. To better amortize our fixed cost, from inception, we focused on dramatically growing revenues approximately 4x year over year. We have created efficiencies in our model, as can be seen from the fact that year over year (2015 to 2016) SG&A as a percentage of revenue reduced from 41% to 27%. This has led to BG attaining a positive net income for the first time in FY2016. BG has primarily relied on debt as the main source of financing and has made timely repayments on its debt, maintaining a 100% repayment rate thus far.

Unique value proposition: What makes your initiative innovative? How does your project differ from other organizations working in the same field?

BG is a high impact, financially sustainable and highly scalable social enterprise. It is the only company providing loans to Nigerian small holder farmers on a large scale and at competitive rates while delivering a full suite of agricultural products and services to each farmer. Instead of buying our farmer’s produce, we market it on their behalf; thus ensuring 100% alignment of interest. We have maintained high loan repayment rates of +99.99% and scaled 250x since 2012.

Founding story: Share a story about the "Aha!" moment that sparked the beginning of this initiative.

In 2007, I relocated to Port-Harcourt and witnessed firsthand how insecurity manifested. With 20m young people entering an oversaturated labor pool over the last two decades, youth unemployment skyrocketed and many in the Niger Delta region were lured to join kidnapping gangs and militant groups, turning what was known as the Garden City into a war zone. With more than 80m youth expected to join the workforce in the next two decades, people often say this is a ticking time bomb. I think the bomb has already exploded. To do my part to solve this challenge, in 2012, I moved to a small village in Northern Nigeria at the center of the area most recently impacted by the spread of insurgencies, brutal bombings and searing poverty, with an idea. Could we create an economic buffer to halt the spread of insecurity by unlocking the power of agriculture as a job creation engine?

Where did you hear about the Nestlé Creating Shared Value Prize?

  • Nestlé page or contact

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Photo of Mouhamadou Moustapha Seck

Good initiative. Strength ahead.