With the devastating effects of the COVID-19 pandemic across countries in Africa, Nigeria is allegedly facing a serious food security crisis. This is further compounded by the security challenges that the country is facing that are affecting the planting and production processes, as well as disrupting supply chains across various parts of the country.
The Central Bank of Nigeria had lamented the disruptions that the precarious security situation and COVID-19 health crisis was plunging the agricultural value chain into. These were exacerbating the challenges in food production and supply in the country, and across the continent. How do we ensure food security in Nigeria?
Solving Nigeria’s food security crisis
Pricepally is a startup that is primarily concerned with mitigating the worsening food crisis in the country, through the provision of easy and affordable access to food items. As the World Bank estimates, in a recent report, Nigeria’s soaring inflation and spiking prices in food items are possibly going to push more than seven million people into poverty. This harsh combined reality of dwindling purchasing power, the economic effects of the pandemic, and unsteady prices of goods and services have put many average Nigerians on the very brink of survival.
Many startups, likewise, are reeling under the burden of these forces. In spite of this, e-commerce and mobile payments in Africa have been doing great, riding on the back of mobility restrictions, and reduction in physical retail. Pricepally, as MSN reports, was one of the few startups to thrive despite the harsh consequences of the COVID-19 pandemic. This is visible in the threefold increase in sales, over the last year, as the platform has seen greater adoption and traction. What drives the success and impact of PricePally’s goal of solving Nigeria’s food security challenge?
A serial entrepreneur, with versatile experience, founding and managing over three startups, before Pricepally, Luther Lawoyin is keen on providing solutions to challenging situations, especially within Africa’s dynamic economic environment.
With his eyes set on finding innovative solutions to some of the pressing concerns of the average Nigerian, Luther’s attention fell to the increasing difficulty of getting affordable food items, and the challenge of scarcity. As he had earlier shared with DW, ‘We [my wife and I] came up with the idea of buying in bulk for us, and thought it could be a solution for a lot of people.’
Pricepally: Technology, data and partnerships
In an interview with Startup Lagos, he highlights that PricePally utilizes three main pillars to tackle the ensuing problem of food scarcity and unsteady price fluctuations: Technology, data, and partnerships.
The first of these is technology, through which a disruptive product and platform are enabled. With their platform, people can easily buy food in bulk, or split off in bulk purchase, while sharing with friends. This offers customers the advantage of cost as they are buying at a retail amount, at a wholesale cost. With cutting-edge technology, Luther identifies that they are able to aggregate the growing need and demand of customers looking to purchasing products at fair prices.
With data as the new oil, many organizations are greatly interested in the direction and insights that data gives. As such, Luther says,
In the area of partnerships, Pricepally is keen on reliance on trusted third-party organizations. They partner with companies for delivery, logistics, cold storage, and various other companies that offer ease of access to infrastructure used in enhancing their service delivery. Through these means, Pricepally co-creates value in the food sector with these other organizations, ensuring that their services are seamless and effective.
As such, partnerships with farmers are also of prime importance for the dynamic agriculture and wholesale e-commerce startup. They ensure that they are constantly offering palpable value to the farmers, as they help guarantee a buy-off of their produce. This helps to drastically reduce waste and post-harvest losses.
Reports show that Nigeria loses between 55% to 72% of cultivated fresh produce before they get to the market. The Small-scale Women’s Farmers’ Organization in Nigeria (SWOFON) claims that post-harvest losses annually have gone up to over N3.5 trillion. These are quite worrying stats if one considers how much these could be curtailed through reliable farm-to-market channels. Through its flexible market model, Pricepally has been able to reduce this drastically, and offer very affordable prices for vegetables on their platform.
Creating an affordable market for cooperative food purchase
In order to innovate effectively for a new market for consumers, Luther emphasizes that they had to identify the different problems and challenges that farmers face, prior to, during, and after planting and harvesting, and see where to offer value.
While these solutions are scalable, with significant growth potential, there are certain challenges that militate against their deployment. Luther goes on to highlight some of these challenges in logistics and mobility, especially in Lagos, where traffic is heavy, and some areas that are not easily motorable. Transportation is, as he goes on to elaborate, a huge setback, and a key driver of high costs of food items. He likewise points out the challenges that exist with stringent government regulation, emphasizing how frustrating this can be, particularly for startups looking at making a greater impact. The heavy hammer of regulation has had to stall the progress of many Nigerian startups, even at the prime period of growth. While these apprehensions have created tensions in the growth process of these startups, they have not discouraged investors from offering financial support.
Earlier in the year, the food cooperative startup had raised undisclosed six-figure funding from Samurai Incubate, Launch Africa Ventures, and Angel Investors. With these funds, and the momentum already built over the year, the startup is broadening its reach and presence to other cities across Nigeria, especially Abuja which is close to the north, and from which most agricultural products come as well as to Port-Harcourt. With these, greater linkages of the cities would help to even out the pricey costs of food items across the country, and offer people better value for their money.