Agritech in Africa: How an e-Wallet solution powered Nigerian Government’s GES Scheme

In 2012, Cellulant implemented one of the largest and most impactful Agritech solutions in Africa through the use of a mobile wallet technology.  

The e-wallet which powered the Growth Enhancement Support (GES) Scheme is an electronic distribution channel which provides an efficient and transparent system for the purchase and distribution of agricultural inputs. The scheme guaranteed registered farmers eWallet vouchers with which they could redeem fertilizers, seeds and other agricultural inputs from agro-dealers at half the cost, the other half being borne by the Federal Government of Nigeria

This government initiative to distribute subsidies directly to farmers was due to a 4-year contract awarded to Cellulant worth $7.3M (KES.745M). The contract was subsequently renewed in 2016 despite a transition in the country’s government leadership due to its impact on the economy.(pdf)

Following the implementation of the eWallet, 14.5 million farmers were registered. Ninety per cent of farm inputs had reached 7.1M farmers by 2014 as the government could now deal directly with farmers to distribute fertilizer and seeds subsidies to them. As a result, income for every farmer moved from $700 to $1800.

By 2014, the farmers were eligible for financing and approximately $600m was created in lending and microfinancing opportunities. Upon implementation of the 2nd phase of the project, the food import bill dropped by 75% as farming had contributed over $30 Billion to the country’s economy.

To date, a total of $1B in government subsidies has been distributed through the scheme.

What is the Growth Enhancement Support (GES) Scheme

The Growth Enhancement Support Program (GES) is the agriculture sector component of the transformation agenda of the Federal Government of Nigeria designed to encourage the critical actors in the input sub-sector to work together to improve productivity, household food security and enhance the income of the farmers.

The GES program got the government out of the procurement and distribution of fertilizer and gets private sector actors such as banks, producers, distributors, agro-dealers to own the value chain for fertilizer distribution. The program thus stimulates demand for fertilizer by putting a cash component of the product value directly into the hands of the farmers via mobile wallets.

The scheme sought to lift 20 Million poor farmers out of subsistence into self-sufficiency from the 8 geopolitical zones namely; Ebony, Kwara, Ondo, Kogi, Gombe, Delta, Bauchi and the Federal Capital Territory.

Facts & Figure's : The impact of Cellulant's E-wallet solution for the  GES  Scheme in Nigeria

                            Facts & Figures: The impact of Cellulant’s E-wallet solution for the GES Scheme in Nigeria

What Challenges was the Nigerian Government Experiencing?

“A lot of the fertiliser ends up in the hands of political farmers and they sell it back to the market at a higher price. This has been aided by the previous inefficient governments’ procurement and distribution system,” said Nigeria’s vice president, Namadi Sambo in a statement.

Nigeria became the largest economy in Africa in 2013, however,  the agriculture sector which had always contributed up to 60% of its GDP had been declining steadily for almost a decade. For a  country with 84 million hectares of arable land the problem affecting the sector needed to be addressed at a government level.

The Federal Government  Nigerian Government sustained a subsidy program where the government was the sole actor in distribution. This did not work as only 11% of the $200m dollars subsidy reached the farmers. The remaining portion of the subsidy found it’s way back to the market and was sold to the farmers through the black market.

The net result was that agro-dealers couldn’t run viable businesses and as a result, they began defaulting on bank loans. This led banks to withhold lending to the sector that caused a decline in the availability of stock for the farmers. This would have a ripple effect on output as farmers no longer had the money to buy fertilizers and could not access financing. Subsequently, the distribution value chain was affected and this has a direct impact on the economy as the agriculture sector started slowly shrinking in scale from commercial to subsistence farming.

The Objectives of the GES program

By partnering with Cellulant, the Federal Government of Nigeria sought to achieve the following objectives;

  • To build an efficient distribution channel to deliver fertiliser to farmers by  running a mobile registration & validation system
  • Directly offer a 50 per cent fertiliser subsidy to the farmers who were then required to pay the balance through an arrangement with the banks.
  • Distribute improved seeds, agrochemicals and good farming practices directly to farmers by transmitting money directly to their mobile phones.
  • Enable banks to participate by lending to the farmers and agro-dealers by providing risk management tools
  • Empower farmers to increase yield
  • Encourage a shift from subsistence to commercial farming
  • Put 20 million farmers in mobile-driven agricultural value-chain.

Having obtained a licence from the Central Bank of Nigeria to operate a mobile payments’ service in 2012, Cellulant took to market one of the largest-scale uses of mobile commerce to drive sector transformation by rolling out an e-wallet for the Federal Government of Nigeria. The GES Scheme has since powered more than one billion dollars in subsidy payments to more than 17M farmers.

Following our successful implementation in Nigeria, the country became the first in Africa to implement the e-wallet technology. In 2017, Cellulant emerged as the overall winner of the KPMG Top 100 mid-sized companies for the successful roll-out of the e-wallet solution and it’s impact to Agriculture in Africa

We have since deployed the same technology in Liberia and Afghanistan.

Our team led by our Group Co-CEO Mr. Bolaji Akinboro in Afghanistan for the roll-out of the e-Wallet solution

Our team led by our Group Co-CEO Mr. Bolaji Akinboro in Afghanistan for the roll-out of the e-Wallet solution

From GES to Nigeria Agriculture Payment Initiative (NAPI)

During the next phase of the project; the Federal Government of Nigeria through the Federal Ministry of Agriculture and Rural Development (FMARD) approved that Cellulant should work with the financial sectors under the Nigeria Agriculture Payment Initiative (NAPI) to digitize payments in the sector. This initiative will increase the adoption rate of mobile phones in the remote areas of the country and this will encourage the Government’s drive towards financial inclusion of those who live in the hinterland.

Contact us here to learn more about your Agritech solutions in Africa.

This is the first part of a two-part series; a case study of Cellulant’s implementation of its e-wallet technology. In the 2nd part, we will explore how the technology works as well as some of the improvements we have made to address the challenges faced by farmers beyond Nigeria.