Nigerian start-ups are digitising the country’s local supply chain, helping farmers sell their produce and merchants navigate high food costs.
Two such firms, Vendease and Sabi, which were formed last year, have created digital marketplaces allowing wholesalers, shopkeepers, restaurateurs and hotels to buy directly from farms and manufacturers.
Inflation has been in double digits in Nigeria since 2016, although it has eased over the past six months. Price increases peaked in March due to COVID-19 disruptions, currency devaluations and security issues in food producing regions.
The start-ups work with producers by offering credit to farms help them grow, signing supply deals, collecting produce and selling it at a specific rate to the buyers – making money on the interest and through commission of around 1%-5%.
Vendease CEO and co-founder Tunde Kara thought his three-month old company was doomed when Nigeria’s commercial capital Lagos was shut down in March 2020 to stem the spread of the coronavirus, yet it turned out to be the leg up the firm needed.
“It turns out that, that singular act of shutting everywhere down and people couldn’t directly go to the market themselves and we could because we had a licence as a procurement company helped to change the buying habits of these businesses,” Kara told Reuters.
Vendease says it helped more than 100 hotels and restaurants save $480,000 in food procurement costs in the last nine months.
Vendease says it helped more than 100 hotels and restaurants save $480,000 in food procurement costs in the last nine months.
Vendease user Michael Williams, general manager of the Ebony Life Place hotel and restaurant in Lagos, said: “… they do what we really require for most suppliers and that is to combine quality of the actual produce with price.”
