Making markets work for the poor in Nigeria
Client name: UK Department for International Development (DFID)
Coffey has achieved significant success in increasing incomes and employment opportunities in the wholesale and retail sector in Nigeria.
Nigeria’s wholesale and retail sector is a key component and driver of the country’s GDP growth. However, while the sector is growing, inefficiencies within the distribution chain have resulted in lower prices for producers, lower wages for employers, lower profits for businesses and a higher cost of living for consumers.
The Growth and Employment in States 4 (GEMS4) programme, a £16.8m, five-and-a-half-year, UK Department for International Development (DFID)-funded programme, has been seeking to tackle the underlying inefficiencies in the system and work towards promoting pro-poor growth in the sector.
GEMS4 has been using the Making Markets Work for the Poor (M4P) approach to diagnose the constraints and inefficiencies within the sector and to design interventions that facilitate systemic change. M4P works on the assumption that everyone, even those in poverty, operate within a market system. Therefore, by bringing market actors to the same forum, GEMS4 has facilitated the synergies that already exist within the sector and encouraged them to align their incentives for a mutually beneficial outcome. Through this facilitation, a systemic change will alter these systems to work more effectively and sustainably for the poor, to help address poverty and improve livelihoods.
As programme manager, Coffey has worked with traders, farmers, business representatives and legislators to improve rural-urban linkages in specific markets. GEMS4 has been active across various parts of the wholesale and retail sector, with specific focus on areas such as agri-business, meat and leather, waste management and small-scale retailing. Our interventions have drawn on local knowledge, proven practices and key innovations to help increase incomes, create jobs and strengthen the ability of smaller farmers and traders to develop sustainable businesses that enhance their local economies.
GEMS4 has achieved its targeted results:
- 528,210 people had their incomes increased (against a target of 500,000)
- 12,737 full time equivalent jobs have been created (against a target of 10,000)
- 5 out of 5 outcome indicator targets were achieved or surpassed
- 8 out of 8 output indicator targets were achieved or surpassed
In addition to logframe results targets, real world impact was seen across various sectors.
Economically effective waste management
GEMS4 encouraged better urban waste management by introducing new business models for recycled waste aggregation and community waste collection. Working across various states, GEMS4 has raised awareness of the opportunities available in the sector, both to job seekers and firms; and facilitated linkages between aggregators and off-takers. As a result, more than 1,000 sustainable jobs have been created in less than a year. Further expansion is expected in other states with new financing mechanisms now available, and the larger concession-based model is being explored.
Coordination support for rice farmers
GEMS4 has worked with private sector agricultural support service providers, Green Sahel Agro Services and Babban Gona, to introduce agribusiness support services for rice farmers in Kano and Jigawa states. The support service model has improved farmers’ coordination and their access to inputs, postharvest services and premium markets. By September 2017, 21,251 rice farmers increased their incomes through sales of rice paddy to commercial mills and thousands more had registered with the agro-support service providers.
Better handling practices for better incomes
GEMS4 worked with the Fresh Fruit and Vegetables Dealers Association of Nigeria (FFVDAN) and the Agriculture Development Projects (ADP) of Kano, Kaduna and Lagos states to train master trainers on Good Handling Practices (GHP) for perishable produce. As a result of this activity, more than 50,000 people have subsequently increased their incomes.
Buyers groups for improved negotiating power
GEMS4 improved the supply chains and market conditions for micro-retailers by introducing wholesale buyers groups and buyers clubs, which brought micro-retailers together and improved their negotiation power for wholesale products. This allowed the micro-retailers to secure supplies at cheaper prices and achieve a greater profit. Cumulatively 106,069 retailers benefited from increased incomes.
GEMS4 Case Studies
Good Handling Practices (GHP)
Adamu G. Mohammed lives in Igabi LGA of Kaduna State. He is a retailer of tomatoes and peppers in Chechenya Market and was trained in Good Handling Practices in October 2014 by a GEMS4 GHP master trainer.
Since the training he has changed his approach. He washes, sorts and grades his produce as he was taught. As a result of his new practices he is able to sell his produce for higher prices. He currently sells a 5kg basket of well-handled peppers for N700. When he had no GHP skills he could only earn N600 per basket.
Overall he has noticed that his gross profit from sales has increased from around N5,000 – N6,000 monthly to about N9,000 – N10,000 monthly. His success has been noticed by other traders in the market and fellow tomato and pepper sellers, and even okra sellers, have also started copying him and are now using GHP.
Women black soap producers
Oyebiyi Ijagun is a member of the Ife-Sowapo black soap making cluster in Ede Community of Osun State. Black soap making is her main source of livelihood, but work outside the home is frowned upon by her husband so she can only sell at the local market or by trade to passers-by.
The situation changed when Kasmo Ltd, an off-taker working with GEMS4, began to procure soap from her community. Oyebiyi is now part of a cluster group of women that has been trained in making better quality soap in the vicinity of their homes. Kasmo’s agents pay N830 per kilo for the quality black soap, whereas she only receives N500 per kilo in the weekly market.
“Since GEMS4 introduced us to KASMO and they started coming to buy from us, my business has increased in quantity and quality," said Oyebiyi Ijagun. "I am very grateful to GEMS4 for this.”