Making markets work for the poor in Nigeria
Client name: UK Department for International Development (DFID)
Coffey is working to increase 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, currently growing at a rate of 11.5% per year. This can be attributed to high population growth, urbanisation and increased incomes.
While the sector is growing quickly, 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 (GEMS 4) project seeks to tackle the underlying inefficiencies in the system and work towards promoting pro-poor growth in the sector.
Catalysing change through M4P - This project is 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, GEMS 4 aims to facilitate the synergies that already exist within the sector and encourages 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.
GEMS 4 is working with business associations, service providers, producers, retailers, wholesalers and other actors involved in the market, linking them so they work together and serve each other better. Additionally, the project is building local capacity and changing market incentives so the sector better meets the long-term needs of the poor.
Empowering women - Women play a significant role in the wholesale and retail sector in Nigeria. They are also more likely to feel the effects of poverty than men. GEMS 4 built a focus on women’s economic empowerment directly into the design phase. This is to ensure that the growth of the wholesale and retail sector is accompanied by widened economic opportunities for women.
Results to date
- over 500+ women have been trained in micro-distribution and entrepreneurial skills and organised into wholesale buying groups. These groups enable members to aggregate their purchasing power and buy merchandise at wholesale prices directly from distributors, thus lowering costs and increasing profit margins
- micro-financing services that allow for group borrowing and individual saving have been developed thanks to a collaboration between GEMS 4 and the formal micro-banking sector. These services allow micro retailer women to access capital and widen their economic opportunities
- GEMS 4 engaged successfully with the Central Bank of Nigeria (CBN) to support the CBN’s review of regulation of mobile money payments, and brokered the drafting of an internal report from CBN representatives to the Bank’s Management recommending the revision of transaction limits for traders in wholesale and retail market systems
- with facilitation from GEMS 4, 60 members of the Fresh Fruits and Vegetable Dealers Association of Nigeria have been trained as Master Trainers on good handling practices for fresh perishable produce (and further courses are on-going). These Master Trainers will train an estimated 900 handlers of perishable produce in collection centres and markets in Northern Nigeria
- increased growth, income and employment, especially for poor men and women, in wholesale and retail markets in selected states - 10,000 full-time equivalent jobs and improved incomes for 500,000 people
- improved performance and inclusiveness of the wholesale and retail market systems to benefit the poor as workers and consumers.
- inputs, processes, products, services that benefit poor men and women successfully established through market mechanisms (or through sustainable public funding)
- an improved enabling environment for wholesale and retail through business-friendly regulations, industry-driven incentives for domestic investment and sector-wide inclusive practices
- innovative business models that bring about sustainable change to the industry as a whole and improve the opportunities for the poor