Agriculture in Nigeria holds vast opportunity
for wealth creation. This is because the agricultural potential is vast. With
over 84 million hectares of arable land, abundant water and cheap labor,
Nigeria can easily become a major player in global food and agricultural
markets.
To unlock this potential, President Jonathan launched an Agricultural Transformation Agenda when he assumed office in 2011. The focus of this was to reduce Nigeria’s expenditure on food imports (totaling over $11 billion) and instead, raise agricultural productivity and value-addition. Specifically, he made a conscious decision to refocus the sector on private sector engagement and end decades of government domination.
These reforms are working, as investments from the private sector have soared. The fertilizer sector and the gas industrialization policy have combined to open up the sector to new investors. Today, $5 billion of new investments in fertilizer manufacturing are ongoing by Dangote, Indorama and Notore amongst others. Nigeria expects to become a net exporter of fertilizers within three years. Nigeria will be on global exhibition.
Investment opportunities abound in the production of local staple crops like rice and cassava to reduce the country’s dependency on food imports. For example, the new rice self sufficiency policy will directly save Nigeria $2.5 billion annually and put this into the hands of our rice farmers and rural communities. The government has also embarked on free distribution of high yielding rice varieties, provision of fertilizers and mechanized services, supported by small scale irrigation, rice production has exploded in the country. As a result, within two years, our national paddy rice production rose by 4.3 million MT. The number of integrated modern rice mills in the country rose from 5 to 15 within two years, all processing the local paddy into high quality finished rice. Indeed, the government’s policy is attractive to investors who seek to both farm rice paddy as well as process these by operating integrated rice mills. Rice investors stand to gain investment returns as high as 42 percent.
This is why investors are moving massively into local rice production and milling. Olam has invested $70 million in a fully mechanized rice farm and will soon commission it’s 210,000 MT integrated rice mills, the largest in Africa. The Dangote Group has committed to invest $1 billion for large-scale rice production and world-class rice milling, the largest single investment in Africa. High-quality Nigerian rice is now in the market, including Umza rice, Ebony super rice, Eko rice, Mikap rice and several others. At this pace, Nigeria will soon be a net exporter of rice.
Opportunities also abound in the horticulture sub-sector. Nigeria is the second largest producer of citrus in the world, the largest producer of pineapples, mangoes and tomatoes in Africa. But we import Payday Loans orange juice and concentrates from South Africa and tomato paste from Latin America and China. This is a significant opportunity for investors in the fresh produce sector. A number of private investors now invest in horticulture. Teragro, a domestic private firm owned by the Transcorp Group, has established a $ 6 million plant to process oranges into concentrate. Dansa Foods, another local private firm and subsidiary of the Dangote Group, is investing $35 million in the establishment of a tomato processing plant. The company is also investing $45 million to set up a 6,000-hectare pineapple plantation and processing plant.
Oil palm also presents an attractive opportunity as the Federal government is restoring Nigeria’s lost glory in palm oil production. This involves recapitalising our plantations by providing 9 million high yielding improved seedlings of oil palm to smallholder farmers and plantation estates in the country – free of charge. Private sector investments are expanding with new palm oil processing plants. Today, palm oil processing companies, Okomu Oil and Presco Plc are two of the best performing company stocks on the Nigeria Stock Exchange.
Cassava, a major staple, is another area where investors can sink their teeth into. Nigeria is turning its comparative advantage as the world’s largest producer of cassava into absolute competitive advantage. In fact, processing captures up to 57% of the value along the cassava production chain. The goal is to become the largest processor of cassava in the world, with the use of cassava for flour to partially substitute for imported wheat flour in bread and confectioneries, starch, sweeteners, chips and ethanol. Thirty bakeries, including the largest international supermarket chains, Shoprite and Park and Shop, now regularly sell cassava-wheat flour bread. Work is ongoing to establish large-scale high quality cassava processing plants to boost the production, reliability of supply and lower cost of high quality cassava flour.
Export crops are also being revamped. Nigeria used to have global dominance in agricultural commodity markets. Nigeria’s cocoa production grew from 250,000 MT in 2011 to 370,000 MT by 2013, and cocoa exports earned over $900 million. The cocoa revolution in Nigeria is receiving global attention, as Mars Incorporated, global company, has invested $20 million to procure cocoa from over 20,000 certified cocoa farmers. Nigeria will soon launch the Cocoa Corporation of Nigeria, a privately run commodity board, which will further spur growth and investment in the cocoa sector, including cocoa investment funds to boost local processing and value addition.
Finally, export opportunities for cashew and sesame will receive a further boost through new value chains focused on them, to promote increased production and processing. The export enhancement scheme should be changed to commodity value addition expansion grants, to ensure that companies add value to all agricultural commodities
To unlock this potential, President Jonathan launched an Agricultural Transformation Agenda when he assumed office in 2011. The focus of this was to reduce Nigeria’s expenditure on food imports (totaling over $11 billion) and instead, raise agricultural productivity and value-addition. Specifically, he made a conscious decision to refocus the sector on private sector engagement and end decades of government domination.
These reforms are working, as investments from the private sector have soared. The fertilizer sector and the gas industrialization policy have combined to open up the sector to new investors. Today, $5 billion of new investments in fertilizer manufacturing are ongoing by Dangote, Indorama and Notore amongst others. Nigeria expects to become a net exporter of fertilizers within three years. Nigeria will be on global exhibition.
Investment opportunities abound in the production of local staple crops like rice and cassava to reduce the country’s dependency on food imports. For example, the new rice self sufficiency policy will directly save Nigeria $2.5 billion annually and put this into the hands of our rice farmers and rural communities. The government has also embarked on free distribution of high yielding rice varieties, provision of fertilizers and mechanized services, supported by small scale irrigation, rice production has exploded in the country. As a result, within two years, our national paddy rice production rose by 4.3 million MT. The number of integrated modern rice mills in the country rose from 5 to 15 within two years, all processing the local paddy into high quality finished rice. Indeed, the government’s policy is attractive to investors who seek to both farm rice paddy as well as process these by operating integrated rice mills. Rice investors stand to gain investment returns as high as 42 percent.
This is why investors are moving massively into local rice production and milling. Olam has invested $70 million in a fully mechanized rice farm and will soon commission it’s 210,000 MT integrated rice mills, the largest in Africa. The Dangote Group has committed to invest $1 billion for large-scale rice production and world-class rice milling, the largest single investment in Africa. High-quality Nigerian rice is now in the market, including Umza rice, Ebony super rice, Eko rice, Mikap rice and several others. At this pace, Nigeria will soon be a net exporter of rice.
Opportunities also abound in the horticulture sub-sector. Nigeria is the second largest producer of citrus in the world, the largest producer of pineapples, mangoes and tomatoes in Africa. But we import Payday Loans orange juice and concentrates from South Africa and tomato paste from Latin America and China. This is a significant opportunity for investors in the fresh produce sector. A number of private investors now invest in horticulture. Teragro, a domestic private firm owned by the Transcorp Group, has established a $ 6 million plant to process oranges into concentrate. Dansa Foods, another local private firm and subsidiary of the Dangote Group, is investing $35 million in the establishment of a tomato processing plant. The company is also investing $45 million to set up a 6,000-hectare pineapple plantation and processing plant.
Oil palm also presents an attractive opportunity as the Federal government is restoring Nigeria’s lost glory in palm oil production. This involves recapitalising our plantations by providing 9 million high yielding improved seedlings of oil palm to smallholder farmers and plantation estates in the country – free of charge. Private sector investments are expanding with new palm oil processing plants. Today, palm oil processing companies, Okomu Oil and Presco Plc are two of the best performing company stocks on the Nigeria Stock Exchange.
Cassava, a major staple, is another area where investors can sink their teeth into. Nigeria is turning its comparative advantage as the world’s largest producer of cassava into absolute competitive advantage. In fact, processing captures up to 57% of the value along the cassava production chain. The goal is to become the largest processor of cassava in the world, with the use of cassava for flour to partially substitute for imported wheat flour in bread and confectioneries, starch, sweeteners, chips and ethanol. Thirty bakeries, including the largest international supermarket chains, Shoprite and Park and Shop, now regularly sell cassava-wheat flour bread. Work is ongoing to establish large-scale high quality cassava processing plants to boost the production, reliability of supply and lower cost of high quality cassava flour.
Export crops are also being revamped. Nigeria used to have global dominance in agricultural commodity markets. Nigeria’s cocoa production grew from 250,000 MT in 2011 to 370,000 MT by 2013, and cocoa exports earned over $900 million. The cocoa revolution in Nigeria is receiving global attention, as Mars Incorporated, global company, has invested $20 million to procure cocoa from over 20,000 certified cocoa farmers. Nigeria will soon launch the Cocoa Corporation of Nigeria, a privately run commodity board, which will further spur growth and investment in the cocoa sector, including cocoa investment funds to boost local processing and value addition.
Finally, export opportunities for cashew and sesame will receive a further boost through new value chains focused on them, to promote increased production and processing. The export enhancement scheme should be changed to commodity value addition expansion grants, to ensure that companies add value to all agricultural commodities
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