How India and Nigeria are Collaborating to Boost Agricultural Opportunities
India and Nigeria have maintained a fruitful diplomatic relationship that dates back to when the seeds of Nigerian independence were sown over six decades ago. With a shared anti-colonial history, the two agricultural powerhouses have long recognised the importance of aligning.
Long-term relationship?
India is one of Nigeria’s top five trading partners, with only China and the Netherlands exceeding their commerce figures. The bilateral trade volume between the two nations was $11.8 billion in the 2022-23 season, down from $14.95 billion in the previous year. This decrease is primarily associated with the reduced amount of oil purchased from Nigeria. In practice, overall exports are continuing to rise.
More than 135 businesses in India are owned/operated by people of Indian origin. Moreover, Indian enterprises have invested approximately $19.3 billion in Nigeria.
Amid these close ties, the High Commission of India, Abuja has been keeping a close eye on Nigeria’s agriculture. It said the following about the importance of the industry:
Nigerian government has launched the Economic Recovery & Growth Plan for diversifying the economy. Though dominated by subsistence farming, the contribution of the agricultural sector to GDP clocks to about 23%. This is due to the availability of large tracts of arable land which makes this an important sector with high potential for employment generation, food security and poverty reduction.
Maximising output
Other than oil products, Nigeria’s exports to India include coconuts, Brazilian nuts, cashew nuts, and spices. Meanwhile, Nigeria heavily imports pharmaceuticals and vehicles from India.
Even though Nigeria has a stronghold on production, there are several opportunities missed across the supply chain that limit the country’s ability to optimise trade. For instance, Nigeria produces between 350,000 and 360,000 MT of cashews each year. However, much of the commodity is then exported to other countries to de-shell.?
A primary cause of Nigeria having to export before processing is the low level of mechanisation in its agriculture. Still, there is now a focus on keeping the de-shelling procedure in-house amid agro-processing incentives.
Across the spectrum, there is a lack of access to microfinancing in Africa. Smallholder farmers are finding it hard to meet demand amid modest funding.
A series of motives
India sees great potential in scaling up Nigeria’s agricultural infrastructure. Subsequently, it has been increasing investments in the country to advance the technology needed in the field.
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The government of India has been working hard to promote agri-business in Africa through four main components:
There are additional initiatives throughout all levels of society. For example, there are civil partnerships with NGOs such as the Self-Employed Women’s Association (SEWA) in Gujarat. They have been looking at the sharing of knowledge and best practices between women farmers in rural India and Africa.
A study titled “India-Africa Partnership for Food Security: Beyond Strategic Concerns” shares:
Through their work, SEWA has developed close associations with unions in South Africa, Ghana, Nigeria and Senegal, and has worked towards developing an integrated ‘bottom-up’ approach, one that helps women and their families become self-reliant and adapt to changing technologies.
A major breakthrough in India-Nigeria relations came in September this year. According to Bloomberg, India signed a multi-billion-dollar investment deal to develop infrastructure, including power, rails, ports, warehousing, and agriculture.
Lazarus Angbazo , the chief executive officer of Infrastructure Corporation of Nigeria Limited (InfraCorp), a state-backed outfit, said that the move will play an integral role in his country's mission to industrialise its agriculture.
He said that the country is looking at increasing the productivity of its agricultural sector, adding that “agriculture represents about 40% of Nigeria’s economy.” In conclusion, he said that if Nigeria wants to have an impact, this is the department that has to be prioritised.
Targets to be met
Overall, Nigeria seeks to close an infrastructure deficit, which has a gap of approximately $125 billion each year. It targets at least $3 trillion over three decades. Thus, collaborations with key international trade partners will prove to be valuable in the coming years.
Altogether, even though petroleum products account for the majority of Nigerian trade to India, total exports value over $9 billion. As such, it's no surprise that India is keen to invest in Nigeria’s infrastructure to help it meet consumer requirements in this next chapter.
Sources: High Commission of India, Abuja ; ORF Online ; Bloomberg