Unlocking the immense potential of Nigeria in the agriculture and agri-food sectors
Nigeria is a country with immense potential for agricultural development. With a population of over 200 million people, a large domestic market, abundant natural resources, and a favorable climate, Nigeria offers a unique opportunity for investors who want to tap into the growing demand for food and Agro-based products.
Nigeria's agricultural sector contributes about 25% of the country's GDP and employs about 70% of the labor force. However, the sector is still largely underdeveloped and faces many challenges such as low productivity, poor infrastructure, limited access to finance, and insecurity. These challenges also present opportunities for foreign investors who can bring in capital, technology, expertise, and innovation to transform the sector and create value for themselves and the host country.
Nigeria has taken steps to improve the investment climate and attract more FDI into the agricultural sector. Some of these steps include:
- The establishment of the Nigerian Investment Promotion Commission (NIPC) as a one-stop shop for investors who want to register and operate businesses in Nigeria.
- The enactment of the Nigerian Investment Promotion Act of 1995, which guarantees the protection of foreign investors' rights and interests, such as repatriation of profits and dividends, access to foreign exchange, and arbitration of disputes.
- The implementation of various policies and programs to support the development of key agricultural value chains, such as the Agricultural Transformation Agenda (ATA), the National Livestock Transformation Plan (NLTP), and the Green Alternative Policy (GAP).
- The provision of incentives and concessions for investors in the agricultural sector, such as tax holidays, duty waivers, land allocation, and access to credit facilities.
- The gradual adaptation of the exchange rate Naira-USD to the real market conditions
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Nigeria has also signed bilateral and multilateral agreements with several countries and organizations to facilitate trade and investment in the agricultural sector. Some of these agreements include:
- The African Continental Free Trade Area (AfCFTA), which creates a single market for goods and services among 54 African countries.
- The Economic Community of West African States (ECOWAS), which promotes regional integration and cooperation among 15 West African countries.
- The European Union (EU), which offers preferential access to Nigerian exports under the Economic Partnership Agreement (EPA).
- The United States (US), which grants duty-free treatment to Nigerian exports under the African Growth and Opportunity Act (AGOA).
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According to the National Bureau of Statistics (NBS), FDI inflows into the agricultural sector increased by 27% from $46.6 million in 2020 to $59.17 million in the first half of 2022. This shows that there is still a strong interest and confidence in Nigeria's agricultural potential.
Some of the factors that can encourage foreign agricultural companies to invest in Nigeria are:
- The availability of land and water resources for crop and livestock production.
- The large domestic market and access to regional markets in West Africa.
- The government policies that support agricultural investment, such as tax incentives, import duty waivers, and land lease arrangements.
- The opportunities for value addition and processing of agricultural products, such as oil palm, cocoa, cassava, rice, and poultry.
- The demand for agricultural inputs and services, such as seeds, fertilizers, machinery, irrigation, extension, and research.
- Well-trained and qualified Engineers, PhD and Researchers in the agriculture sector.
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There are some examples of successful foreign agricultural investments in Nigeria that have contributed to the development of the sector and the economy. Some of them are:
- Olam International, a Singapore-based agribusiness company that has invested in various agricultural value chains in Nigeria, such as rice, wheat, cocoa, sesame, cotton, and poultry. Olam has established processing facilities, farms, and outgrower schemes that provide employment, income, and market access for thousands of farmers and workers.
- Syngenta Foundation, a Swiss-based non-profit organization that has supported the development of the agricultural sector in Nigeria through various initiatives, such as the Seeds2B project that facilitates the access of smallholder farmers to quality seeds of improved varieties; the Agripreneur project that trains and mentors young entrepreneurs in agribusiness; and the ReelFarming project that uses digital technology to provide agronomic advice and market linkages to farmers.
- Flour Mills of Nigeria, a Nigerian company that has partnered with foreign investors such as Corteva Agriscience and Taiyo Kikai to enhance its operations in the agricultural sector. Flour Mills has invested in crop production, milling, animal feed, pasta, noodles, and edible oil.
Leveraging on our own experiences on investment in the agriculture sector in Nigeria, Deko Group can help your company invest efficiently in the agriculture and agri-food sectors in Nigeria and avoid unnecessary obstacles. We can assist your company from the preparation stage until the completion of your investment?project.
1.??????We can organize a business trip for your executives to visit the potential sites and meet government officials.
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2.??????We can prepare a feasibility study based on your investment interests.
3.??????We can help you purchase existing plantations or lease agricultural lands.
4.??????We can monitor or manage your agricultural investment project on your behalf.
5.??????We can assist your company in the digitalization of your agricultural value chain.
6.??????We can supply agricultural commodities based on your specific requirements.
7.??????Through our business network, we can provide one-stop services on legal, audit and security.
8.??????We can partner with your corporation on the implementation of your investment project in Nigeria and in West Africa.
Please contact us now to see how we can work together on this win-win opportunity.
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