WEFA: Nigeria in search of agro investors in staple crops

In agriculture, Nigeria has all the necessary natural conditions for robust agricultural development. Statistics from the National Bureau of statistics (NBS) show that the country has 84 million hectares of arable land – 60% underutilized, with potential irrigable area of 3.14 million hectares and 279 billion cubic meters of surface water.With current population of 177 […]

In agriculture, Nigeria has all the necessary natural conditions for robust agricultural development. Statistics from the National Bureau of statistics (NBS) show that the country has 84 million hectares of arable land – 60% underutilized, with potential irrigable area of 3.14 million hectares and 279 billion cubic meters of surface water.
With current population of 177 million of which 60% are farmers, Nigeria has a wide range of agro-ecological zones and a humid tropical climate conducive for different varieties of crops. And according to the World Bank, it is now the biggest economy in Africa.
The attention of investors was turned to the six major crops processing locations designated as Staple Crops Processing Zones (SCPZs) across the six geo-political zones of the country with specific focus on crops which Nigeria has potential comparative advantage in the world.
 In Kano, the Gafan SCPZ, located in the Bunkure Local Government Area (LGA), will help investors capitalize on Kano’s favorable conditions for agribusiness, large market, and will provide very promising investment opportunities in tomatoes processing. Several small-to-medium-sized tomato concentrate and paste processing plants may process 144,000 MT of tomato a year.  Additional production can be organized to accommodate large processing facilities.
Adamu Saleh, a Kano-based tomato farmer, told Daily Trust that the zone will ease a lot of problems which have to do with post harvest lose and wastages in tomoto production.
In terms of Rice, Dawanau market in Kano is the largest grains market in West Africa, but 60-65% of rice consumed in Kano is imported. For Sorghum, Nigeria is the largest producer of food sorghum in the world, which can attract high quality sorghum flour plant in the area.
There are numerous opportunities for investors to take ownership of the Gafan SCPZ by working with the government through public-private partnerships to provide power, water, and site management infrastructure to the SCPZ.
Kano has some of the largest infrastructure networks in Nigeria, with well-serviced roads connecting to Abuja and neighbouring states, a rail link from Lagos to the North, an international airport and the largest irrigation network in the country. Kano is the third largest commercial center in Nigeria, acting as a major hub for trade, and the third largest non-oil economy. A $500m World Bank Nigeria Irrigation Project will benefit the Kadawa irrigation system.
In Niger, agriculture is the main economic activity of the state. It has a total land area of 86,000 sq km, representing 9% of the country’s total land area, and 80% of which is arable. Niger’s rice growing capabilities could allow the state to feed the entire nation on its own, and the state has a long history of rice processing. With 8 rivers and expanses of wetland, the state is highly suitable for rice farming, while only 25% of the irrigable land has been developed.
In terms of labour, 85% of the 4 million inhabitants of the state work in agriculture, including farming, fishing, and livestock rearing. The state’s geographic proximity to Abuja allows it to reap economic benefits and be close to large centers of demand and export opportunities.
According to Nasiru Abdullahi, a rice farmer in Badaggi, over 20 rice mills have been identified in Badeggi, with many more in other areas of Niger. The only large-scale mill is the ONYX Rice Mill (34T/day), though Dangote is considering a large scale rice mill in the SCPZ as an anchor investor. Substitution for imports presents a large opportunity; particularly as the government seeks to reduce import dependency. Small, local mills do not currently have the capacity to meet the volume or quality demands of Nigerian consumers.
For cassava, Nigeria is the largest producer of cassava in the world with over 43 million metric tonnes. But only 10% of the cassava produced in Nigeria is used in industrial processing. Many investors could seize the opportunity in cassava processing for industrial use and reap billions.
Cassava farmers said with rising demand and strong government support for cassava products, Kogi is one of the highest-producing states for cassava, making it an attractive location, according to the ministry  “to invest in a $2.8m commercial cassava farm, $29m starch processing facility, or $32m sweetener processing  facility” in Alape processing zone. Cargill has plans to build a $100m cassava starch and sweetener factory in the Alape SCPZ.
The Adani SCPZ in Enugu and Omor SCPZ in Anambra states, which grow rice, cassava in commercial quantities, will help investors capitalize on Enugu and Anambra’s favourable conditions for agribusiness, and will provide very promising investment opportunities. Rice investors can capitalize on Nigeria’s domestic rice production gap by investing in a commercial rice farm, mill, or integrated farm and mills.
For Cassava, rising demand and strong government support to develop the local market creates attractive opportunities for a commercial cassava farm and starch and sweetener processing facilities.
The Ikorodu-Epe Corridor SCPZ in Lagos state will look at aquaculture. Only 20% of Lagos’s demand for fish is currently met by domestic production, creating investment opportunities in fish feed production, fish cage cultures and fish processing.
Lagos is Nigeria’s commercial and industrial hub and a key driver for Nigeria’s entire economy, housing over 90% of Nigeria’s financial companies. The state is a source for abundant demand and labour – it is projected to have 40 million inhabitants by 2020 and already has 350,000 households engaged in farming.
With more processing zones being planned in Nigeria, a new wave of investment could be experienced in the sector, which will reduce the staggering unemployment figure in the country. That will happen if only the major challenges identified by investors as shown in the chart are addressed holistically.