Agriculture, which is one of the key sectors government has given priority to drive Nigeria’s non-oil sector towards food productivity and security, holds enormous potential for investors this year.
Since independence in 1960, agriculture had been the mainstay of Nigeria’s economy, providing the largest chunk of foreign exchange inflow into the country. Moreover, it contributed about 63 per cent to the country’s Gross Domestic Product (GDP), according to official statistics from the National Bureau of Statistic (NBS).
The incomes then were derived from the export of major cash crops such as rubber, cocoa, palm oil, cashew nuts, groundnut and cotton, among others.
Notwithstanding the low prices that agricultural products suffered at that time, the sector remained resolute as it continually sustained the country’s economy. Indeed, the sector was the largest employer of labour in the country then.
However, on assuming office as the Head of State in 2015, President Muhammadu Buhari pledged to introduce diversification programme where agriculture, solid minerals and manufacturing sectors were identified to stabilise the ailing economy amid the fall in crude oil price at the international market.
Particularly, government set up the Economic Recovery and Growth Plan (ERGP) to halt the decline of the economy.
After various agric sector policies by government, Nigerian agriculture became the toast of eminent industrialists, commercial farmers, foreign and local investors and agro-allied industries as they ventured into different aspects of farming.
In 2018, agriclture is expected to still continue to play a key role by effectively contributing to government’s effort at restructuring the economy away from dependence on oil. However, the areas of agriculture expected to witness investments include rice mills, fishery, cocoa, cashew, yam export, sesame seeds export and flour mills plants. Others are farm inputs acquisition, fertilizer production plants, palm oil export, poultry, sugar plant set up and tomato production establishment.
These areas have been identified as juicy because of their high return of investment for investors vying to trade in them.
Rice milling plants
There has been paradigm change in the country’s agriculture with the intensity in the production of local rice for Nigerians.
Already, the government has set ambitious targets of becoming self-sufficient in rice production this year and turning a net exporter by 2020.
No doubt, the Anchor Borrowers Programme of the Central Bank of Nigeria (CBN) has opened up potential opportunities in the country’s sector.
With this programme, there has been massive production of local rice in large scale to stop importation of foreign rice both at land borders and ports.
However, the self-sufficiency programme in rice production has seen the springing up of rice mills plants in the country in line with the government’s diversification agenda to make agriculture the hub for investors.
Already, Africa’s richest man, Aliko Dangote announced early last year that he was making a $1 billion investment in Nigeria’s rice production.
Other big players have also jumped in, including the Lagos-based conglomerate TGI, which opened a rice mill last August with a capacity of 120,000 tonnes; Olam Nigeria, part of Singapore-based Olam International, which plans to boost its existing rice output; Amarawa rice mill’s 288 metric tonnes rice per day capacity in Kano State; the multi-billion Naira Wacot Rice Mill in Argungu, Kebbi State and many others. So more investments in rice mills are expected from investors this year.
Floating of tomato plants
This is another juicy area that agric sector stakeholders have predicted would witness boom this year. This move may be attributed to the Federal Government’s plan to ban the importation of foreign tomato paste into the country and enhance the production of local tomato paste in circulation.
In order to justify its commitment, the Federal Government announced new policy on importation of tomato that would further stimulated the establishment of new and emerging processing plants as well as the resuscitation of some hitherto comatose tomato concentrating plants in the country.
The quest for this move is to reduce the country’s N6 billion currently spent annually in foreign exchange on tomato imports and also the average 150 metric tons annual imports on tomato paste.
Already, the private public partnership (PPP) committee set up by the Federal Government on the new tomato policy is yielding positive results, especially on the implementation of curbing imports of concentrated tomato into the country.
Besides, the revamping of the abandoned local tomato processing plants and the new ones that are springing up has been identified as catalyst towards achieving sustainable self-sufficiency in tomato production locally.
Stakeholders and government have admitted that influx of tomato paste into the country due to lack of regulatory policy in the sector brought about circulation of sub-standard tomato paste across the country.
Big players in tomato industry such as Dangote Tomato Processing Company Kano and Erico Foods Limited as well as Savannah tomato industries should expect more competition from new investors this year.
Floating of fertilizer plant
Recently, the Federal Government commenced the revival of some ailing blending fertilizer plants in a bid to rejuvenate the country’s agricultural outputs by making fertilizer accessible and affordable to farmers in the country.
Particularly, the government, through the Nigeria Sovereign Investment Authority (NSIA) refurbished 12 out of the 28 existing fertilizer blending plants scattered across the country while additional six blending plants have been scheduled for refurbishment this year.
This move indicates that Nigeria now has the capacity to blend and produce fertilizer locally.
The intervention programme in the country’s fertilizer sector by the government has seen the prices of fertilizer being slashed further in order to make the product available and affordable for small holder farmers.
However, stakeholders believed that ongoing federal government’s effort in the fertilizer industry would see further influx of investors in the sector this year.
Indeed, fertilizer is one of the major agricultural inputs, which farmers depend on for increasing their yields to boost food productivity and security.
At the formal flagged-off of Nigeria’s packaged 72 ton of yam export to United Kingdom at Lilypond Container Terminal, Ijora, Lagos, last year, the Federal Government revealed that Nigeria intends to realise at least $10 billion annually in the next four years from yam exports to Europe and United Kingdom.
The move to commence yam export was in line with the implementation of the Agricultural Promotion Policy (APP)-The Green Alternative lunched last year by the Presidency.
Already, the Federal Government intend to take yam production, processing and marketing in Nigeria to the next level this year.
With this, it has opened doors for potential local exporters of agricultural produce willing to join in the export of yam outside the country.
Statistically, Nigeria is by far the world’s largest producer of yam, accounting for 61.7 per cent, according to the Food and Agriculture Organisation’s statistics of the world’s production annually and with over 60 yam varieties produced across the states of the federation.
However, there is high expectation of influx of investors into yam export business this year.
In fulfillment of Nigerian Sugar Master Plan (NSMP) implementation, the Federal Government revealed that Nigeria’s local sugar production is expected to hit 1.7 million tons by 2023, from its current 30,000 tonnes.
No doubt, the sugar industry is a very lucrative business in Nigeria. But the importation of foreign sugar into the country has set Nigeria’s economy back.
However, with the renewed efforts by government to give priority to local firms in production of sugar to boost local production, there is the tendency that investors would flood the country’s sugar industry this year.
No doubt, the agric sector has been proritised by the Federal Government under President Muhammadu Buhari, but stakeholders are lamenting the inconsistent policy somersaults that have continued to regard their investments.