New Prospects for Foreign Investment in Nigerian Agriculture
Since entering office in 2015, Nigerian President Muhammadu Buhari has prioritized the transformation of his country’s agriculture industry. Nigeria’s agricultural overhaul has its roots in a desire to decrease unemployment rates, combat the country’s dependence on oil, and increase levels of food security.
Three years into Buhari’s term, agriculture now makes up for 27% of Nigeria’s GDP. Agricultural exports have increased by 200%, and rice importation has been cut by 90%. Nigeria is number one in cassava, yam, and hibiscus flower production, which it exports to countries like Mexico and Russia, and number two in sesame seed production after Ethiopia.
In spite of this progress, many issues remain.
The Executive Director of Zynosism Nigeria Ltd., announced earlier this year that Nigeria’s agricultural sector annually loses N20 billion (over 50 million USD) as a result of insurance companies’ failure to cover small farmers. This is compounded by the fact that small farmers have great difficulty securing loans, since bankers would often rather lend to large companies than thousands of individual farmers. This remains a source of improvement, according to Audu Ogbeh, Nigeria’s Minister of Agriculture.
Another cause for concern in the rural sector has been the incredible growth rate of Nigeria’s population, which sees more children born per day than in the entire European Union. Ogbeh believes education, especially for women, will “reduce and rationalise child production.”
Many believe that strengthening Nigeria’s agriculture sector is the key to solving a large portion of the country’s economic woes. Adeolu Ayanwale, professor of agricultural production economics at Obafemi Awolowo University, insists that improved agriculture will lead to a reduction in mass poverty in the country.
According to Professor Ayanwale: “Investments in the agriculture sector also contribute to overall economic growth by increasing efficiency in the marketing chain, reducing the share of poor people’s income spent on food and enabling them to purchase other goods and services.”
This echoes findings in recent research carried out by the International Food Policy Research Institute and the International Institute for Sustainable Development. The research concludes that Nigeria can “eradicate poverty with agriculture,” since it meets the criteria needed for food security, employment generation, and wealth multiplication through agriculture.
A number of voices have suggested what they think will best serve Nigerian agriculture in the long run, including increased investment in agri-tech companies, biotech crops and soil-less farming systems.
In addition, a number of countries and international organizations have expressed intent to contribute to the advancement of Nigerian agriculture.
It was revealed on Monday that the United States African Development Foundation has injected $24 million into the Nigerian agriculture sector since 2002.
Elion Resources Group, a leading Chinese green industry company, recently signed a Memorandum of Understanding solidifying its intent to explore investment opportunities in Nigerian agriculture and development of new energy resources. This announcement elicited widespread feelings of optimism among Nigeria’s leaders, as the partnership has the potential to help boost the country’s economy, education, and poverty alleviation. Elion also expressed intent to aid afforestation efforts in Nigeria, which loses about 19.3 square-kilometers annually due to desert encroachment.
Late last week, the Brazilian Ambassador to Nigeria announced plans for Brazil to inject 1.1 billion dollars into the continued development of Nigeria’s agriculture industry. The money is specifically for the purpose of establishing a tractor assembly plant in Bauchi State. According to the ambassador, the project will “reduce hard labour and labour shortages and improve the timeliness of agriculture operations.” The agreement, for which the proposed term of financing is 13 years, will be concluded by the end of October.