Parallel challenges and opportunities for poultry investors and producers in Nigeria, Ethiopia and Ghana

georgia vivSpeakers from the poultry industries of Nigeria, Ethiopia and Ghana shared their challenges and opportunities in the afternoon Invest In Africa session on the first day of VIV Europe

The common challenges included the need for capacity-building, access to affordable, good quality feed, vaccinations and veterinary services, and promoting egg consumption among local markets. However, low consumption was also seen as an opportunity because it means there is room for growth in the markets of all three countries. Other opportunities included growing economies, especially Ethiopia, growing middle classes across the three countries and an increase in supermarkets, hotels and chain restaurants. There was discussion on whether there was a growing market for manufacturing and selling egg products, such as egg in powdered or liquid form, which is currently mostly imported from the US.

Investing along the entire value chain was cited by all three speakers as important for ensuring growth and minimising risk through diversified investment.

Idowu Asenuga, entrepreneur and public relations executive for Poultry Association of Nigeria (PANOG), emphasised the growing population of Nigeria, which currently stands at 200mn and is growing at 2.2 per cent per annum. He said that only 42 per cent of Nigeria's arable land is being farmed which affects the local feed industry.

"It is a huge challenge that needs to be fixed," said Mr Asenuga of the unused arable land.

Egg consumption in Nigeria is around 50 eggs per person and the country's egg production is currently worth US$800mn with 40mn commercial layers producing 10bn eggs per year. Mr Asenuga described the industry's growth pattern as "steady".

The majority of poultry farms in Nigeria are smallholder farms and the sector is "largely disorganised" and "informal", according to Mr Asenuga. The informal egg market is dominated by women with low levels of education and this makes marketing, promotional and branding activities difficult. However, the growth in supermarkets, such as Shop Rite, could change this with more than 40 branches in Nigeria and 100 branches expected by 2020.

Commercial customers, such as hotels, restaurants and bakeries, and industrial consumers, such as food and beverage manufacturers and pharmaceutical companies, were identified as further opportunities for investment in the Nigerian poultry value chain.

Mr Asenuga admitted that PANOG was not recognised by the Nigerian government and this made it hard for the poultry industry's voice to be heard at the highest levels. But he said that a 2003 ban on egg importation did protect the country from external market forces.

"We do not have much voice to facilitate policy," he told delegates. He added that lack of traceability - "a wild, wild west" market - and poor marketing information added to the industry's challenges, as well as secuity issues in regard to Boko Haram in the country's north-east. However, he was upbeat about opportunities fuelled by Nigeria's economic growth, focus on agriculture after the downturn in oil, access to other West African markets - "that's 400mn people in 15 countries".

Technology could be important for Nigeria's poultry industry development, according to Mr Asenuga: "The growth in mobile and internet usage has created the right platform for precision poultry production and digital marketing."

Dr Demeke Wondemagegn, board secretary of the Ethiopian Poultry Producers and Processors Association (EPPPA), said Ethiopia had the world's highest growth rate for GDP in 2017 at 8.5 per cent and there are more than 100mn consumers. He described chicken meat consumption as "very low" at just 0.5kg per capita and egg consumption is just 12.4 eggs per person per annum. Other challenges included shortages of good quality day-old chicks, vaccine supplies, veterinary services, knowledge, investment and technical usage; as well as a "lack of diversity of poultry products and packaging", seasonal fluctuations in demand, such as a drop during the Orthodox church fasts, and limited cooking skills in regard to chicken meat and eggs across the general populace.

To encourage the poultry industry to overcome these challenges, Ethiopia has set ambitious targets of a 235 per cent increase in chicken production by 2020 and an 828 per cent increase in egg production in the same timeframe.

Dr Wondemagegn identified multiple opportunities, such as a nationwide strategy to encourage consumers to shift from red meat to chicken as a healthier alternative, and the need for investment by companies involved in feed processing, vaccine and breeding companies, as well as slaughtering and processing providers and manufacturers of poultry house equipment and feed machinery.

Victor Oppong Adjei, CEO of VOA Farms and the chairman of the Ghana National Association of Poultry Farmers, emphasised Ghana's "stable and predictable economy", 26 years of democracy, good governance, rule of law, access to free zones, developing financial infrastructure, excellent fertile, arable land and tax incentives for investing in poultry.

Like Nigeria and Ethiopia, egg consumption in Ghana is low at an average of 20 eggs per capita per year because of "perceived cholesterol even though research has debunked that myth", Mr Adjei told the conference. He added that broiler production is "the mainstream of the poultry industry [for Ghana and] a high source of income for many."

He cited low capital injection, the high cost of feed, inadequate financing with a focus on high-interest rates and short-term loans, and the dumping of cheap chicken on the Ghanaian market from the European Union, the US and Brazil as challenges. Cheap chicken dumping accounts for around US$360mn worth of poultry annually with local chicken only making up 5 per cent of the market.

However, Mr Adjei said that "growing demand and growing markets [and a] growing hospitality industry with restaurants and hotels" represented good opportunities in Ghana. He added that there are investor opportunities in maize and soya farming for feed, additional feed mills, hatcheries, processing facilities and veterinary drugs. In particular, he told delegates that "setting up a pharmaceutical company in Ghana to produce veterinary drugs" would be an excellent opportunity.

Incentives such as a five-year tax holiday for agribusinesses, exemptions from customs duty and double taxation, and the setting up of free zones were all mentioned by Mr Adjei as positive reasons to invest in Ghanaian poultry.

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