twitter RSS Feed linkedin acp contact

Nigeria targets agro-processing as a future growth driver

As Nigeria looks to restructure its economy to be more diversified and sustainable,  agro-processing is emerging as a key tool to improve agricultural value added while also bolstering the sector’s status as a driver of economic growth

Agric1 croppedIt is estimated that up to 80% of profits in the agriculture sector are derived from processing and retailing raw goods. (Image source: Oxford Business Group)

As in many African countries, agriculture has long been an important part of Nigeria’s economy – not only in terms of food production, but also in terms of its economic impact and contribution to the overall workforce. 

Despite its sizeable footprint, some 90% of agricultural goods are exported raw, meaning that the country misses out on crucial value-added opportunities associated with agro-processing. It is estimated that up to 80% of profits in the agriculture sector are derived from processing and retailing raw goods. Emmanuel Ijewere, vice-president of the Nigeria Agribusiness Group and CEO of agro-processing firm best foods, estimated that for every dollar made exporting raw products in 2016, Nigeria could have earned 10-fold that value had the country processed all the commodities exported. 

Economic impact

The lack of processing capacity means that Nigeria essentially exports its agricultural goods abroad, where they are processed  and often exported back to Africa at a far higher price. For example, it is estimated that between 2016 and 2019, Nigeria’s cumulative agricultural imports, at US$7.9bn, were four times higher than its agricultural exports. 

As Oxford Business Group has previously noted, such situations are not uncommon in the region. For example, leading West African cottonproducing nations Benin, Burkina-Faso and Mali export 1.8 million tonnes of unprocessed cotton worth US$922mn, but import $2.4bn of finished cotton textiles and apparel. The result of such a model is that despite a large agriculture sector and vast arable land, Nigeria remains vulnerable to food insecurity and fluctuating food prices. These challenges were underscored by  the 2014 drop in oil prices that led to a recession in 2016. Amid falling revenue, the government sought to diversify the economy and reduce the import bill by focusing on agro-processing. Development of agro-processing In an effort to address the situation, in recent years Nigeria has sought to develop its agroprocessing capacity. 

In 2015, the Central Bank of Nigeria launched the Anchor Borrowers’ Programme, an initiative to create linkages between smallholder farmers and agro-processors through a series of financing options and inputs. The Bank of Industry (BoI), for its part, has supported the sector by providing loans aimed at developing the agriculture value chain. It is estimated that more than 6.9 million direct and indirect jobs were created through BoI initiatives between 2015 and October 2020.

 


LATEST NEWS IN Processing & Storage

Reviewing Kenya’s first agri-hub

Reviewing Kenya’s first agri-hub

President Uhuru Kenyatta on Thursday made an inspection visit to Eni Kenya, the country’s first agri-hub that produces vegetable oil and related bio-products

Nigeria targets agro-processing as a future growth driver

Nigeria targets agro-processing as a fut…

As Nigeria looks to restructure its economy to be more diversified and sustainable,  agro-processing is emerging as a key tool to improve agricultural value added while also bolstering the sector’s...

President Kenyatta urges KTDA to facilitate increased value addition to Kenyan Tea

President Kenyatta urges KTDA to facilit…

Kenya’s President Uhuru Kenyatta has challenged the Kenya Tea Development Agency Holdings (KTDA) to initiate an elaborate plan that will ensure value addition to 90% of the tea grown in...

Avocado oil refining: Westfalia launches three projects to boost sustainability

Avocado oil refining: Westfalia launches…

The Westfalia Fruit Group has unveiled three innovative environmental and social projects at its fruit processing plant in South Africa’s KwaZulu Natal province, enhancing sustainability and helping local communities in...

Farmers and agribusinesses in Uganda to receive more than US$5mn to become climate resilient

Farmers and agribusinesses in Uganda to …

The Government of the Republic of Korea, through its development agency Korea International Cooperation Agency (KOICA), and the International Trade Centre (ITC) will provide funding to support ITC in boosting...

Cashew project launched to spark economic growth in West Africa

Cashew project launched to spark economi…

High-level guests gathered at Abidjan, Côte d’Ivoire for the official launch of the Prosper Cashew project, a five-year initiative that will help West Africa capture much greater economic value from...

Prev Next

OTHER RELATED ARTICLES - Processing & Storage

South Africa ranked 40th on Global Food Security Index

South Africa ranked 40th on Global Food …

South Africa has been ranked 40th out of 105 countries in a Global Food Security Index, which placed the US in the top spot and the Democratic Republic of Congo at...

Tongaat-Hulett launches Mozambique sugar farm project

Tongaat-Hulett launches Mozambique sugar…

Tongaat-Hulett has launched a project to support small-scale sugar farmers in Mozambique

Bunge Loders Croklaan opens shea butter processing plant in Tema, Ghana

Bunge Loders Croklaan opens shea butter …

Bunge Loders Croklaan (BLC), Bunge Limited’s specialty oils and fats business, has opened shea butter processing facility in Tema, Ghana, with the launch of the Where Life Grows campaign, which...

Canadian firm Ag Growth announce Q2 and H1 results

Canadian firm Ag Growth announce Q2 and …

Ag Growth International Inc. has announced its financial results for the three and six-month periods ended June 30, 2017, and declared dividends for September, October and November 2017

Agricultural statistics programme receives UK aid

Agricultural statistics programme receiv…

A UK government department has contributed US$25 million to support a programme designed to enable farmers across the world to better plan their resources by allowing them access to improved statistics...

World's first integrated packing solution

World's first integrated packing solutio…

Ishida responds to demand for integrated and fully flexible tray packing line from a single source

South African citrus fruit farmers head towards positive year

South African citrus fruit farmers head …

South African citrus fruit farmers have a positive year ahead according to research by the United States Department of Agriculture (USDA)

AGI EMEA’s new facilities provide enhanced storage solutions

AGI EMEA’s new facilities provide enhanc…

AGI EMEA’s new facilities in Italy will serve customers across Europe, Middle East and Africa, with innovative equipment and enhanced storage solutions

TOMRA Food continues expansion in South Africa

TOMRA Food continues expansion in South …

Following TOMRA Food’s participation in Propak Africa 2019, one of the leading exhibitions for the packaging and processing exhibition, Norman Smith, area sales manager at TOMRA Food for South Africa,...

Kingspan Group provides innovative solution to post-harvest loss issue

Kingspan Group provides innovative solut…

Kingspan, an Ireland-based company, has come up with an answer to the issue of post-harvest food loss with its cold store systems

Fanisi Capital invests US$6mn in Tanzanian agribusiness

Fanisi Capital invests US$6mn in Tanzani…

Private equity firm Fanisi Capital has announced that it had bought a minority stake in a Tanzanian agro-processing company for US$6mn, expanding its footprint in the region

‘Nutritional benefits of edible insect products growing market demand’

‘Nutritional benefits of edible insect p…

The global edible insects market is projected to achieve more than 47 per cent CAGR from 2020 to 2026, supported by rising consumer awareness about nutritional benefits of edible insects...

Prev Next