Nigeria’s agric sector attracts $196m investment in 2017
by Josephine Okojie and Bunmi Bariley
March 7, 2018 | 1:17 am| | | Start Conversation
Capital importation into Nigeria’s agricultural sector is gaining momentum as foreign investment into the sector rose by 771 percent from $22.5 million (N8 billion) in 2016 to $196 million (N70.6 billion) in 2017, according to data from the National Bureau of Statistics.
On a quarter on quarter basis, foreign investments into the sector increased by 45 percent from $43 million in q3 to $62.5 million in q4.
According to stakeholders in the sector, the rise in investment is owing to the renewed government commitment to the sector which has made it attractive to both local and foreign investors.
“Foreign investors that are coming in have seen the potential in the country’s population size. Investors are investing to improve the value chain and reduce the cost of production”, Emmanuel Ijewere, vice president of the Nigerian Agribusiness Group (NABG) said in a phone interview.
“The government focus on diversifying from oil to non-oil, starting with agriculture is really getting the attention of foreign investors,” Ijewere said.
Since the collapse of global oil prices at the international market which plunged the Nigerian economy into a 25 year low in 2016, there has been a renewed focus on the agricultural sector as the country attempts to diversify its economy away from oil.
Agriculture which was neglected became an option for diversification owing to its vast potentials that can drive a more sustainable economic growth in Africa’s most populous nation in terms of job creation and revenue diversification.
Nigeria has devoted a lot of energy at deepening agriculture with initiatives such as the Anchor Borrowers Programme (ABP), placing ban on importation of some agro commodities and setting goals for the attainment of self-sufficiency in major crop production.
“There is a lot of interest in going into the sector which is sparking foreign investments due to the government attention to the sector. There is likely going to be more investments this year due to the demand of agricultural products from other countries which will earn more foreign exchange for the sector because some African countries like Kenya are experiencing some form of drought”, Aboidun Olorundenro, operations manager, Aquashoots Nigeria said.
Also, local sourcing of agro commodities has increased tremendously and this has further spur investments in the sector as a lot of businesses are now into backward integration.
“A lot of investments are now coming into sorghum farming because the brewery industry is buying more from us now than before,” Adamu Bature, secretary, Sorghum, Millet Farmers Association of Nigeria, told BusinessDay in a telephone response to questions.
“Brewers make use of 70 percent sorghum as by-product for brewing beer and malt. Nigeria Breweries fayrouz brand is 100 percent sorghum. This shows the huge industrial potentials of the crop. Also, it serves as raw material for biscuit and noodles production,” Bature said.
The fishing industry which is one of the sub-sectors of the agricultural industry attracted $99 million investment within the period.
Josephine Okojie and Bunmi Bariley
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