In this report, Onome Amuge spoke with experts who highlight the significant investment potential and under-utilisation of Nigeria’s agro-industrial sector, advocating for a comprehensive approach to maximise its economic impact, including addressing infrastructure and financing issues…
Agriculture has evolved from a sector solely focused on food production into an industry that not only nourishes but also encompasses the broader economy. From providing essential raw materials for various sectors, including textiles, confectionery, pharmaceuticals, and industry, to serving as a pathway for employment generation, trade, commerce, and economic development, agriculture’s influence is felt across virtually all aspects of human life.
CropLife, an international agricultural trade association, in a report, disclosed that over one billion individuals worldwide are actively engaged in the agriculture sector, contributing $2.4 trillion to the global economy.
However, while the agro-industrial sector in Nigeria, a viable component of the modern agricultural system is seen to offer immense investment potential, these opportunities have been largely under-utilised, a trend that many analysts find perplexing, particularly in light of Nigeria’s status as Africa’s most populous nation with a population exceeding 200 million.
Experts in agronomy and economics maintain that Nigeria’s agro-industrial landscape presents a wealth of opportunities across various value chains, which can significantly widen both the domestic and export markets, boost employment, elevate farmers’ incomes, and ultimately increase the nation’s revenue.
They also contend that the African Continental Free Trade Area (AfCFTA), which facilitates greater regional trade, coupled with increased urbanisation and changing food preferences, present an unparalleled opportunity for agro-industries to thrive by capitalising on the expanding market access and shifting consumer trends in Africa.
Some of the major investment ventures being identified include:
*Production of fruits and vegetables, roots and tubers, cereals and grains, oil seeds and nuts, livestock, eggs and other products with the view for value addition such as conversion of eggs into egg powder for industrial utilisation.
*Post-harvest storage, processing and packaging of food crops which will continue to be in constant demand due to rising population, changing lifestyles and consumption patterns.
*Extraction of starch and flour from staple crops like cassava, rice and maize using industrial applications to produce glucose, fructose, sorbitol and other valuable products.
*Production of fuels from agricultural commodities such as jatropha, cassava, cassava peels, and empty fruit bunches.
*Investment in the entire value chains of bio-agricultural organic inputs such as organic fertilisers, pesticides and herbicides, livestock wastes, neem oil and extract production.
*Optimisation of small to medium-scale food processing plants to ensure value-addition through technology integration.
*Investment in animal feed and inputs.
*By-product utilisation whereby products such as cassava peels, maize cobs, rice husks, groundnut shells, maize husks, poultry waste, etc are recycled/converted into valuable products.
*Agro-industrial project development, consulting, training, and business support.
Championing the development of agro-industries in Nigeria, Oyewole Okewole, founder of Oakwell Agro-Industrial Consult and Services, said agro-industries transcend and play a functional role across four basic types of industries including; Primary (sourcing of raw materials through farming); Secondary (manufacturing sector); Tertiary (service provision) and Quaternary (Research & Development).
Oyewole Okewole observed that agro-industries are capable of optimising resources for various uses, including consumer retail food and snacks, animal feed, biofuel and energy, organic compost, aesthetics and furniture, horticulture, soil stabilisation, pulp and paper, amongst other uses.
Furthermore, he emphasised that agro-industries not only generate demand from their direct input suppliers and product buyers, but their robust forward and backward linkages also stimulate businesses beyond their immediate spheres, cascading into a wide array of ancillary services and supporting activities within the secondary and tertiary sectors of the economy, which are positively impacted by the growth and expansion of the agro-industries.
Nigerian agro-industries falling below potentials
Although it is widely accepted that agro-industries play a significant role in creating job opportunities, generating income, and enhancing the quality and demand of agricultural products, there is mounting evidence to suggest that Nigeria’s agro-industrial sector is failing to tap into its full potential as a driver of economic growth.
While leading players in the Nigerian agro-industrial space, such as Flour Mills of Nigeria (FMN), Dangote Group, BUA Group, and others, have made commendable strides in the sector, it appears that the country’s agro-industry as a whole has yet to harness its full potential as a catalyst for economic development, as performance reports indicate that it has not yet lived up to expectations.
According to the United Nations Food and Agriculture Organization (FAO), a multitude of factors have been hampering the development of agro-industries in Nigeria, Africa’s most populous nation. These factors include infrastructure limitations such as poor road networks, unreliable electricity supplies, limited packaging inputs, scarcity of technical expertise, inadequate policies, and a dearth of institutional support, all of which present significant challenges to the industry’s advancement.
These challenges have to a large extent reduced the profitability, competitiveness and ability of agro-industries to fully exploit the market opportunities arising from rapid population growth, urbanisation and changing lifestyles and consumer preferences, the international agriculture agency noted.
Highlighting the plight of agro-industrial enterprises in Nigeria, Okewole expressed dismay at the lack of focus on key aspects of the agro-industry, such as value addition, storage, utilisation of by-products, and the provision of industrial raw materials.
He also drew attention to the underdeveloped state of Nigeria’s infrastructure, which puts local agro-industrial enterprises at a disadvantage compared to their counterparts in industrialised countries.
“Agro industries in Nigeria are largely underutilised and many of them have only been able to access only one out of the expansive opportunities in the agriculture sub-sector,(food production) and even that part is yet to achieve significant results,” he said.
The CEO of Oakwell Agro-Industrial Consult and Services underscored the issue of credit accessibility and financing for agro-industrial enterprises.
To maximize the impact of agro-industries on Nigeria’s economic growth and development, Okewole advocates that the sector should leverage the full range of investment opportunities, rather than limiting itself to food provision alone.
Okewole recommended that stakeholders adopt a waste management system that aligns with the circular economy model, whereby waste generated during primary production can be converted into valuable inputs that can be utilised throughout the entire value chain.
Okewole also called for greater emphasis on public-private partnerships (PPPs), encouraging the private sector to collaborate with government agencies to address the existing gaps in the agro-industrial sector.
The need for SMEs to acquire technical expertise in value-added processing and preservation techniques was also highlighted, in addition to improving the efficiency of logistics systems and the establishment of efficient cold chain networks, as crucial steps to enable agro-industries to operate at their full potential and drive economic growth.
On a more optimistic note, he highlighted the establishment of the Special Agro-Industrial Processing Zones (SAPZs), a joint initiative of the Nigerian federal and state governments with the backing of the African Development Bank (AfDB) and other development partners, as a significant step towards enhancing the productivity of agro-industrial operations in the country.
The ability of food scientists and processors to convert crops and tubers into value-added products is often frustrated by the absence of appropriate processing facilities, as observed by Olusegun Olaoye, a food scientist and researcher at the Michael Okpara University of Agriculture in Umudike, Abia State.
Even when such facilities are available, Olaoye noted, insufficient or intermittent power supply frequently undermines the ability of these facilities to operate at optimal levels, impeding the realisation of the full potential of agro-industrial processes.
Olaoye added that there is a communication gap and little collaboration between researchers across the country’s agriculture research institutes and stakeholders in the agro-industry sector.
“This may in part be due to the problems endemic in research institutions in the country, which may have eroded the confidence reposed in them,” he stated.
Olaoye averred that more research is required to find solutions to emanating problems in the agro-industry. He underlined the need for collaboration between agro-industries and research institutions including; universities, polytechnics, and research Institutes, to enable better performance and ensure the sector’s economic potential is fully exploited.
He added that the production of value-added products from agricultural raw materials should be supported by the government through the establishment of industries and creating a favourable business environment, access to credit and financial support to existing and emerging agro-industries.
