Nigeria possesses about 80 million hectares of arable land, which accounts for 23% of arable land across West Africa. However, these lands are highly unexploited.
In the 1960's, Nigeria was one of the promising agricultural producer in the world, before the country turned to oil. Nigeria was number one globally in palm oil export well ahead of Malaysia and Indonesia. Also, accounted for 47% of all groundnut exported, placing the country ahead of USA and Argentina.
However, over the years, its agricultural status has declined. Despite the fact that Nigeria accounts for 65% of tomato produced in West Africa, it is currently the largest importer of tomato paste.
Based on this downfall, the federal government is taking serious steps to strengthen the agricultural sector. The president of Nigeria, Goodluck Jonathan, stated that the transformation of agricultural sector is the focus of the entire transformation agenda of his administration. Adding that agriculture is no longer seen as a developmental program, but now considered as a business. He also revealed that cassava bread made with 20% cassava and wheat flour now sells in Nigeria. As a result saved the nation $1.5 billion in import bills on wheat. According to the minister of agriculture, Nigeria is the largest producer of cassava in the world, but wants it to be the largest processor of cassava as well.
Nigeria targets an investment of $10 billion in farming, adding 20 million MT to domestic food supply by 2015, with the aim of reducing its reliance on food imports. It also aims to create 3.5 million jobs in the process. The government has successfully eliminated the curruption that exist in fertilizer distribution, making it possible for local farmers to get fertilizers at reduced rate. This action, has saved the government $157 million, and has received commendation from other governments.
In addition, import duty on the importation of agricultural equipments has been waved to encourage mechanized farming in the country.
These developments and reform by the government has led to huge private investments in the country especially in the area of food processing and storage, which is one of the major bottle necks faced by farmers.
Companies such as Blumberg Grain, a leading US food security company, plans to invest $250 million in large scale food storage facility for Nigeria's agricultural sector. This will create up to 1000 jobs and boosting food production in the country.
Also, Pz Cusson and Wilmer international in China, have collaborated to form Pz Wilmer joint venture to invest in a palm oil processing plant in the southern part of the country. This plant is expected to have a capacity of 1200 - 1500 MT per day. The company has acquired over 20,000 hectares of palm estates, and aims to increase its capacity to 50,000 hectares by 2017/2018. Pz Wilmer will be investing over $630 million in the project and aims to create 12,000 direct jobs and 33,000 indirect jobs at various skill level.
Furthermore, Dansa industries which is a subsidiary of Dangote group, plans to set up a $49 million high energy food processing plant, expected to be the largest in Africa.
With these investments and support from the federal government, it can be argued that investment in agriculture in Nigeria will be one of the top investments that will guarantee a high and sustainable ROI.
"PadronConsulting is currently taking advantage of this huge opportunity in the agricultural sector. The company plans to set up a palm oil processing plant with a 300 MT FFB capacity per day in the country, with an investment of $10 million. This project aims to be executed by 2015"
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