AfDB woos Chinese investors for billions of dollars investments in Nigeria’s agricultural sector

The African Development Bank (AfDB) is holding talks with keen Chinese investors to possibly leverage billions of dollars worth of investments into the Nigeria’s agriculture sector which holds huge prospects for the country and the continent.

The AfDB hopes ongoing talks which reached a climax at a meeting which began on Tuesday in Abuja- could bring in huge investments across Nigeria’s entire value chain from the China – eventhough there are no figures just yet on financial expectations.

The AfDB holds about $5bn active portfolio investments in Nigeria -with almost about $1bn in the agriculture sector – but hopes to expand that to about $16bn in the next few years, catalysing private investments.

The AfDB is now looking to catalyze investments into four major areas including; agriculture production technologies, joint venture agro-industrial parks with local agribusiness, sole development of agriculture-industrial parks and joint Afro-industrial parks with state governments.

Ebrima Faal, AfDB Director and CEO in Nigeria said at the meeting that the bank has been reaching out to global investors on behalf of Nigeria but that the Chinese have now indicated interest to invest in agriculture.

“The Chinese has gone through where are now in terms of crops, mechanical equipment, adequate financing to support that. We think we can leverage that for a win-win situation.

“We are not asking for loans or charity but that they should come and invest with us and they have been quite responsive on available opportunities. Our interest is private sector investments in agriculture and industrialization, not loans or arms,” Faal told BusinessDay at the meeting which discussed huge investment opportunities in Nigeria, as well as challenges.

The AfDB officials had engaged with the local business community, federal and state governments earlier in the year on how to transform agriculture and rural areas.

“As you know we are trying to step up agroprocessing in Nigeria, it is going to be a big part of investment Programme going forward.

“We know what we want to do over the next five years getting the level of investments to $16billion across board.

“In agriculture, we expect that we should be able to invest close to $1bn in that space,” Faal stated.

“We needed the Chinese, clealry, the bank will invest, but we need partners, global partners that can come in and invest with us. So we are very pleased that the Chinese are here as part of the global investment community.

“China has a vast experience in agroprocessing across the value chain, from production all the way to industrialization.

Faal said they anticipate investments will come in many forms, including better seeds quality, better fertilizers, equipment, agricultural implementation and of course, financing will be part of it as well.

Speaking on whether there could be security threats that could hinder the anticipated Chinese investments, he said insecurity normally comes about due to lack of opportunities.

“What we are trying to do is bring these economic opportunities to the communities and then be able to generate employment and reduce poverty and increase access for most people,” he noted, emphasizing strong correlation between the ability to create opportunities and the reduction in security.

Faal could not stress the amount of investments the bank can leverage for the Nigeria’s agriculture sector, saying this is the first engagement with the Chinese.

Oyebanji Oyelaran-OyeyinkaSpecial Adviser on Industrialization to the AfDB President said the bank’s investment discussions with China is based on the country being very close to Nigeria in terms of experience from underdevelopment to a high performing country. Also it has transformed itself from a poor country to a global player and has actually lifted over half a billion people out of poverty.

“So we believe we can do what they have done, and also because they are willing to work with us.

Oyelaran-Oyeyinka said the bank has actually identified about 14 zones across the country, some of them are already in areas where production are ongoing, they are brown fields, and we have had discussions with all the big players, Dangote, Olam etc

On possibility of bad deals, he said there are lots of bad stories out there but that the Chinese are the biggest investors in infrastructure in Africa. He emphasized that things go wrong when terms of engagement and trade are not met.

He suggested that whatever deals would be done out of clear negotiations and contractual terms. He said however, that what the AfDB is looking for with the discussions are Direct private sector Investments and not loans as much as possible.

He said the planned investments with the Chinese will help boost Nigeria’s chances on the AfCFTA as it will help it industrialise and become and established production hub especially agriculture.

“Nigeria needs to move very forcefully, rapidly and deliberately in a way to transport itself from importer of food into a power house in Africa.

“We hope that before the end of the year, we will have new sets of people from Korea, China again and we are goin to keep doing this.”

Liyuan JIA, Co-Founder, IESCO (Beijing) Consulting Service, Beijing, China, however said it would be necessary for them to conduct some more investigations on the policies and the relevant supporting infrastructure and may need to try to get more information from the state governments and other relevant institutions.

She said the companies hope to leverage cheap Labour in Nigeria and other supporting opportunities and that her company would be interested in the processing zones.

“There are so many interested partners in China including large scale companies and middle size companies because of the advantages here.

“I am sure there are more and more investors coming,” JIA noted.


Onyinye Nwachukwu, Abuja

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