Five agro-commodities can earn Nigeria scarce dollars

In Nigeria, the dollar is reminding many individuals and businesses of Davido’s hit song ‘Unavailable’.

As Africa’s biggest economy grapples with its current economic downturn, the consensus is that there is no better time to leverage the potential of the agricultural sector than now, to create jobs, attain food security and earn the much-needed dollars.

On this note, BusinessDay has identified the top five agro-commodities with huge export opportunities that investors can unlock, especially by adding value to them.

Cashew nuts

Cashew, an important nut, is fast booming in the Nigerian market as exporters are exporting a larger percentage of the crop to Asia, Europe, and the United States of America.

Nigeria is a natural habitat for cashew and among the world’s largest producers and suppliers of the nuts. The country is currently rated as the fourth-largest producer of cashew nuts in Africa and sixth in the world, with a production of 240,000MT per annum, according to the Nigerian Export Promotion Council (NEPC).

It has become a top-notch cash crop in Nigeria and is eaten and also serves as industrial raw materials in firms producing chemicals, paints, varnishes, insecticides and fungicides, electrical conductress, and several types of oil.

The adaptability of cashew trees to harsh climatic conditions and poor soils provides farmers the opportunities to establish new plantations while expanding the old ones.

Two good things about cashew are that its return on investment is as high as 55 percent and its payback time is just 12 months, experts say.

According to Ojo Ajanaku, national president of Cashew Association of Nigeria, the biggest opportunity in the cashew industry is processing and the industry is waiting to be tapped.

It is mainly exported to Vietnam and India. The country exported cashew nuts in shells/shelled to the tune of N34.02 billion in the first quarter of 2023, accounting for 12.17 percent of the country’s total agric exports within the period reviewed.

Sesame seeds

Sesame seeds could play a vital role in the country’s quest to earn substantial dollars as global demand for the crop continues to rise.

Data from the National Bureau of Statistics shows that Nigeria’s exportation of sesame seeds in Q1 2023 stood at N67.66 billion, accounting for 24.20 percent of the country’s total agric exports within the period.

“Sesame has a lot of potential. It has both commercial and medicinal value and oil extracted from the seeds is better than every other seed oil,” Mutairu Mamudu, national president of Sesame Farmers Association of Nigeria, told BusinessDay in a telephone response to questions.

“It is 100 percent free of cholesterol and that is why the demand for it is very huge both locally and internationally,” said Mamudu.

Sesame seed has numerous health and industrial benefits and is widely used for baking, medicine, cosmetics, and animal feeds. It also has a high oil content of between 44 and 60 percent.

Considering its numerous health benefits and the growing preference for organic foods, the demand for the commodity has continued to grow and this is positive for Nigeria.

It remains in high demand abroad by pharmaceuticals and industries that produce soap, shampoo, lubricant, paints, cosmetics, and vegetable oil. A popular women’s body lotion Neutrogena’ is made from sesame oil.

It is considered one of the world’s oldest oilseed crops that have the highest oil content of any other seed. Sesame is usually ready for harvesting between 90 to 130 days after planting.

Shea butter

From chocolate, ice cream, and margarine, to face cream, lipstick, medicines, and soap, shea butter is increasingly in demand as a luxury ingredient for edible and personal care products globally.

It is a product found in most homes across the world, either in its raw butter form or in cosmetics products as women rely heavily on it because of its emollient properties that help solve skin problems such as wrinkles and dryness, among others.

Africa’s largest economy sits on a shea butter goldmine as the crop is grown in the wild in 20 of its 36 states, with Niger, Kwara, and Oyo having the largest production areas, according to Nigeria Institute for Oil Palm Research (NIFOR).

“The opportunity to create wealth in the shea industry is enormous in Nigeria and Africa at large,” said Jubril Bokani, national president of National Shea Producers Association of Nigeria.

“The conversion of 100,000 metric tonnes of shea nuts into about 48,000 metric tons of shea butter for export can generate about $72 million and economically sustain about 600,000 rural women,” Bokani said.

“This shows that there exists a clear opportunity for Nigeria to create wealth and employment,” he added.

According to the NEPC, global demand for shea butter is estimated at $10 billion and projected to surpass $30 billion by 2020.

Currently, Nigeria is the world’s largest producer of shea butter, producing 302, 955 MT, according to the Food and Agricultural Organisation’s 2019 figures.

In 2016, NIFOR said it had been able to reduce the long gestation period of the Karite tree from 20 to between five and seven years. But Nigeria is yet to develop a technology that will enable the domestication of the crop to further boost production.

Ginger production/processing

Exporters can take advantage to create wealth while earning FX in exporting dried and processed ginger.

Ginger is one of the most widely used food seasonings in modern diets and global demand for the crop continues to rise as the population increases.

It is a crop that is largely grown in Kaduna, Nasarawa, Benue, Niger, Gombe, and Kano states. It serves as a by-product to numerous food and beverage industries and is used for the production of ginger wine and food seasoning in most Asian countries.

Ginger is part of the plant family that includes turmeric and cardamom and has huge health benefits.

It can be consumed in different forms which include in powder form or in fresh – peeling before consumption. The plant is used as a spice and a major ingredient in a wide array of dishes.

Powdered ginger is used in the production of flavour which is utilised in a variety of recipes such as cakes, cookies, bread, crackers, ginger ale, and beer.

Its root is used as a raw material in manufacturing health products, drinks, and by the bakery industry.

Also, there are opportunities for investors who would want to invest in seeds and in the provision of easily fabricated machines in splitting the harvested ginger rhizomes.

Read also: Agriculture: Lack of crop science grasp is a problem, says Kelikume

Cocoa production/processing

Before the oil boom, cocoa was a major revenue and foreign exchange earner for Nigeria and provided millions of jobs for the people, especially those in the southwest region.

Now the country lags behind Ivory Coast, Ghana, and Indonesia in cocoa production.

The reason for this is not far-fetched: Nigeria slowed down the cultivation of the crop. Despite this, cocoa – Nigeria’s flagship crop — remains the country’s major non-oil export.

This is because numerous opportunities abound in the production of the crop, ranging from growing the cocoa beans to processing to cake and butter and making chocolates.

According to the International Cocoa Organization, the total global value of exporting raw cocoa is approximately $10 billion a year; the total value from chocolates alone, all made from cocoa, is over $100 billion a year, while the total value of all finished goods made from cocoa is estimated to be as high as $200 billion a year, all drawing from the same $10 billion raw cocoa beans produced.