Nigeria’s capital importation into the agricultural sector is gaining momentum as foreign investments into the sector rose by 82 percent from $159 million (N57 billion) in 2017 to $289 million (N104 billion) in 2018, data from the National Bureau of Statistics (NBS) shows.
But on a quarter on quarter basis, foreign investments into the sector decreased by 52 percent from $62.5million in q4 2017 to $30.3million in q4 2018.
According to stakeholders in the sector, the sustained rise in investment is on account of the commitment of government at all levels 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 last year, in a telephone interview.
“The government’s 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 once neglected became an option for diversification due 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.
Since then, the country has devoted a lot of energy to deepening agriculture with initiatives such as the Anchor Borrowers Programme (ABP), placing a ban on the 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 for 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.
Furthermore, local sourcing of agro commodities has increased tremendously and this has further spurred 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 also attracted $53 million investment within the same period.
Josephine Okojie
