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Beyond Oil: Nigeria’s Untapped Agro-Export Boom Potential and How to Capitalise on It

Nigeria is Africa’s biggest oil producer, but the country has another major asset that often gets overlooked: its promising agriculture sector. With the right policies and investments, Nigeria could utilise its vast arable land and favourable climate to emerge as a globally competitive agro-exporting powerhouse.

The Untapped Potential of Nigerian Agriculture

Agriculture contributes around 22% of Nigeria’s GDP and employs some 70% of the workforce. Both large-scale farming and small-holder subsistence agriculture are practised. Major crops include cocoa, palm oil, cashew nuts, cassava, yams, rice, fruits, and vegetables. There is also substantial livestock and dairy output.

Despite this, Nigeria still imports large volumes of agricultural items like rice, wheat, fish, palm oil, etc., spending $6.7 billion annually on food imports alone. This underscores the enormous untapped capacity in Nigeria’s agriculture sector.

With only 40% of available arable land currently under cultivation, Nigeria could further expand agricultural land with irrigation and mechanization. Similarly, improving yields through better seeds, inputs, and farming techniques can rapidly boost overall production.

If well utilised, Nigeria’s rich agricultural potential allows the country to sustainably rise beyond oil dependence, build robust agro-exporting industries, and create prosperity in rural regions.

Key Factors Holding Back Nigeria’s Agro-Export Potential

Unfortunately, several factors have constrained the expansion of Nigeria’s agricultural exports over the years, including:

Limited Processing and Storage Infrastructure

Nigeria lacks adequate rural roads, harvest handling facilities, storage infrastructure, and processing plants to convert raw agricultural output into packaged foods or value-added exports. High post-harvest waste arises from a lack of cold chain logistics and silos.

Low Yields and Productivity

With average yields of most crops far below potential benchmarks, Nigeria’s agriculture productivity trails behind other emerging nations. This hampers cost competitiveness in global markets. Weak seed varieties, poor farming techniques, and overreliance on rain-fed agriculture contribute to the problem.

Weak Quality and Safety Certification Processes

Global standards and strict quality regimes are making certification mandatory for accessing many foreign food markets. However, most Nigerian farms lack robust HACCP and ISO quality norms implementation expertise or capacity.

Complex export procedures and high logistics costs

Export documentation intricacies, customs hurdles, and rising freight rates also discourage Nigerian food exports. Priority export infrastructure like dedicated agro-airports, testing labs, and isolated food terminals is still rare.

Low Adoption of Modern Agri-Tech and Innovations

There is relatively low technology adoption in Nigerian farming, with automation, precision agriculture, and biotech innovations lagging behind. This hampers yields, efficiency, and international competitiveness.

Poor market connectivity and trade promotion

Information asymmetry means most Nigerian farmers are disconnected from profitable export markets, quality demands, and pricing mechanisms abroad. Enhanced trade promotion through Nigerian diplomatic missions and agriculture export councils is needed.

How Nigeria Can Capitalise on Growing Global Agro-Export Opportunities

Despite these challenges, the world presents growing and lucrative opportunities for Nigeria’s agriculture exports, including:

Asia’s Surging Food Import Demand

Rapidly rising populations and incomes in Asian countries like China, India, Malaysia, Vietnam, etc. have seen their food import demand balloon in recent years. This demand seems set to strengthen further. With its location advantage and low cost of labour, Nigeria can target these large Asian markets with value-added and semi-processed food exports.

High Prices and Safety Premiums for Organic Foods

Across European and North American markets, consumer preference is shifting towards organic, non-GMO, natural, and minimally processed foods, which fetch far higher prices. Nigerian small-holder agriculture has innate organic advantages, considering low pesticide usage rates. With proper internationally accredited organic certification systems, Nigeria can tap into these fast-expanding high-value segments abroad.

Increasing Demand for Specialty and Ethnic Food Ingredients

Unique Nigerian exports like cocoa powder, sesame seeds, ginger, cashew nuts, dried fruits, cassava starch, habanero pepper, and many more speciality ingredients are experiencing heightened demand in foreign cuisines, nutraceuticals, and food processing industries.

Bilateral and Regional Trade Agreement Opportunities

Nigeria currently utilises very few bilateral and duty-free multilateral trade agreements to enhance its agro-export regional reach. Better agreements under ECOWAS, several undernegotiation EU/UK pacts, and the African Continental Free Trade Area offer areas for preferential Nigerian agricultural access to foreign markets.

How Nigeria Can Seize These Agro-Export Opportunities

To amplify Nigeria’s agriculture exports and gain global market share as outlined above, strategic priority actions are required:

Invest in rural transport and storage infrastructure.

Connecting farms to markets through a network of irrigation, warehousing zones, and roads accompanied by export-handled airports and seaports can slash post-harvest losses and strengthen export competitiveness. Off-grid rural solar power enhancements can boost value-added capabilities too.

Incentivize Technology Adoption to Raise Productivity and Quality

Encouraging wider usage of GPS-guided precision farming techniques, soil sensors, greenhouse tunnel cultivation, drones, IoT devices, hydroponics, etc. through affordable financing schemes and farming cooperatives can rapidly improve yields and income security, fostering agro-export capacity.

Expand Access to Quality Inputs and Extension Advisory

High-quality seeds, saplings, breeds, and growth supplements tailored to Nigeria’s regions, along with on-field technical expertise for farmers, are vital for optimising output, boosting quality consistency, and achieving the process standardisation needed for stringent foreign markets. Dedicated agro-export zones with mandated protocols can accelerate this.

Invest in women farmers and young entrepreneurs.

As women constitute some 50% of Nigeria’s farming workforce and entrepreneurial youth bring innovation into agriculture, specifically incentivizing their involvement through financing schemes and agriculture skills programmes can have outsized impacts on amplifying Nigeria’s export farming potential.

Remove export bottlenecks and lower logistics costs.

Pruning excessive red tape processes through digitization, along with designated one-stop agro-export clearance windows at airports and seaports, can lessen delays and costs, thus encouraging exports. Air or ocean freight rebates, export credit incentives, and streamlined terminal access for select agro-products based on yearly foreign demand forecasts can further assist exporters in cost management.

Upgrade food safety and quality certification frameworks.

Expanding national capacity for international food safety standard certifications like FSSC 22000, BRC, IFS PACsecure, etc. through accredited auditors, upgraded testing lab infrastructure, and subsidised compliance consultancies for Nigerian food processors shall enable far greater penetration into quality-conscious foreign markets.

Expand Agro-Diplomacy and Export Subsidies

A dedicated trade promotion council focused on explicitly developing Nigerian agricultural exports through commercial officers stationed abroad and participation in global food exhibitions will connect exporters to evolving opportunities worldwide in real-time. Strategic export subsidies for priority value-added agro-products delivered through transparent e-voucher systems can temporarily support wider market access while exporters achieve economies of scale.

Launch robust agricultural clusters and export zones.

Geographic zones exclusively focused on boosting exports of a few selected crops through the provision of end-to-end infrastructure facilities like customs clearance channels, packaging units, financial services, and streamlined administrative processes can foster world-class export-oriented production ecosystems for Nigerian agriculture, centred around specific regional strengths and target foreign markets.

The bottom line

With strong political will and coordinated public-private sector action focusing squarely on the measures above, Nigeria can successfully harness export-oriented agriculture to drive the next phase of economic emergence—beyond finite oil—creating jobs, growth, and rural prosperity in the process. The global demand momentum for agricultural shipments firmly aligns with Nigeria’s interests. The time for action is now.

 

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