Nigeria is striving to diversify its economy and export revenues away from dependence on crude oil exports. One promising path to achieving this goal is by rapidly expanding agricultural exports. The country’s deep agro-ecological potential, large tracts of arable land, and enterprising farming population provide strong foundations. However, a strategic approach is required to boost productivity, meet stringent quality standards, and develop competitive value chains targeting foreign markets.
Prioritising Production of High-Value Export Crops
Nigeria needs to identify and focus on crops that offer the highest foreign exchange earnings potential in target export markets. These include fruits, nuts, vegetables, spices, coffee, and cocoa, for which global demand is rising rapidly.
For instance, the Middle East and Europe present a large opportunity for increased exports of mangoes, sesame, hibiscus, and chilli peppers from Nigeria. Rising health consciousness has also increased the demand for organic fruits, vegetables, nuts, and spices in advanced markets.
Improving Productivity to Boost Exportable Surpluses
To enhance foreign exchange earnings, the emphasis has to be on improving productivity rather than just expanding cultivation areas. Wider uptake of high-yielding seed varieties, mechanisation, irrigation, precision agriculture technologies, and GAPs is vital.
For example, expanding greenhouse vegetable farming clusters adopting Israeli greenhouse technology can increase yields up to 20 times compared to traditional techniques. This quickly increases exportable volumes.
Developing robust value chains
Generating greater export value requires building well-organised value chains spanning inputs: supply, production, harvesting, storage, processing, quality assurance, packaging, marketing, and logistics.
Contract farming arrangements linking small farmers to exporters enhance coordination in the chain. Consolidation of smallholder farms into clusters also helps organise production.
Strengthening packaging and processing
Investing in packaging that extends shelf life and maintains quality is essential for exports. More processing of semi-finished products before export also realises greater value addition compared to raw commodity exports.
For instance, cashew processing plants in Nigeria to extract cashew nut kernel would earn far higher value than raw nut exports. More investment is needed in such agro-processing.
Improving quality management
Nigerian agro-exports must meet globally benchmarked quality, food safety, and phytosanitary standards stipulated by target markets. This requires mainstreaming GAPs, GMPs, HACCP, traceability systems, and ISO certification across agricultural value chains.
Facilitating market entry
Stronger participation in international food and commodity expos helps exporters interact with and understand importers’ requirements better. Government trade delegations also help open up new markets by negotiating bilateral agreements and trade partnerships.
Leveraging E-Commerce Platforms
Emerging e-commerce channels like online farmers’ markets and agriculture digital platforms allow small Nigerian farms and firms to directly access export markets. Agricultural exports can be integrated into mainstream international e-commerce flows.
Building advanced logistics infrastructure
Due to agriculture’s perishable nature, exports require extensive cold chain infrastructure for air and sea freight, reefer containers, cool warehouses at ports, etc. Rapid cargo clearance facilities at airports and seaports also minimise delays.
Accelerating Air Cargo Exports
Export by air allows Nigeria to competitively supply distant, high-value markets despite higher freight costs. More cargo flights connecting Lagos and Abuja with Europe, Asia, and the Middle East are essential.
Improving Access to Trade Finance
Limited access to trade finance often hinders exporters from fulfilling large orders. Increased provision of pre-and post-shipment finance through export subsidies and commercial credit will facilitate export growth.
Tapping into regional markets
West Africa offers a ready-to-export destination given its geographical proximity and duty-free access under ECOWAS. Nigeria’s agro-exports should strategically target increased market share in Ghana, Cote d’Ivoire, Senegal, etc.
Boosting Foreign Investment in Agriculture
Attracting FDI into large-scale commercial farming, food processing, and agro-industrial parks generating exports will catalyse production, processing, and value addition. The government needs to address key investor concerns.
Lowering Costs of Production
High input costs, weak infrastructure, and inefficient logistics undermine Nigeria’s export competitiveness. Lowering costs through more private sector participation in input markets, mechanisation, and logistics is vital.
Supportive fiscal and monetary policies
Export incentives, preferential export credits, duty drawbacks on inputs, and a competitive exchange rate regime boost export competitiveness. Favourable agro-export policies are essential.
Robust Certification Infrastructure
Labs and bodies certifying food safety, organic status, fair-trade compliance, etc. build the global credibility of Nigeria’s agro-exports. Investments in accredited certification infrastructure should be prioritised.
Strategies for Developing Competitive Value Chains for Nigeria’s Top Agriculture Exports
To reap the full benefit from agro-exports, Nigeria must build efficient, internationally competitive value chains for each major commodity identified as having high export potential.
Cocoa: Boosting Processing, Quality, and Sustainability
Nigeria is currently the 4th largest cocoa exporter globally. However, 70% of the local cocoa is exported raw. More domestic processing into cocoa butter, liquor, and powder is vital to earning higher value and creating jobs.
Training farmers on proper fermentation and drying processes is crucial to meeting quality demands. Investing in solar dryers reduces pollution and defects. Certifying Nigerian cocoa as sustainably produced improves market access.
Cashew: Linking Farmers to Processors
Nigeria is the 6th largest raw cashew nut exporter worldwide. Boosting local processing into white kernels could increase earnings fivefold compared to whole nut exports.
Facilitating contract farming linkages between cashew farmers and processors ensures a steady supply for the capital-intensive plants, raising capacity utilisation.
Sesame: Mechanising for Higher Productivity
Nigeria is currently the third-largest sesame seed exporter globally. However, yields remain low at 500 kg/ha compared to global best practices of 1,200 kg/ha.
Mechanising land preparation, planting, and harvesting will improve yields, cost efficiency, and export volumes. High-oil-content varieties that meet export specifications should be distributed to farmers.
Palm Oil: Improving Quality and Adding Value
Crude palm oil is Nigeria’s second-largest agricultural export. However, volumes have stagnated owing to low yields and quality issues. Investment in new high-yielding seedlings, best practices, integrated mills, and refining capacity can enhance productivity, oil extraction rates, and premium pricing.
Hibiscus: Consolidating Small Producers
Nigeria’s hibiscus exports are currently fragmented, with collections from smallholder farms. Consolidating farmers into producer clusters helps achieve economies of scale in production, post-harvest handling, packaging, and marketing.
Ginger: Establishing an Integrated Facility
Nigerian ginger exports are largely raw due to limited large-scale processing capacity. Setting up a state-of-the-art integrated ginger washing, polishing, drying, and packing facility would add value while meeting stringent quality demands.
Sorghum: Developing Food and Feed Value Chains
Nigeria is among the top sorghum producers but exports little currently. Integrated value chains catering to burgeoning food and animal feed demand in the Middle East and Asia need to be developed through partnerships and investment.
Shea: Standardising Quality
Nigeria produces abundant shea nuts but has minimal exports due to poor-quality processing. Facilitating mechanised shea collection centres adopting common standards would enable large export volumes.
**Beef and Livestock: Improving Traceability**
Live cattle exports to neighbouring countries offer immediate opportunities. However, a comprehensive livestock traceability system is essential to unlocking exports to high-value Middle Eastern and Asian markets.
Developing Nigerian Horticulture Value Chains for Export
Nigeria has extensive agroecological diversity, suitable for growing a wide array of fruits and vegetables. However, horticulture exports have remained low. Developing efficient value chains from planting material to market is critical to tapping export opportunities.
Mango: Focusing on Export Varieties
Nigeria produces diverse mango varieties. But productivity is low at 5 MT/ha against a potential of over 20 MT/ha. High-density orchards using new early and late-maturing varieties can spread seasonal supply for exports. Packhouses and ripening chambers are needed to manage quality.
Citrus: Building Integrated Packing Infrastructure
Smallholder citrus production can be integrated for exports by facilitating centralised packhouses for grading, washing, waxing, and packing based on international standards. This allows bulk consolidation for exports.
Pineapple: Improving Post-Harvest Practices
Pineapple exports are undermined by suboptimal harvesting and post-harvest handling. Training farmer associations on techniques to improve shelf life based on pineapple maturity and ripeness criteria will enable exports.
Pepper: Developing Irrigation Schemes
Nigeria exported 52,000 tonnes of chilli peppers in 2020. Solar-powered irrigation schemes can rapidly increase dry-season pepper cultivation. Drying equipment to produce high-quality dried peppers will add export value.
Leafy Vegetables: Strengthening Cold Chains
For highly perishable leafy greens, integrated cold chains are critical, starting from farm-level refrigeration and insulated trucks through airport cold storage facilities. Leafy vegetable exports can then thrive.
Tomatoes: Plugging Post-Harvest Losses
Nigeria’s low tomato shelf life results in up to 45% post-harvest losses. Farm-level off-grid solar dryers can convert surplus tomatoes into pulp, paste, and powders for export. Light-weight reusable plastic crates also minimise damage.
Herbs and Spices: Automating Processing
Nigeria has excellent conditions for herbs like basil and spices like turmeric. But processing is manual. Mechanised drying, sorting, cleaning, and milling will meet export specifications.
Organic Produce: Strengthening Certification
Growing global organic food demand presents an export opportunity. Rigorous on-farm data recording and traceability are essential to securing internationally recognised organic certification.
Targeted investments, partnerships, and solutions across the value chain, as highlighted, will position Nigeria’s prioritised agricultural commodities to expand foreign exchange earnings through exports. With the right strategies, Nigeria can leverage its agro-endowment to build thriving export-oriented agriculture.
Key Policy Reforms and Partnerships Needed
For Nigeria to realise its potential as a global agro-export powerhouse, strategic policy reforms and institutional changes are vital across the following aspects:
Improving access to finance
- Increase agriculture lending by commercial banks to at least 10% of total credit by lowering risk weights and reserve requirements.
- Facilitate private equity funds focused on agro-processing and agriculture infrastructure with tax incentives.
- Establish export development funds through collaboration between CBN, BOI, and AFEX to provide low-cost financing for exporters.
Boosting investment in infrastructure
- Accelerate the development of special agro-industrial processing zones and staple crop processing hubs across Nigeria with fiscal incentives.
- Fast-track investments in rural roads, irrigation infrastructure, solar-powered cold storage, and pack houses through public-private partnerships
- Improve cargo handling infrastructure at airports by allowing private sector participation to develop dedicated agro-cargo terminals.
Reducing logistics bottlenecks
- Streamline and automate ports and border release and clearance processes for agricultural exports through single-window systems.
- Work with shipping firms to enhance reefer container availability and cost-effectiveness for fresh produce exports.
- Engage international airlines to operate more direct cargo flights connecting Nigeria’s agro hubs to key export markets.
Enhancing skills and technology
- Expand agricultural research funding to build expertise in priority crops and develop improved technologies tailored for export success, e.g., greenhouse farming.
- Strengthen vocational training programmes to build skills in agricultural processing, post-harvest handling, quality assurance, packaging, and logistics to meet global standards.
- Facilitate precision agriculture technologies like drip irrigation, biofertilizers, and climate-smart solutions through pilot projects at agriculture universities.
- Promote medium-scale mechanisation suitable for family farms to enhance productivity and quality.
Improving rural infrastructure
- Expand rural electrification schemes using decentralised renewable energy solutions to drive cold storage and agro-processing.
- Increase investment in all-season rural road networks to enable easy crop movement from farm gates to logistics hubs.
- Extend irrigation infrastructure like small reservoirs, bore wells, and sprinkler systems through community-based partnerships.
Facilitating market linkages
- Support farmer clusters and establish staple crop wholesale markets and commodity exchanges for transparent price discovery and trade.
- Utilise ICT platforms to provide market information and digitally link farmer cooperatives to overseas buyers, reducing middlemen.
- Organise Nigerian agro-export promotion events in target markets, bringing international buyers to directly connect with Nigerian exporters.
- Negotiate mutual recognition agreements with key markets to secure the equivalence of Nigerian food safety and phytosanitary certification processes.
With the right mix of policy support, infrastructure development, technological integration, and market linkages, Nigeria can emerge as a globally competitive player in diverse agricultural exports. This will significantly boost non-oil foreign exchange earnings for the economy.