Nigerian agriculture: an untapped market for agribusinesses

With nearly 230 million inhabitants, Nigeria is Africa’s most populous country, accounting for almost 15% of the entire African population. Nicknamed “The Giant of Africa”, Nigeria is a key political and economic leader on the African continent, with a growing economy forecasted to reach USD4.3 trillion by 2050. Nigeria’s success stems from an abundance of natural resources, arable land, and the implementation of several key economic growth plans by the Nigerian government. 

Food and agriculture is a major sector of the Nigerian economy. The agricultural industry directly or indirectly employs 78% of the Nigerian workforce, and agricultural exports generate most of its national revenue. The agriculture sector is broadly divided into four sub-sectors: crops, livestock, forestry, and fishing. Crop production primarily consists of maize, rice, cassava, cocoa, and palm oil. Livestock production consists of goats, sheep, cattle, and pigs. 

Recent years have seen a renewed national interest in agricultural development as a means of improving Nigeria’s overall economy. Despite agriculture’s foundational role in Nigeria, the agricultural value chain is comparatively underdeveloped. The economy has historically been overdependent on oil exports and has neglected other sectors.  

In a bid to tackle this problem, diversify the economy, and strengthen food security, the Nigerian government has increased its focus on the agrifood industry. Recent intervention schemes such as the Agricultural Promotion Policy (2016-2020) have laid a foundation for rapid development by incentivising enterprise promotion, climate change adaptation, and nutrition-sensitive agriculture.  

Foreign agribusinesses can play a key role in accelerating Nigeria’s agricultural commercialisation and overcoming legacy challenges such as food insecurity and infrastructural underdevelopment. The local sector has struggled to modernise, facing challenges such as low productivity, inaccessible inputs, and post-harvest loss due to poor logistics. Nigeria is crying out for easier imports, faster supply chain logistics, and better value repairs. Farmers are eager to streamline their processes and adopt more modern approaches, meaning that there is ample opportunity for foreign businesses and advisors to provide solutions, expertise, and direct investment to the Nigerian market.

If your agribusiness is seeking to extend its operations to international markets, Nigeria may be the ideal place. Whether you’re looking to export your product to Nigeria, invest in a Nigerian enterprise, or acquire operations there, there are countless opportunities for growth: 

• Untapped Market Potential: Nigeria’s large and rapidly growing population presents a significant consumer base for agribusiness products and services. The demand for food, beverages, and other agricultural products is continuously increasing, offering substantial market opportunities.
• Ease of market entry: Nigeria is a predominantly English-speaking country, making communication between businesses and local farmers easier. This, coupled with farmers’ eagerness to modernise, makes it easier to contact the right local partners and bring your product or service to the market quickly.
• Export Potential: Nigeria can serve as a gateway to the larger African market due to its strategic location. Many other African countries rely on Nigeria for trade and access, enabling foreign agribusinesses to tap into a broader regional market.
• Technology Transfer: The urgent need for modernisation offers opportunities for agribusinesses to export cutting-edge technologies and techniques, as well as industry expertise and training to enhance local agricultural practices and increase productivity.
• ESG impact: Due to Nigeria’s underdevelopment, there are countless opportunities to make a lasting impact on livelihoods and the environment. By supporting Nigerian agriculture, agribusinesses can improve food security, create jobs for locals, contribute to rural development, tackle social inequalities, and reduce environmental impact.
• Government Initiatives: The Nigerian government is increasing its commitment to agricultural development. This includes implementing policies and incentives that support agribusiness growth, technology adoption, and infrastructure improvement.
• Favourable Demographics: Nigeria’s youthful population is increasingly urbanising and becoming more health-conscious. This shift in lifestyle and dietary preferences can create demand for diverse and value-added agricultural products.
• Abundant Natural Resources: Nigeria has a variety of climates and fertile lands suitable for cultivating a wide range of crops and livestock. This diversity allows agribusinesses to explore different agricultural practices and expand their product portfolios.

Farrelly & Mitchell are actively engaged in Nigerian agriculture, and passionately support ongoing efforts to develop the industry and build international partnerships. We have worked on several key Nigerian agriculture projects, including a recent technical evaluation of assets for an international company with flour and feed mills throughout Nigeria, and due diligence and feasibility studies for a Nigerian client considering an investment in poultry.

At Farrelly & Mitchell, we have supported countless food and agribusiness projects across the entire value chain. We have over 20 years of experience collaborating with governments, NGO’s, multilaterals, corporations, and DFI’s to enhance Africa’s agrifood sector. We are committed to providing commercial success to our clients, as well as long-term progress toward rural development, sustainability, and ESG goals.