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Nigeria’s Agro Allied Industry: a Starting Point for Enterprise Revolution Part 2

By Peter Osalor
Perhaps the most significant thought arising out of this recovery is Nigeria’s natural inclination towards farming. Traditional involvement with agriculture and the existence of diverse ecological conditions across the country offers tantalising potential for growth of a flourishing and suitably interlinked agro-allied industry. Nigeria’s ambitions for accelerated and inclusive economic growth are contingent on achieving a vibrant agriculture sector that can support extensive down-the-line enterprise development and employment.

In fact the UN Conference on Trade and Development (UNCTAD) expressly recommends the adoption of a national investment policy to diversify the economy with strong focus on agro-allied industries. The fact that this sector is primed to spark off rapid enterprise development in Nigeria is simply undeniable. Enterprise potential exists in almost all areas of local farm production.

Nigeria currently produces over 100,000 metric tonnes of kola nut, which finds use in the manufacture of beverages, liquor and confectioneries. Yet, local processing units are rare and exports are largely limited to fresh and dry nuts with little value addition. Cassava, likewise, has emerged as a major cash crop with untapped potential in industrial use and bio-fuel development. With adequate private sector involvement, commercialised agriculture cannot only aid industrialisation and employment generation but also breach the productivity gap and reduce food costs. In terms of broad parameters, policies for effective development of the agro-allied sector in Nigeria must focus on a number of key considerations:

“Ensuring food security by increasing supply and lowering prices with the specific aim of curbing inflation.
“Enhancing credit access to small farmers and agro-based enterprises at low rates of interest.
“Providing information, support and training for emerging agro-industries and promoting best practices.

“Increasing productivity through promotion of high-growth models in food processing enterprises. “Prioritising locally available raw materials over extravagant imports. “Removing informal barriers to trade and streamlined manufacturing of agricultural products.

“Promoting greater regulatory cooperation among West African neighbours to increase regional trade.  “Reducing tariff on goods and services that support the agro-processing sector.

“Enforcing relevant safeguards for agricultural and value-added food products to guard against import surges.
“Building capacity in the private sector and promoting public-private partnership in agro-processing industries.
Nigeria’s intervention in the agro-allied sector must essentially be aimed at creating the right environment for rapid expansion of locally-owned enterprises. However, there are serious challenges in this direction.

Industrial processing of agricultural products is almost negligible, existing standards being very basic and often incomparable with export requirements. Post-harvest losses are also very high in the region, averaging up to 50% for fruits and vegetables and 25% for grains.

In many instances, losses due to customs delay and complicated documentation exceed applicable tariffs. Labour saving production and advanced harvesting and processing technologies are therefore critical for sustained revival of the Nigerian agriculture scenario. Moreover, efficient production and marketing systems will prove vital in ensuring high quality standards and competitive prices for both domestic industries and export markets.

In terms of Nigeria’s long term growth prospects, perhaps the most important consideration of all is simply the realisation that future prosperity depends not on the yield from its oil fields, but on the harvest of its land.


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