Opportunities in Nigeria’s N9.2trn annual food consumption

Food consumption in Nigeria portends massive investment opportunities. In one year, total food consumed in the country amounts to N9.2 trillion of which N1.3 billion – 14 percent, is imported. According to industry watchers, attempt by the government to reduce importation and increase domestic food production in recent years has been having massive positive effect on the economy in terms of new businesses and creation of about 1.8 million jobs. The analysts believe that it is because about 70 percent of Nigerian populace, who actually live on $1 per day, grow their own food, leaving about 30 percent to be served by the domestic formal sector and imports.

Going by United Nations’ report that shows that about 70 percent of Nigerians live on $1 a day, almost N20 billion worth of the food consumed by this over 100 people is produced through subsistence farming.

BusinessDay investigation gathers that these Nigerians, as family units or households, rear crops such as vegetables, yam, cassava for the production of garri, akpu, fufu and elubo, and livestock such as local chicken and goats. Some, particularly those living in rural areas, also fish in rivers to get fish to eat. What they produce may not meet globally acceptable level of feeding requirements but these prevent them from dying of hunger.

This shows that Nigerians spend at least N25.2 billion on food daily, going by latest reports released by NOI polls, which states that about 80 percent of Nigerians spend at least $1 on food with only 20 percent spending less.

On this estimate, 80 percent of the current population of 175 million show that 140 million people spending N160 a day spend N22.4 billion on food. With the remaining 35 million people spending even about half a dollar estimated at N80, this amounts to N2.8 million to arrive at a very modest figure of N25.2 billion because very many Nigerians spend so much more on food.

Orimadegun Agboade, vice president, Nigerian Association of Small and Medium Enterprises (NASME), states that this level of food consumption in Nigeria should be pleasantly alarming for investors. He says “it is a good time for investors to come and tap into the food industry. But there are challenges because these food investors may not be able to provide food that would be cheap enough for the masses. But, I still believe investors need to explore these possibilities. I know of a teacher who left teaching to sell amala to mechanics, bus conductors, drivers, and so on. Her shop is always filled up and she has been able to buy a car in such a short while. So, I think investors should leverage on this.”

Nnamdi Anakwe of Foraminifera Market Research also explains the reason seemingly small reduction in food importation in recent years always have massive impact on the Nigerian economy. He says “because Nigeria is so big in terms of population and going by the rebased GDP, any small change in quantity and monetary value always end up not being so small and having massive impact on the people. Also, the rising trend to shop in much more convenient areas by Nigeria’s growing middle-class is bringing most of the local food, which had hitherto been traded informally, to be traded in the formal sector in highbrow shops and this is having good effect on the economy.”

So, apart from the estimated N20 billion food grown through subsistence farming, even about half of the remaining N5 billion worth of food are traded informally.

According to analysts, players in the formal sector who want to tap into this massive food market should explore ways of increasing the current food production output, storage, processing and supply of the food produced within the country in very cost efficient ways, because a very huge market exists for hygienically produced food supplied with convenience to consumers to over 50 million people who buy the food they need.

OLUYINKA ALAWODE