Consumption, demography presents opportunity for agro – business entrepreneurs
Large population and high consumption pattern among Nigerian consumers are points that should drive entrepreneurs into agriculture, where a number of people are finding increased opportunities and growth trajectory, Start Up Digest can reveal.
“I think we have a good population here, over 170 million, Secondly, we have a large number of population shifting to white meat and healthier foods,” said Ifeanyi Okeleke, a young entrepreneur and managing director, Kenfrancis Farms, Ndoni, Rivers State.
Nigeria’s 174 million population is a favourable demography, driving market for agricultural produce. Rising middle-class that needs better processed food is also a key opportunity for agro processors.
The demography is a fillip to consumption, fuelled by increasing disposable income.
MCKinsey Report released in 2014 showed that in 2013, an estimated eight million Nigerian households had incomes of more than $7,500 per year. This indicates that the country has a sizeable population with sufficient income to meet all basic necessities and have money left over to start buying more and better food.
MCKinsey says by 2030, about 35 million households (an estimated 160 million people) could be living above this threshold.
“Today, Nigeria’s consumer market is worth nearly $400 billion per year and, based on this expanding consuming class, could reach $1.4 trillion a year by 2030. Food (including beverages) and non-food consumer goods would account for $1 trillion of the total,” the report says.
With good demography and strong consumer base, there is quality market for products.
A 2012 report by United Nations Industrial Development Organization (UNIDO) entitled “Agribusiness for Africa’s Prosperity: Country Case Studies” identifies huge opportunities (in the crop sub-sector) as cassava, rice, maize, fruits and vegetables, soybeans, and palm produce which is important for vegetable oil production. The UNIDO report showed that cocoa belongs to a unique class, as it is the dominant crop in the non-oil products and accounts for nearly 80 percent of all non-oil contribution to Nigeria’s agricultural earnings.
“Much of this has not been adequately exploited since imports of dressed chicken and other poultry meat products pervade the West African sub region. Fish production through aquaculture is rising and the market is equally expanding, offering opportunities for producers to scale up production and output,” the UNIDO report revealed.
Nigeria’s agric sector is characterised by little competition, large and growing demand for food and beverage products and favourable environmental conditions. With existent trade deficit in agricultural products where demand continues to rise, this creates tremendous opportunity for those willing to invest in reviving the sector
Currently, agro processors are key partners to manufacturers in the food and beverages value chain. In the Northern part of Nigeria, for instance, sugar makers, through backward integration, are currently empowering cane farmers technically while guaranteeing them ready market.
Entrepreneurs can also engage in either livestock or crop production for exports. Products such as vegetables, seedlings, arable, cassava, yams and potatoes, among others, are good for exports and have their markets in Southern, Western, Eastern and Northern Africa. They are also found in Europe and America where there is huge African population. But exporting equally requires some training.
Nigeria is the world’s largest cassava producer, supplying over 20 percent of global production, according to a Food and Agricultural Organisation (FAO).
Also, about N25 billion worth of fish is imported into the country annually. Rice is still imported, though the Federal Government has limited imports to firms with local plants. In fact, the country is still an import-dependent economy, implying that only eagle-eyed entrepreneurs will see opportunities.
Analysts also see big opportunities in areas such as value addition, packaging, prevention from decaying and rotting, infestation, among others.
They say for agribusiness to make its desired revenue and growth impact, the there is need for agro-processing activities to move away from primary, farm-based processing activities to a stage of secondary and tertiary levels of processing. This means that it must go beyond trading in agric products in their raw states. “ For particularly those in exports, value addition is important,” Mohammed Badaru Abubakar, national president, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) emphasises.
ODINAKA ANUDU