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Any nation that wants to develop must look inwards to identify areas where it has comparative advantage over other nations and seek to develop the identified areas.
Apart from hydrocarbon of which Nigeria is the sixth largest exporter of crude oil and has the second largest known deposit of natural gas in the world, Nigeria also has comparative advantage in the Agricultural sector, where varieties of crops and animals are produced and reared respectively due to favorable climatic condition, good soil structure and the fact that over 70% of the entire land mass of the country is arable, though only about 48% are presently been cultivated.
The equatorial maritime air mass along the coast influences the climate which is characterized by high humidity and heavy rainfall, while the tropical continental air mass in the North brings dry, dusty winds from the Sahara. The temperature varies considerably with the season, as does rainfall which is far less in the North. The main rains occur between April and October with average rainfall ranging from 2,497mm (100 inches) in the South to 869mm (32 inches) in the North.
Until the late 1970’s when hydrocarbon was discovered in commercial quantity in Oloibiri ,present day Bayelsa state , Agriculture remained the mainstay of the economy contributing over 90% of the Gross Domestic Product (GDP) of the country as against the 40% it now contributes with crop accounting for 80%,livestock 13%,forestry 3% and fisheries 4%. Despite the prominent role of the Petroleum sector, Agriculture still employs about 70% of the entire population both formal and informal.
The investment climate in the sector before the advent of the present civilian dispension was considered unattractive, low in profitability and no serious incentives for investors.
It was against this background that the government put in place the National Economic Empowerment Development Strategy (NEEDS), supported at the State level by the State Economic Empowerment Development Strategy (SEEDS). It has initiatives in the following areas; cassava, rice, vegetable oil, sugar, livestock and fisheries, tree crops and cereals.
The NEEDS was expected to meet the following targets:
Minimum growth rate of 6% in Agriculture.
Raise agriculture exports of 3 billion dollars by the end of 2007, with cassava being a major component.
Reduce food imports from 14.5% of total imports to 5% by 2007.
Protect all prime agriculture lands for continued agricultural production.
Under this strategy and the National Agricultural Policy and the National Policy on Integrated Rural Development, the sector been able to sustain the growth of 7% attained in 2003/04.
However due to a combination of factors like unemployment, effects of global economic crisis and the crash witnessed in the stock ,property and financial sector in 2008/09 in the Nigerian economy, investors are now switching there investment radar to the various investment opportunity that abounds in the Agricultural sector.
Various investment opportunities abound for small, medium and large scale enterprise in sustainable agriculture and industrial farming. These investment opportunities would be analyzed under the following headings
• Arable Farming ( Crop Production)
Over 70% of the entire land mass (98,300,000 hectares) of the country is arable. Some of the crops that are produced in Nigeria include maize, sorghum, millet, cassava,
yam,wheat,sugarcane,cocoyam,potatoes,cotton,pineapple,plantain,bananas,beniseed,castor oil etc. Prospective investors interested in the production of bio-fuel can take advantage of the three million (3,000,000) hectares of land made available for the production of Jatropha by the federal government.
• Industrial Processing of Agricultural Products
Agricultural products require processing in order to be suitable for human and industrial use and opportunities abound in the sector for savvy investors to take advantage of. Some of the areas where such investment is required includes palm kernel cracking plant, groundnut processing plant, fish feed production etc.
• Agro – Commodity Export
According to statistic from the Nigeria Export Promotion Council (NEPC), the non-oil export segment as been growing in the past five (5) years and arguable as been one of the drive force in the renewed interest in agriculture in the country. Some of the products that are export include sesame seed, ginger, charcoal, groundnut, hide and skin, cocoa, gum Arabic, cashew nuts etc.
• Livestock Farming
More investment is required in the livestock sector in order to meet up with the consumption of animal protein in Nigeria is to be met. Some of the areas that require investment include cattle farming, pig rearing, goat and sheep rearing.
• Micro-Livestock ,Fisheries and Poultry Farming:
This is perhaps the single largest segment of the market that has received more investment in the past five (5) years since the renewed interest in Agriculture because they require less capital start-up and there is ready market for the products produced.
• Agricultural Biotechnology :
The global demand for alternative energy has opened up the market for bio-fuel which has consequently created opportunities for entrepreneurs in agricultural business. The production of ethanol fuel from cassava, jatropha plant, sunflower, sugarcane amongst others is some of the areas of investment in this sector. Like it as already been mentioned, the government of Nigeria as made available three (3) million hectares of land for the cultivation and development of jatropha plant.
Other investment areas in the sector include Agro-Tourism, Supply of Agricultural inputs and machineries and Agricultural consultancy.
A number of incentives have been put together to encourage investment in agriculture. These include;
o Finance Credit
o Tax Holdings
o Reduced Customs Charges on Imported Inputs
o Technical Support through Research Institutions
o Export Financing and Guarantee
o Agricultural Insurance Scheme
o Extension Services
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