Nigeria Seeks To Boost Investment In Agriculture, Diversify Economy

May 3, 2015

Nigeria’s agriculture ministry has attracted $8 billion in foreign investment and aims to boost that to just over $10 billion by 2015, the country’s minister of agriculture said this week.

Akinwumi Adesina told The Wall Street Journal that the country is seeking to boost investment in agriculture as part of a drive to diversify Nigeria’s economy away from oil and gas, and to create more jobs and food security in the process.

Indonesian fertilizer company Indorama will invest $2.5 billion in new fertilizer plants, Mr. Adesina said on a visit to South Africa for the World Economic Forum on Africa. Dangote Group, run by Africa’s richest man, Nigerian Aliko Dangote, is investing $3.5 billion in what Mr. Adesina says will be Africa’s biggest fertilizer plant.

Major multinational agri-businesses are also moving in. Two weeks agao, the government approved a plan by Cargill Inc. to use cassava starch to make a sweetener that will be sold to Coca-Cola and Heineken, Mr. Adesina said.

He added agri-business company Syngenta will set up an office in Nigeria in June and there has also been interest from seed companies Monsanto Co. and DuPont Co.

In the 1960s Nigeria had a big presence in the international agriculture markets. The country controlled 42% of the global trade in groundnut oil, 27% of the world’s palm oil industry and 18% of the cocoa trade, according to data from the United Nations Food and Agriculture Organization. That was in addition to growing rice and other foodstuffs for use at home. Today that dominance has “evaporated,” the ministry says, as the government’s focus shifted to oil production in the following decades.

Nigeria is the world’s second-largest importer of rice and a major importer of wheat, sugar and fish–all products it can produce at home. The country spends about $11 billion a year importing key foodstuffs, Mr. Adesina said.

“It’s nonsensical,” said the minister, who was appointed to his position in 2011. Since then, he has been focused on rooting out corruption in the seed and fertilizer industry–“one of the most corrupt” sectors, he says–attracting more foreign investment and finding more domestic uses of local crops like cassava.

“When poverty increases we have insecurity. We are using agriculture to address that,” he said.

The agriculture ministry is also in the process of developing a commodity exchange.

Previously state-owned commodity boards controlled the sale of cash crops and also seed and fertilizer. Under Mr. Adesina, private seed and fertilizer companies sell directly to farmers.

Government officials were selling fertilizer bought on behalf of farmers to neighboring countries, the minister says. Only 11% of farmers were getting seeds and fertilizer. That is changing, he said. The change has sparked a boom in the seed industry. The number of seed companies grew from 11 to 70 by the end of 2012, he said.

Source: FOX Business

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