Business Opportunities in Nigeria

Nigeria is Africa’s most populous country with a population of 150 million. This makes one in every six Africans a Nigerian. It is also one of the largest oi...

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Business Opportunities in Nigeria

Nigeria is Africa’s most populous country with a population of 150 million. This makes one in every six Africans a Nigerian. It is also one of the largest oil producer on the continent creating huge inflows of foreign income.

Without question, Nigeria holds enormous commercial potential as recent administrations have focused on developing the non-oil economy and tackling corruption and red tape.

Nigeria Agro Business

The explosion of industries such as the mobile telecoms market and the unparalleled success of foreign companies such as South Africa’s MTN have also demonstrated that potential can be turned into reality. Despite persistent problems of corruption and bureaucracy the international business community increasingly sees Nigeria as the central driver of a vast African market that remains the last under-developed commercial market in the world.

Getting a local business partner in Nigeria is highly recommended but finding the right partner is critical. Your biggest risk will not be ending up with a fraudulent partner but an ineffectual one – the same risk as you would find in any other country. Make sure potential business partners come recommended by someone you know and trust. Do proper research into the people and companies that you are dealing with and be sensible and cautious in making decisions. Your local Nigerian Trade Commission and the Nigerian Investment Promotion Council both offer screening services to validate the authenticity of companies.

Agro-Business in Nigeria

Not only does Nigeria have approximately 84 million hectares of arable land, fertile soil, excellent climate for growing crops and low labour cost, but it also has the advantage that 70% of its population works in the agricultural sector.

The international community has recognised that investment returns in Nigeria are high and various donors and organisations are investing in specifically its booming agriculture sector. At the moment this sector contributes to 47% of its Gross Domestic Product (GDP) and is responsible for 10% of its export earnings. Foreign direct investment inflows are currently at $6.1 billion and the GDP is growing at a rate of 7.71%, making Nigeria the fastest growing economy in Sub-Saharan Africa as well as placing Nigeria as a ‘top 20’ economy in the world.

Various initiatives have been created to boost Nigeria’s agriculture sector as well as to attract investors and further develop participation of the private sector. These initiatives include:

  • Nigeria’s Agricultural Transformation Agenda
  • Nigerian Incentive based Risk Sharing System for Agricultural Lending (NIRSAL)
  • Enhancing Financial Innovation and Access (EFInA)
  • Nigerian Strategy Support Programme (NSSP)

Nigeria’s Agricultural Transformation Agenda is aimed specifically towards the private sector. Investors will benefit from directly selling farmers inputs, being involved in key sectors – e.g.: fertilizer, agricultural equipment, etc.; and representing the agricultural sector to the government.

Nigerian Store

The Nigerian Incentive based Risk Sharing System for Agricultural Lending (NIRSAL) benefits from a 450 billion Naira credit portfolio set up by the Central Bank of Nigeria that increases access to credit and lowering interest rates. Investors will also be able to benefit from a N1 billion investment into Micro Finance Banks (MFBs) in rural areas – this initiative makes it easier for investors to do business in rural areas as the indigenous supply chain will benefit from much improved access to banks, credits and loans.

Enhancing Financial Innovation and Access (EFInA) is a financial sector initiative that promotes financial inclusion in Nigeria. EFInA is funded by the UK Government Department for International Development (DFID) and The Bill & Melinda Gates Foundation. The initiative supports and facilitates the emergence of an all-inclusive and growth-promoting financial system – in particular its support for promoting financial access through catalysing the provision of appropriate services at an affordable price to those who are currently excluded will support the indigenous supply chain and provide investors with more reliable access to markets.

Nigerian Strategy Support Programme (NSSP) is focused more on policy making in the agriculture sector providing investors access to further detailed knowledge about the sector through data and analysis.

Through the above initiatives, Nigeria is illustrating its commitment in achieving its Millennium Development Goal of eliminating poverty and promoting food security. The goal is to increase agricultural output by 160% from $90 billion in 2011 to $256 billion in 2030. Investors will benefit from the country’s renewed focus on this sector and the potential to participate in assuring food security both in Nigeria and beyond.


Nigeria's Key Crops

Nigeria is the largest Sub-Saharan African country that is producing fresh produce and perishable goods. There is significant and growing demand by the EU to import more perishable goods and this market could be a dominant one for the country once the agricultural sector is in a position to export more goods.

Key crops that are highlighted by the Federal Government and its various initiatives include:

  • Cassava
  • Tomatoes
  • Rice
  • Cotton
  • Fisheries
  • Maize
  • Cocoa
Nigeria Agriculture

The domestic and global demands for these crops are increasing providing an excellent opportunity for stakeholders to invest in. For instance, the global market for cassava is vast and is still growing. Cassava can be used for chips and its remains can be processed into pellets which could contribute to animal feed and energy production.

The global market for both cassava chips and pellets is approximately $1 billion and has grown at 20% per annum. Investment wise, with a start up of N525 million and a 115 000 ton cassava input mill, there would be an estimated internal rate of return (IRR) of 19% and could break even after 4.5 years.

The key crops identified are grown in areas best suited for producing high quality products. For example, cotton production is more in the Northern part of the country and in states such as Zamfara, Katsina, Kano, Jigawa; while maize production is over central Nigeria and in states such as Niger, Kaduna, Bauchi, Gombe and Borno; and cassava and cocoa production is more in the Southern part of the country in states such as Ogun, Lagos, Osun, Ondo, Edo, Enugu, Ebonyi, Kogi and Anambra.

Product / crop selection could therefore influence heavily where investors choose to operate their businesses.

A determined government plans to have Nigeria’s agriculture production self sufficient by 2020 and export 80% of its total output by 2025. These targets are achievable and very realistic for three basic reasons:

  • Favourable Conditions: The country has the necessary components such as a wonderful topography and excellent climate to grow crops that are in global demand.
  • Government Support: The Federal Government has the right attitude. These initiatives are fully supported by the government while agribusiness is becoming a priority for its economic growth.
  • External Backing: The country has excellent support from external organisations and governments such as the G20, US government, DFID, the Bill and Melinda Gates Foundation and the World Bank, who all believe it will achieve its potential.

Overall, Nigeria is an investor’s dream and with the rapid growth rate of its agriculture sector, it is destined to become a model country not only in West Africa but for the rest of Africa.

Did You Know?

Africa Business Pages Logo
  • Economic Powerhouse: Nigeria boasts the largest population in Africa and is one of the continent's largest economies, driven by a vibrant mix of agriculture, telecommunications, and a booming entertainment sector.
  • Untapped Solid Minerals: Beyond its famous oil reserves, Nigeria is a treasure trove of over 40 different types of commercially viable solid minerals—including gold, tin, columbite, and tantalite—many of which remain largely unexploited.
  • Eco-Friendly Coal: Nigerian coal is highly sought after internationally. It is one of the most bituminous coals in the world, renowned for its extremely low sulfur and ash content, making it exceptionally environment-friendly.
  • Massive Bitumen Reserves: Nigeria possesses an estimated 42 billion tonnes of indicated bitumen deposits—which is almost twice the volume of its existing crude petroleum reserves!
  • Agricultural Backbone: Despite the dominance of the oil sector in export revenues, agriculture remains the true backbone of the workforce, employing roughly 70% of the Nigerian population.

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