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1 st West Africa Islamic Investment Forum

1 st West Africa Islamic Investment Forum. Date: 28 th February - 1 st March, 2011/ 26 th – 27 th Rabi’ul Auwal 1432 A.H. Venue: Tahir Guest Palace Kano, Federal Republic of Nigeria. FEDERAL MINISTRY OF AGRICULTURE & RURAL DEVELOPMENT. INVESTMENT OPPORTUNITIES IN

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1 st West Africa Islamic Investment Forum

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  1. 1st West Africa Islamic Investment Forum • Date: 28th February - 1st March, 2011/ 26th – 27th Rabi’ul Auwal 1432 A.H. • Venue: Tahir Guest Palace Kano, Federal Republic of Nigeria

  2. FEDERAL MINISTRY OF AGRICULTURE & RURAL DEVELOPMENT INVESTMENT OPPORTUNITIES IN NIGERIAN AGRICULTURAL SECTOR by Professor Sheikh Ahmed Abdullah,oon, fnim Honourable Minister

  3. Outline • INTRODUCTION: Nigeria in brief • OPPORTUNITIES: • Production • Storage • Processing • Market Development • Research & Development • Bio-fuel Development • SOME INCENTIVES FOR PRIVATE SECTOR • INVESTMENT IN AGRICULTURE • CONCLUSION • CONTACTS

  4. INTRODUCTION • Nigeria in brief • Lies between the equator and the Tropic of Cancer • 140m population (2006) • 36 States, Federal &Presidential Democracy • Climate varies from tropical (at the coastal areas) to subtropical (in the northern areas). • Highly diversified agro-ecological condition, which makes possible the production of a wide range of agricultural products

  5. Nigeria: Base Agric Resources Total agric land – 79 million Ha (only 44% currently cultivated) Fresh surface water – 267 billion cubic meters discharged into the Atlantic annually (37 billion stored in dams) Underground water – 58 billion cubic meters Annual rainfall range – 300mm to 4000mm Potential irrigable area – 3.14million Ha (under 7% currently utilizes)

  6. ……INTRODUCTION NIGERIAN AGRICULTURAL PRODUCE ECOLOGICAL ZONES/SPECIALISATION

  7. ….INTRODUCTION NIGERIAN AGRICULTURAL PRODUCE ECOLOGICAL ZONES/SPECIALISATION

  8. ……INTRODUCTION NIGERIAN AGRICULTURAL PRODUCE ECOLOGICAL ZONES/SPECIALISATION

  9. ………INTRODUCTION • Nigerian agricultural sector is open to • private sector participation. • Entire Agricultural Value Chain involved PRODUCTION STORAGE PROCESSING MARKETING

  10. OPPORTUNITIES • 1. Production • Large Scale commercial Production • Input Service Delivery • Fertilizer Manufacturing • 2. Storage • Community Warehousing • Conditioning Centres • 3. Processing • Cottage Industries • Agro industrial Parks • 4. Marketing • Specialized market Development • Packaging & Branding • Integrated Retail outlets • 5.Research • 6. Biofuel Development

  11. OPPORTUNITIES – ProductionLARGE SCALE COMMERCIAL FARMING • Crops: • Cassava, Millet, Sorghum, Wheat, Maize, Sugar cane, Rice, Cowpeas, Soya beans, Tomato, Cotton, Cocoa, Oil Palm • Livestock (Cattle, Fish, Pig, Poultry, Sheep ) • Drivers • Demarcation of appropriate stock routes • Development of grazing with essential infrastructure • Provision of animal health facilities and livestock extension services • Fisheries ( Marine, Inland, Aquaculture): • Nigeria imports about 700,000 metric tonnes annually • Significant biodiversity • Abundant natural and human resources

  12. …..OPPORTUNITIES – ProductionLARGE SCALE COMMERCIAL FARMING Cassava • Nigeria - largest producer in the world • Food and industrial sectors growing rapidly. • Africa’s domestic markets and intra sub Saharan Africa markets $8.9 billion/yr • Large domestic import substitution market • Domestic markets very lucrative, returns 50% -100% more with alternative global markets. Production Share in the World (million ton, 2004)

  13. …….OPPORTUNITIES – Production LARGE SCALE COMMERCIAL FARMING • Wheat, Corn (Maize): • Growing world demand • Nigeria Imports about 3million Metric tons of Wheat annually

  14. ……OPPORTUNITIES – Production LARGE SCALE COMMERCIAL FARMING • Rice • Nigeria imports over 1.5 million metric tons per annum • World rice reserves, estimated at 80.6 million tonnes in 2005-06 (at the lowest level since 1983-84), • Global Consumption outstrips production • Rice consumption in West Africa doubling every 9 years,

  15. ……OPPORTUNITIES – Production LARGE SCALE COMMERCIAL FARMING • Sorghum • Increasing Global demand driven by: • Ethanol production • Food Grade alcohol production • Animal Feed industry • Sugar cane • Nigeria imports about 1.5 million metric tons per annum • Growing utilisation for Ethanol • About 800,000 hectare of landavailable for sugar cane cultivation

  16. …..OPPORTUNITIES – ProductionINPUT SERVICE DELIVERY • Provision of Tractors and other implements • Only 30,000 tractors available in the country • Planned Increase of at least by 10,000 tractors per annum • Establishment and Operation of 774 Agro service centres- Fertilizers, seed, chemicals etc • Extension Services- Farmer education • Target extension staff of 1:350 against current 1:10,000 • Drivers: • Complete deregulation of service delivery schemes • Efficient subsidy management

  17. ……..OPPORTUNITIES - ProductionFertilizer Manufacturing • Nigeria Imports over 700,000 metric tons annually • Current localproduction insignificant • Domestic demand of about 3.4million metric tons • Availability of vast gas reserves

  18. Opportunities - Storage • Management of over 100 community ware houses • Establishment and management of about 7 conditioning centres • Completion & management of 25 new silos • Provision of Special Purpose Transport Vans • Provision of electricity & IPP opportunities

  19. Opportunities - Processing Establishment and management of 7 Agro-industrial parks for:Crops, Livestock, Fish;Livestock & Dairy;Tomato, Cotton & Vegetable; Fish, Shrimps & Rice;Cocoa, Cassava;Rice • Drivers: • Inadequate capacity to process available paddy rice • Provision of N10.00 billion rice processing loan facility • High post harvest loses • High global demand for processed products eg tomato • Over 70% of dairy need imported • Unsatisfied demand for fish & low domestic production

  20. Opportunities – Market Development • Specialized market Development • Management of specialized markets for grains and other commodities • Establishment of Export markets • Packaging & Branding • Establishment of packaging plants • Integrated Retail outlets • Establishment and management of retail outlets such as large scale supermarkets.

  21. Opportunities – Research & Development • Development of high yielding, disease-resistant crop seeds as well as high producing and fast growing brood stock. • Biotechnology Crop Yield in Nigeria versus Potential Yield(mt) • Drivers • Current average yield of most crops below potentials • Very limited biotechnology exposure Source: FAO statistics; 2006

  22. Opportunities – Biofuel Development • Nigeria set to maximize the potentials of cassava and jatropha as feedstock for the growing international biofuel market. • Cassava (for ethanol) • Drivers • Nigeria currently produces about 50million mt of cassava/annum • Estimated ethanol domestic demand of 4b litres/annum • Growing global market • Guaranteed 10yrs. Off-take Contract from NNPC • 10 years income tax holiday with a possible extension for five years • Exemption from all import & customs Duty in respect to importation of all equipments inputs, chemicals for use in Bio-ethanol production • Withholding & capital gains Tax exemption on dividends, foreign loans and for services produced by foreigners to the Bio fuel firms

  23. ………Opportunities – Biofuel Development • Jatropha ( for biodiesel ) • Drivers • Over 3 million hectares of degraded land • available for immediate use • Increased global demand for edible oil seeds • Global food crisis • Withholding & capital gains Tax exemption • on dividends, foreign loans and for services • rendered by foreigners to the Bio fuel • company. World Supply and Demand for Oilseeds

  24. Some Incentives for Private Sector Investment in Agriculture • Possible Public-Private partnership arrangement • Zero tariff rate on importation of agricultural machinery & chemicals; • Duty free importation on spare parts of processing machinery; • Tax free dividends for a period of 5 years • Tax free agricultural loans with moratorium period of over 18 months and repayment period of not more than 7 years. • Bank guarantees through the Agricultural Credit Guarantee • Risk cover by Nigerian Agricultural Insurance Corporation • Provision of a legal framework for the protection of foreign investment in Nigeria economy. • Ban on the importation of some agricultural products e.g. vegetable, oil, cassava, poultry, etc.

  25. Conclusion Nigeria: with abundant human and natural resources, diversified agro-ecological condition and private sector driven agricultural development policies, is an emerging agribusiness economy, with viable opportunities in all facets of the agricultural value Chain.

  26. CONTACTS Honorable Minister Federal Ministry of Agriculture & Rural Development FCDA Compound, Area 11 Garki – Abuja, Nigeria Tel: +234-9-314-1931 Email: saingawa@yahoo.com (&) nfrahq@nfra.org

  27. Thank You & welcome to Agribusiness in Nigeria

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