Agricultural Business in Nigeria: A Complete Overview
by Counseal Team
Updated November 26, 2023
Agriculture is one lucrative sector of the economy that a diaspora investor is certain to get returns on investment. Agricultural business in Nigeria, although once on the brink of collapse and neglect, is growing into a lucrative sector because of government investments and incentives granted to this sector. The incentives granted to this sector are aimed at encouraging local, diaspora and foreign investments. This article provides a guide on the most lucrative agricultural business in Nigeria that a diaspora can invest in.
Agricultural Business a Diaspora can Invest In.
The key to investing in agricultural business in Nigeria is knowing the most lucrative to invest in. The following are the most lucrative agricultural businesses in Nigeria to invest in:
Maize/ Corn Farming:
Investing in maize farming is one agriculture business in Nigeria that is quite lucrative. With irrigation farming, maize is planted at any time of the year and can be harvested within 2-3 months after planting.
Because of its popularity and demand for food consumption, starch, and beer making, maize farming on a commercial level is highly profitable. Intending diaspora investors can obtain low interest agricultural loans from CBN to invest in this business. These low-interest loans are offered by the government to encourage investments in the agricultural sector. The CBN also offers access to foreign exchange to investors intending to export maize grain outside the country.
Investment in maize farming can be done by investing in a maize farm or via an agricultural investment platform. Returns on investment in maize farming are projected at a minimum of 50%.
Investments in this agriculture business in Nigeria has become very popular among diasporan investors due to its lucrativeness. Rice production in Nigeria has boomed due to government policy and investments to encourage investment in this sector. Rice production grew from 5.8 million metric tonnes in 2015 to almost 9-million metric tonnes in 2021. This was because of the government ban on the importation of rice.
Further, because of this ban, Nigeria became the largest producer of rice in Africa, hence making rice farming on a commercial level very profitable. An investment in rice farming takes 12 months to harvest and if done properly guarantees up to 25% return on investment. Investment in rice farming can be done by investing in a commercial-scale rice farm or via an agricultural investment platform.
Poultry farming is the rearing of domestic birds such as chickens, geese, ducks, guinea fowls, turkeys, etc. for their meat and eggs. Investing in this agriculture business in Nigeria is highly lucrative due to the high consumption of poultry meat and eggs. Recent statistics show that current production only meets 30% demand of eggs and meat in Nigeria for an industry valued at NGN 1.6 trillion.
To encourage investment in this sector, the government has banned the importation of frozen poultry products and the CBN offers low-interest loans to investors. A diasporan looking for a short-term investment can invest in this agricultural business and get a minimum of 30% returns on investment within 3-6 months.
Fish farming in Nigeria has evolved from traditional methods of harvesting fish to rearing fish in a water tank on land. World Bank statistics shows that 3.4 million metric tonnes of fish are consumed in Nigeria and current local production meets only 40% of consumption demand. Because of the gap in meeting local consumption demand, diasporas are encouraged to invest in this agriculture business in Nigeria. To encourage investments, the government banned the importation of fish in Nigeria and offer low interest loans to intending investors.
Further, by-products of fish such as dry fish, fish oil, liver oil, etc are steadily developing an international market. Access to foreign exchange is also available to investors intending to export these by-products outside Nigeria.
Investing in fish farming includes investing in a commercial fish farm or via an agriculture investment platform or renting farmlands for fish farms for a fee based on the profit made. The return on investment is projected at a minimum of 22% returns on investment depending on the money invested.
Snail farming is a low capital-intensive agriculture business in Nigeria, valued at $12 billion dollars. Anyone including a diasporan investor can invest in this agricultural business. Its lucrativeness can be attributed to the 100% guarantee on investment returns. Snail meat is considered a rich diet in Nigeria and when harvested and sold during the dry season can make large profits. As snail meat is scarce during the dry season. Most state governments offer capital to diaspora investors intending to invest in this agriculture business. Investment in snail farming can be done by partnering with a snail farmer to establish a snail farm.
This agriculture business in Nigeria has a lot of untapped potential. Sugarcane farming on a commercial level is very profitable as there is a domestic market for sugar cane and its fibre by sugar factories, biofuel, paper, beer, renewable energy and building companies. To reduce the importation of sugarcane and to encourage investment in sugar cane farming, a 5 years tax holiday is granted to sugar cane farmers.
Further, low-interest loans are offered to sugarcane farmers and investors by CBN as well as educating them on the best way of cultivating sugarcane to boost production.
The return on investment is projected at a minimum of 25% depending on the money invested and the period of investment. Investment can be done by investing in a sugarcane commercial farm or via an agricultural platform.
Palm Oil Farming:
Investments in this agriculture business in Nigeria is popular among diasporan investors. This is because of its lucrativeness from profits made in exporting palm kernel oil which is produced from palm oil farming to international markets. Further, local consumption of palm kernel oil is very high as it is used in the production of vegetable oil, soaps, detergents, cosmetics, etc.
To encourage investments in this agricultural business, tax holidays of a minimum of two years are granted to palm oil farmers. Additionally, low-interest rate agricultural loans and access to foreign exchange are granted to diaspora investors intending to export palm kernel oil.
Investing in palm oil farming is a long-term investment as a palm tree has a life expectancy of 25-50 years and can produce palm kernel oil throughout that life span. A diaspora investor can invest in a commercial palm tree plantation or partner with a local palm oil farmer. Returns on investment is projected at a minimum of 40% depending on the money and the time length of the investment.
Cassava farming is known for its low input and high output nature. It is widely practiced in Nigeria as cassava is one of the widely consumed staple foods in Nigeria. Cassava farming on a commercial level is very profitable due to Nigeria’s large domestic cassava market.
Further, Nigeria’s international market for exporting processed cassava products has grown steadily, leaving room for more investments to meet both local and international markets’ consumption demand.
Diasporan investors are encouraged to invest in this agriculture business in Nigeria to meet both local and international consumption demand. To encourage investments, state and federal governments offer low-interest loans to investors and easy access to foreign exchange for cassava farmers intending to export cassava. Additionally, low import duties are levied on the importation of raw materials used in making local fertiliser which boosts cassava production.
Returns on investment is projected at a minimum of 22% depending on the period and money invested. Investments can be done via agricultural investment platforms or by investing in cassava commercial farms.
This is another lucrative agriculture business in Nigeria. Its lucrativeness is because of local and international demand for plantain and its processed products such as starch. Plantain farming done on a commercial level can be used to meet both local and international demand. To encourage investment in this sector, the government provides access to low-interest agricultural loans and tax incentives to investors and farmers alike. Additionally, low import duties on raw materials used in local production of fertilizer are used to boost plantain production.
A diasporan investor can invest by investing in a commercial plantain plantation or via an agricultural investment platform or partner with a plantain farmer to build a plantain plantation. The minimum projected return on investment is 20% depending on the money and the length of the investment.
Pig Farming is also known as piggery. It is the rearing of pigs for its meats and its products. This agriculture business in Nigeria is very lucrative due to the quick and huge yields within a short period of time. Additionally, there is a domestic market demand for pig meat and lard which is used in the production of insecticides, plastics, oil polishes, rubber, cosmetics, etc.
Pig farming is capital intensive, therefore little investments are done in this business despite its lucrativeness. To encourage investments in this business, the government offers incentives for investors interested in pig farming. These incentives include low interests agricultural loans for purchasing farmlands, feed, and equipment for rearing pigs. The minimum projected return on investment is 40% depending on the amount of money invested. Investment in this business can be done by investing in a commercial pig farm or via an agricultural investment platform.
As a diaspora seeking to invest in any of the listed agricultural businesses in Nigeria is recession-proof. This is because Nigerians would still eat even during an economic recession. Additionally, population growth in Nigeria is inevitable. Hence, the increase in demand of more agricultural products to sustain the needs of the ever-growing Nigerian economy.
However, it is important to point out that this article is only intended to serve as a guide and not to replace proper legal advice on investing in agriculture business in Nigeria.
If you have further questions about investing in any agriculture business in Nigeria, book a free session with an expert.