There are many profitable reasons to invest in the Nigerian agricultural sector because Nigeria is a country that is endowed with large hectares of arable land, which makes agriculture a vital sector of the economy with high potential for employment creation, food security, and poverty reduction. The agricultural industry was primarily dominated by subsistence farming, but with the introduction of improved seedlings, modern farming methods, and better weather forecasting, agricultural yields have continued to be on the increase. These improvements have been driven by government policies aimed at encouraging more commercial and mechanized farming.
The agricultural sector contributes 25% of Nigeria’s Gross Domestic Product (GDP) and accounts for 48% of the labor force. The sector’s growth rate over the last five years averaged 4%. Crop production dominates the sector, accounting for 22.6% of GDP alongside livestock (1.7%), fisheries (0.5%) and forestry (0.3%).
The agricultural sector is open to private participation, and investment opportunities abound across the various value chains. The broad categorization of these includes:
- Mechanized crop production such as rice, maize, millet, cassava, sugar cane, tomato, and cash crops such as cocoa, palm kernel, rubber, among others.
- Food processing and preservation across the value chains of the sector
- Beef processing and packaging
- Fruit juice/canned fruits
- Beverages and confectionery
- Cash crop processing – cocoa, palm kernel, rubber, among others
- Exploitation of timber and wood processing activities
- Livestock cultivation – dairy and aquaculture (fisheries) development
- Horticulture development.
- Agricultural input supplies and machinery.
- Water resources development, especially for irrigation and flood control infrastructure.
- Commodity trading and transportation.
- Development and fabrication of appropriate small scale mechanized technologies for on-farming processing and secondary processing of agricultural produce.
- Development of private irrigation facilities.
- Production of improved seeds and agro-chemicals.
- Production of veterinary drug, vaccine, chemical, feeds, and feeds ingredients.
- Market Research.
The Need for Food and Agricultural Materials:
Food is one of the basic needs of humanity as they cannot do without it. Agriculture is the primary source of food, creates an opportunity for a good businessman/woman to make wealth by investing in it. Also, the global population is increasing daily, likewise food consumption. However, there is no equilibrium between food consumption and food production, thus resulting in food scarcity. To save the world from future food disasters, there must be a massive inflow of investors into the agricultural sector, thereby creating a source of income for smart investors who will invest in the industry.
Low Number of Investors:
The sector presently is characterized by small number of investors, which is an excellent opportunity to make wealth and also feed the nation as there will be low competition. It also creates wealth by selling agricultural products, creating new agriculture technology innovations as well as manufacturing and maintenance of machines and implements.
Source of Employment and Employer of Labor:
Agriculture over the years has provided jobs for many people, mostly youths, still providing employment and will continue to produce work. The job opportunities are numerous, ranging from farm attendants to farm laborers, and so on. It can also make you an employer of labor.
Focus on Other Economies:
The government of many countries, especially Nigeria, has neglected agriculture for other sectors (e.g., Oil & Gas sector), which have led to a massive increase in the import of agricultural commodities. So investing in agriculture can also provide an opportunity for export trading of the various agricultural products from the local farmers.
Poverty Reduction and Eradication:
It is eleven times more effective to alleviate poverty when you invest in the agricultural sector than in any industry. So if you are someone who has the well being of the masses in your mind, agriculture is the best option.
Land is a factor of production which appreciates faster over the years. On average, farmland value has a long term appreciation rate of about 5% to 6%. Also, most of the agricultural lands (arable land) are in rural areas where farm lands are cheaper compared to urban areas.
The agricultural sector is one sector to look out for where investment opportunities are concerned. Want to amass more wealth to secure the future of your generation? Sure, you will consider investing in this growing sector.
Farmcenta is an Agri-tech startup that seeks to improve rural farming by addressing farmer’s critical farming needs such as mechanized tools, high yield seeds, training on climate smart agriculture techniques and off-take harvest to increase food production in Nigeria and Africa. Our mission is to provide an opportunity for everyone to support the SDG 2: Zero Hunger. Learn more by visiting our website at www.farmcenta.com or contact us via Instagram, Facebook, Twitter, or LinkedIn, or via email at firstname.lastname@example.org.