This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 11/29/2018

A. Agricultural Machinery Sector


Overview
Unit:  USD thousands

 2015201620172018
Estimated
Total Market Size72,00037,50060,00080,000
Total Local Production5,0007,50010,00020,000
Total Exports0000
Total Imports67,00030,00050,00060,000
Imports from the U.S.11,1814,75710,08712,000
Exchange Rate:   1 USD197197359359
Total Market Size = (Total Local Production + Total Imports) – (Total Exports)
Data Sources: 
Total Local Production: Industry contacts
Total Exports: Industry contacts
Total Imports: Industry contacts
Imports from U.S.:   U.S. Census Bureau.

In Nigeria, there are over 30 million hectares of farmland under cultivation season to season, falling substantially short of the estimated 78.5 million hectares of land that is required for farming to feed Nigeria’s growing population. The country’s agricultural sector is dominated by smallholder farmers who work an average of 4–5 acres each, under rain-fed conditions.  Most of them lack knowledge of modern practices, have insufficient capital and own little or no equipment of their own.  As a result, much of the farm machinery, seeds and chemicals they require are purchased and distributed to them by the government under various agricultural assistance/subsidy programs. One of such subsidy packages is the e-Wallet system introduced in 2014 under the Agricultural Transformation Agenda (ATA) through which subsidized electronic vouchers for inputs were delivered directly to the farmers' mobile phones and then the vouchers were used as cash to purchase the inputs directly from agro-dealers nearest to them. This initiative has proven to be both effective and efficient in providing poor farmers with much needed resources and eliminating corruption in the subsidy program.  There are about ten relatively large commercial scale farms in Nigeria deploying some form of mechanized processes.  These and a few construction companies can purchase tractors for agricultural and non-agricultural purposes.

The Nigerian economy took a hit from declining oil revenues in 2015, forcing the government to seek economic diversification.  It has set to pursue agricultural development as one of its key goals to help address the country’s dependence on food imports totaling nearly 11 billion dollars annually. It has also engaged in a campaign to redirect focus from oil to agriculture, manufacturing and solid minerals development. In this regard, the government has rolled out five agricultural development initiatives. They include, the Anchor Borrowers Program (ABP), the Presidential Fertilizer Initiative (PFI), the Youth Lab, the Presidential Economic Diversification Initiative (PEDI) and the Food Security Council. The ABP for example, was created by the Central Bank of Nigeria and works in partnership with state governments and several private sector groups to provide farm inputs in kind and cash to small holder farmers to boost production of agricultural commodities. At harvest, the farmers supply their produce to the agro-processors (anchor) which pays the cash equivalent to the farmers’ account. According to government reports, under the ABP initiative, a cumulative amount of over 150 million dollars has been disbursed to more than 250,000 small farmers who cultivated almost 300,000 hectares of farmland for rice, wheat, maize, cotton, soybeans, and cassava. This growing trend of agricultural activity is expected to continue, thus creating demand for agricultural inputs.

U.S. agricultural equipment manufacturers and suppliers are beginning to actively play in the Nigerian market. For example, in May 2018, John Deere reached a deal with Nigeria’s Ministry of Agriculture to supply 10,000 tractors while Hello Tractor will manage this large fleet with its telematics device and provide technology advice from its Mustard IT support team. AGCO, which is increasing its investment in the African continent, is looking to open an office in Nigeria and partner with some Nigerian Universities to provide manpower/technical training and support to undergraduates in agricultural machinery handling and maintenance. Generally, multinational food processing companies are embracing backward integration strategies, by either establishing their own commercial farms or empowering small farmers through out-grower programs.  Setting up agribusiness in Nigeria can be challenging due to land ownership issues, lack of infrastructure including water irrigation and roads, and security and corruption issues.  But the benefits of making an agricultural investment outweighs the risks.

Leading Sub-Sectors
Livestock production has continued to record increased growth because of private sector investments, especially in poultry and fish farming.  These segments have high market demand, and enjoy faster turnaround time, and as such appear to be growing at a faster pace than crop production. Opportunities exist for fish feed, poultry feed milling machinery, incubators, extruders, feed additives, livestock drugs and vaccines.

Post-harvest losses, which the Nigerian Government currently estimates to be about 60%, remains a major setback to food availability.  Therefore, farms, processing companies and food vendors will seek preservation technologies.  Note, however, that machines used in Nigeria are generally very basic.  High-tech systems are not well received due to the country’s low level of agricultural advancement and power supply problems.

Opportunities
Investment opportunities exist in all areas of the Nigerian agricultural value chain. Governments at all levels (federal, state and local) have opened their doors to foreign direct investments promising to provide attractive incentives and support. There is significant demand for new and used agricultural tractors (55-75HP), agricultural chemicals (fertilizers, herbicides and pesticides), irrigation systems; food (grain and fruit) processing and storage systems. The government’s renewed campaign to boost agricultural production has led to an uptick in agri-investment. New farms are springing up but are challenged by a lack commercial farming expertise. Providing farm development services to these new investors might be a good way of selling a broad range of farm machinery and inputs.

Web Resources
Federal Ministry of Agriculture and Rural Development
NIRSAL
Nigerian Agricultural Statistics
 
Local Trade Shows
AgrikExpo West Africa
September 18-20, 2018

International Conference Center
Abuja, Nigeria
Agra Innovate West Africa
November 27-28, 2018
Landmark Center
Lagos, Nigeria

A. Agriculture (Food Crop) Sector

Overview
Nigeria is Africa’s largest economy, a major oil producer with population of over 190 million people, with an average growth rate of about 3 percent per year.  The country’s Gross Domestic Product (GDP) is estimated at $500 billion. Earnings from crude oil and gas exports constitute   approximately 80 percent of the country’s total revenue. 
Nigeria is a net importer of food and major agricultural products. To stimulate the country’s agricultural production, the country launched its current Agricultural Promotion Policy (APP); initiated the Anchor Borrower Scheme, and adopted some protectionist trade measures. However, Nigeria remains heavily dependent on oil and gas exports, which contribute more than 80 percent of GON revenue and less than 20 percent to its GDP. Global oil prices that began to fall in mid-2014 caused the country’s economy to slump into recession in 2016 that ended in the last quarter of 2017. 
Nigeria’s agriculture is made up of four sub-activities: 1) Crop Production, Livestock, Forest and Fishing. Major agricultural commodities produced in the country are cocoa, peanuts, sesame, kola nuts, palm oil, corn, rice, sorghum, millet, cassava (tapioca), yams, rubber, cattle, fish and timber.  

U.S. Agricultural Trade Summary
Summary of formal agricultural trade with Nigeria:
CY 2017 U.S. Exports: $570 million (approximately 30 percent increase over 2016). Wheat accounts for 65 percent of the total U.S. food and agricultural products exports. Other significant U.S. exports to Nigeria include corn, intermediate food products (especially animal fats), consumer-oriented food products (mostly condiments and sauces, processed vegetables, wine, prepared food, non-beverage ethanol, etc.) and fish products.

 CY 2017 U.S. Imports: $70 million (about a 57 percent increase over 2016).  Major U.S. imports are cocoa beans, feeds and fodders, cashew/tree nuts, spices as well as seafood products.   Nigeria, as an AGOA beneficiary, still has not realized a major benefit from the trade preference in food and agricultural products due largely to the country’s inefficient food safety system that in most part may not meet internationally agreed requirements for food production for exports and for local consumption. 
 
Products with Most Export Potentials

Wheat
Unit: USD thousands
  
2016
2017 
2018
(Projected)
 
2019
(Projected)
Total Market Size 1,213,0001,500,0001,650,0001,700,000
Total Local Production 13,00015,50016,00016,300
Total Exports 0000
Total Imports 1,200,0001,484,5001,634,0001,683,700
Imports from the U.S.300,000400,000530,000540,000
Exchange Rate: 1 USD450400360365
Total Market Size = (Total Local Production + Total Imports) – (Total Exports)
Data Sources: BICO reports
Nigeria’s Wheat Millers Association; Master Bakers’ Association, Federal Ministry of Agriculture, Nigerian Customs Service, etc. 
Nigeria’s wheat consumption is mostly filled by local production augmented by imports valued at about $1.5 billion in 2017 and $1.7 billion in 2018. With the country’s wheat milling capacity at about 8 million tons, Nigeria remains the largest U.S. wheat importer in Africa and the fourth in the world. Bread, semolina, pasta and other wheat flour-based products are staples in Nigeria and the demand for the products has continued to increase. Currently, the shares of wheat flour for bread, semolina, pasta and others, are estimated at 60 percent, 20 percent,10 percent, and 10 percent, respectively. 

Generally, consumers’ income has remained low while wheat products such as bread, pasta, etc. are readily available at affordable prices in the more populated urban areas.  Local wheat production remained inadequate and domestic supplies of substitute staples within Nigeria and neighboring countries have not kept pace with demand. Nigeria’s economy has been improving since the last quarter of 2017. U.S. wheat market share in Nigeria over the last 5 years decreased from approximately 90 percent in 2012 to about a 45 percent in 2017, mainly due to steep competition from wheat exports from the Black Sea region—especially Russia.

Leading Sub-Sectors
Wheat Flour
Wheat flour utilized for bread, noodles, pasta, biscuits (cookies), semolina, etc.

Opportunities
Nigeria’s population is estimated at 190 million people. Local wheat production is insufficient to meet local demands while also relatively expensive. Nigeria’s wheat milling capacity reached about 8 million tons in 2012, while it has continued to increase. Capacity utilization was estimated at 40 percent in 2017. Consumers continue to request higher quality wheat flour-based products. Local wheat importers continue to consider U.S. wheat suppliers as consistent in product delivery and reliable suppliers—they indicate they will resume purchasing U.S. wheat when the prices become competitive, etc.

Web Resources
Regional Agricultural Affairs Office
U.S. Department of Agriculture (USDA)
Office of Agricultural Affairs
U.S. Consulate, Lagos-Nigeria
Email:  aglagos@usda.gov
Website: Foreign Agricultural Service
Global Agriculture Information Network
GAIN Report for Nigeria Report Details
 
 
Rice (Parboiled Milled): 
                                                                        Unit: USD thousands
 20162017
 
2018
(Projected)
2019
(Projected)
Total Market Size 4,350,0005,000,0005,500,0005,100,000
Total Local Production 2,400,0002,460,0002,480,000           2,400,000
Total Exports 0000
Total Imports 1,950,0002,540,0003,020,0002,700,000
Imports from the U.S.2,0003,0006,0007,000
Exchange Rate: 1 USD450400360365
Total Market Size = (Total Local Production + Total Imports) – (Total Exports)
Data Sources: Nigeria’s major rice importers, Rice Farmers Association of Nigeria (RIFAN)
National Bureau of Statistics; Federal Ministry of Agriculture; Nigerian Customs Service, etc.), Open Market Traders;  

Nigeria is one of the world’s largest markets for parboiled rice—consuming on average $4.5 billion worth of parboiled rice per year. Nigeria’s recovering economy is also positive for increased consumption of imported rice as domestic production remains dominated by small/cottage mills operating outdated mills and applying mostly traditional methods. Despite the GON’s proclamation for Nigeria to be self-sufficient in rice production by 2018, the large-scale integrated rice mills have continued to indicate the high-cost of production constrain their efforts to attain this goal.

About 65 percent of imported rice is from Thailand, India (20 percent), while the remainder is filled by supplies from Brazil, China and others (15 percent). More than 95 percent of the imported rice enters the market informally through Nigeria’s numerous cross-border smuggling channels. Usually, the shipments are destined to seaports located in the neighboring countries and transported to Nigerian markets through land border routes. The GON initiated forex measures that imposed restrictions on access to foreign exchange for rice imports during the last quarter of 2016. Additionally, the GON debarred any landing of foreign parboiled rice through any of Nigeria’s ports and land borders even when such rice is purchased with funds from legitimate parallel foreign exchange market. As a result, most rice consumed in Nigeria enters the market through informal cross-border trade.

Leading Sub-Sectors
Polished and Milled rice (Exclusively Parboiled)
The following are opportunities for increased market in Nigeria:  Nigeria depends on approximately 3 million tons of imported parboiled rice to meet half of its rice demand; increasing population/urbanization; higher cost of local paddy production and processing, rising cost of domestic staple, and others. 

Nigeria’s domestic rice production target is also far from reality due mainly to lack of infrastructure, poor policy implementation, as well as the increasing state of insecurity caused by Boko Haram (BH) and rural violence in many major rice-producing regions of northern Nigeria. These have dislodged many rice farmers and confined over 3 million people in the rice-producing areas to taking refuge in camps where they also depend on mostly imported rice donations.

Web Resources
Regional Agricultural Affairs Office
U.S. Department of Agriculture (USDA)
Office of Agricultural Affairs, U.S. Consulate, Lagos-Nigeria
Email:  aglagos@usda.gov
Website: Foreign Agricultural Service
Report Details:
Nigeria Annual Grain and Feed Report

Dairy
Unit: USD thousands
 2016
 
2017
 
2018
(Projected)
2019
(Projected)
Total Market Size 880,000       1,500,0001,600,0001,650,000
Total Local Production  160,000200,000 220,000  250,000
Total Exports  0000
Total Imports  720,0001,300,0001,380,0001,400,000
Imports from the U.S.10,50012,00015,000 20,000
Exchange Rate: 1 USD450400360365
Total Market Size = (Total Local Production + Total Imports) – (Total Exports)
Data Sources: Milk Powder Importers, AFBTE, supermarket operators’ association (NASON), Wholesale Distributors, BICO reports, etc.);  

Nigeria’s dairy market in 2017 was estimated at $1.5 billion with over 85 percent met through imports. The country’s dairy market potential is estimated at approximately 2 million tons worth about $6.5 billion. Beginning in 2016, Nigeria began to recover from the economic recession that has hampered economic growth. Analysts project dairy consumption will grow to $1.6 billion in 2018, a 7-percent increase from the previous year. 

Local dairy processors rely on combining and reconstituting milk powder imported mostly from the EU (Netherlands, Denmark, etc.).  The reconstituted milk is mostly packaged and sold as powdered, evaporated and condensed milk; packaged in metal cans and sachets of different weights. Ice cream, chocolate milk, yoghurt, and long shelf life milk are produced locally from the reconstituted imported milk powder.  Infant formula, cheese, butter, as well as ice cream, are mostly imported. Imported skimmed milk powder is used as an input in producing food drinks, biscuits, etc.  Demands for these products have continued to grow, while consumption of flavored milk drinks (mostly consumed by children of school age) are boosting demand.  

Growing population, increasing urbanization, and rising per capita income over the last 2-3 decades have resulted in increased demand for dairy-based products in Nigeria. Manufacturers have continued to be more innovative in producing and packaging of varieties of products. U.S. export of dairy products to Nigeria has risen steadily over last 5 years.
 Eighty-five percent of domestic dairy operations are done by indigenous subsistence and nomadic pastoralists, the remaining is done by medium and large-scale farmers. However, domestic production remains insufficient due to increasing production/processing costs, as well as well as failure to incorporate advanced technologies. Domestic milk production is also grossly underdeveloped. On average, a cow in Nigeria can only produce an average of one kilogram of milk per day. The GON, under its Agricultural Promotion Policy (APP), plans to double local milk production over the next 3-4 years by improving breeding system and optimizing processes, yield and product quality. However, analysts indicate it will take huge investment in appropriate cow breeds, ranching infrastructure, technology, etc. for the country to attain the proposed target.
WAMCO), an affiliate of Friesland Campina, is Nigeria’s leading milk manufacturer of the ‘Peak’ brand, with more than 60 percent market share of the household milk consumption. Promasido (South Africa), Nestle, PZ-Nutricima, CHI, FAN, etc., are other major players in Nigeria’s dairy sector. Commercial Dairy Ranchers Association of Nigeria (CODARAN), Arla Foods as well as L&Z Integrated Farms are major indigenous stakeholders in Nigeria’s dairy sector.

Leading Sub-Sectors
Powdered, evaporated and condensed milk; packaged in metal cans and sachets of different weights; ice cream, chocolate milk, yoghurt, and long-life milk; Reconstituted imported milk powder; infant formula; cheese; butter; skimmed milk powder; flavored milk drinks; etc.

Opportunities
Nigeria’s dairy processors rely on combining and reconstituting imported milk. Nigerian dairy market is expected to continue to grow at more than 7 percent per year; growing population; increasing urbanization; rising demand for dairy-based products; are the major drivers.

Web Resources
Regional Agricultural Affairs Office
U.S. Department of Agriculture (USDA)
Office of Agricultural Affairs
U.S. Consulate, Lagos-Nigeria
Email:  aglagos@usda.gov
Websites:
Foreign Agricultural Service
Global Agriculture Information Network
 
Seafood
                                                                  Unit: USD thousands    
 201620172018
(Projected)
2019
(Projected)
Total Market Size910,0001,330,000  1,487,000  1,648,500
Total Local Production400,000450,000     470,000     500,000
Total Exports10,00030,000       7,000        1,500
Total Imports520,000910,000 1,024,000  1,150,000
Imports from the U.S.30015,000       18,000       20,000
Exchange Rate: 1 USD450400360           365
Total Market Size = (Total Local Production + Total Imports) – (Total Exports)
Data Sources: Association of Fish Suppliers of Nigeria (AFISUN), Frozen Fish Wholesale Distributors, Catfish Farmers Association of Nigeria (CAFAN), BICO reports, Federal Fisheries Department—Nigeria, etc.,

Frozen seafood is the cheapest form of animal protein in Nigeria and consumption has been increasing. The country is a potential market for approximately 2.5 million MT of fish valued at about $3 billion. Atlantic mackerel, horse mackerel, herring and croakers are the major species in the country.  

Domestic catches and aquaculture production remain underdeveloped due mainly to high input cost. The country relies on large volumes of imports to meet local demand. The Netherlands, China, Chile, etc., are the major suppliers of frozen seafood to Nigeria. U.S. fish exports to Nigeria were insignificant in 2016 compared to $14 million in 2015.  Scarcity of foreign exchange to pay for fish imports and the recession in 2016 were the causes of the significant decrease in exports that year. Nigeria’s currency devaluation also lowered consumer purchasing power significantly and contracted the market by more than 30 percent in 2016.

 Nigeria began the implementation of an import quota regime for fish during the first quarter of 2014. The aim was to stimulate the country to become self-sufficient in fish production over the next four years (by 2018) through a 25-percent annual fish import cut. Major fish species consumed in the country listed as free for entry within set quotas.  However, catfish and tilapia—the most farmed species in Nigeria—are under import prohibition in-order to protect the local aquaculture sector. 

The GON sources indicated introduced quota system was to sanitize the country’s fish import trade from identified malpractices in the marketplace.  However, industry sources indicated that the implementation of fish import quotas has deviated from the original purpose: to promoting financial interests of individuals with privilege access to officials. At the moment Nigeria’s fishery and aquaculture sector do not show any sign of being able to attain self-sufficiency by 2018.
Nigeria has been eligible to export Siluriformes fish and fish products to the United States, but the country failed to provide sufficient equivalence documentation within the required timeframe. Consequently, shipments of Siluriformes fish and fish products from Nigeria that certified on or after March 1, 2018, are currently not eligible to enter the United States.

Leading Sub-Sectors
Atlantic Mackerel; Horse Mackerel; Herring; Blue Whiting; Croaker; etc. Nigeria was exporting reasonable volume of smoked catfish and other Siluriformes fish and fish products prior to the March 1, 2018 incidence. 
Opportunities

Frozen seafood is the cheapest form of animal protein in Nigeria; Consumption of frozen seafood has been increasing; Nigeria remains a potential market for approximately 2.5 million MT of fish valued about $3 billion; Under-developed domestic catches and aquaculture production promotes reliance on large volumes of imports to meet local demand.

Web Resources
Regional Agricultural Affairs Office
U.S. Department of Agriculture (USDA)
Office of Agricultural Affairs
U.S. Consulate, Lagos-Nigeria
Email:  aglagos@usda.gov

Websites:
Foreign Agricultural Service
Global Agricultural Information Network
 
Wine:
                                                   Unit: USD thousands
 2016
 
2017
 
2018
(Projected)
2019
(Projected)
Total Market Size320,000385,000490,000520,000
Total Local Production30,00040,00070,000100,000
Total Exports0000
Total Imports290,000345,000420,000420,000
Imports from the U.S.10,00017,00030,00040,000
Exchange Rate: 1 USD450400360365

Total Market Size = (Total Local Production + Total Imports) – (Total Exports)
Data Sources: Wine importers, BICO reports, Industry (AFBTE), Wine Distributors, Supermarket Owners and Operators (NASON), etc.

 With a population of more than 190 million people, Nigeria provides a large potential market for alcoholic beverages valued about $6 billion. In Nigeria, alcoholic beverages are considered a type of food and alcohol consumption is mostly a social activity. Over the last 2 decades, average wine consumption per capita jumped from 0.05 liters to about 18 liters in 2017. The consumption growth has also been the result of aggressive marketing activities by leading global and local players. The still wine (red and white) category led the market—accounting for a share of more than 80 percent—red wine, accounts for over 73 percent of total volumes sold.  Local wine processing is also growing but still underdeveloped.

Nigeria’s large and increasing population with the country’s under-developed and high-cost local wine production has created strong growth prospects for wine exports to Nigeria.  The country’s middle-class has continued to increase over the last one and half decade while more Nigerian consumers have become health-conscious and accepting wine products as healthier beverage alternative.  The number of young, rich and educated Nigerians with strong desire to move up the social ladder is also rising and boosting growth in the sector. New brands as well as the entry of new players continue to result in increased competition and sales growth.

The peak of Nigeria’s economic downturn in 2016 contracted the wine market by about 26 percent from $430 million in 2015 to $320 million last year. With the country’s economy gradually recovering, Nigeria’s wine market increased 20 percent in 2016 from $320 million in 2016 to $385 million in 2017. Increasing global oil prices and heightening political campaigns ahead of Nigeria’s national elections in February 2019, is expected to boost wine consumption to $490 million in 2018, a 30 percent increase compared to the previous year. 

Effective June 4, 2018, the GON introduced new excise duty rates for products it categorized as luxury foods, including wine over a 3-year period up to 2020. The standard 20 percent rate was replaced by a tax per centiliter. Wines now attract a tax of about 3 cents per centiliter in 2018 and about 4 cents per centiliter each in 2019 and 2020. The objective is to raise revenue, as well as to discourage the smuggling of wine through neighboring countries. 

The EU, South Africa and other suppliers offering mostly entry level and inexpensive wine products, remain the leading suppliers. Although there were no formal U.S. wine exports to Nigeria prior to 2010, over the past decade, wine exports to Nigeria have maintained a steady and significant growth. Like wines from other countries, U.S. wines are also entering Nigeria through the Nigerian ports or shipped to neighboring countries and transported by road into Nigeria. U.S. exporters are encouraged to exploit opportunities provided by the increasingly large wine demand to boost exports of U.S. food, beverages and agricultural products to Nigeria. 

Leading Sub-Sectors
Alcoholic wines and spirits; Still wine (red and white) category account for a significant share of more than 80 percent of wines in the; Recent increasing demand for upscale/premium wine and spirits labels. 
Alcoholic wines and spirits; Still wine (red and white) category account for a share of more than 80 percent; Recent increasing demand for upscale/premium wine and spirits labels. 

Opportunities
With a population of more than 180 million people, Nigeria provides a large market for alcoholic beverages valued approximately $5.0 billion. Per capita wine consumption jumped from an insignificant level to about 20 liters in 2017. Local wine processing remains underdeveloped, while the cost of production is high. Middle class and young, rich and educated Nigerians with strong desire to move up the social ladder is boosting wine consumption in Nigeria.

Web Resources
Regional Agricultural Affairs Office
U.S. Department of Agriculture (USDA)
Office of Agricultural Affairs
U.S. Consulate, Lagos-Nigeria
Email:  aglagos@usda.gov
Websites: Foreign Agricultural Service

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Nigeria Agribusiness Trade Development and Promotion