Top Five Agro-Commodities Creating Export Opportunities in Nigeria

The agricultural sector in Nigeria is a multifaceted industry, encompassing crop production, livestock farming, fisheries, and forestry. Crop production is the dominant sub-sector, contributing significantly to the country’s Gross Domestic Product (GDP) and export earnings. Major crops cultivated in Nigeria include cereals like maize, rice, and sorghum and cash crops such as cocoa, rubber, palm oil, and cashew nuts.

Livestock farming is another vital component of Nigeria’s agricultural landscape, providing meat, dairy products, and other essential commodities to meet the population’s dietary needs. Poultry, cattle, goats, and sheep are among the most commonly raised livestock species in the country.

Fisheries and aquaculture contribute to both food security and economic development, with Nigeria’s extensive coastline and inland water bodies supporting diverse fish species. The forestry sector, although often overlooked, plays a significant role in providing timber, fuelwood, and non-timber forest products to meet various domestic and industrial needs.

The failure to fully harness the agricultural sector’s potential has hindered Nigeria’s ability to achieve food self-sufficiency and deprived the nation of a significant source of revenue and foreign exchange earnings.

However, amidst the challenges faced by the Nigerian economy, there is a growing recognition that now more than ever, the agricultural sector holds the key to unlocking sustainable growth, creating job opportunities, and ensuring food security for the nation.

Top Five Agro-Commodities Creating Export Opportunities in Nigeria

Cashew Nuts

Cashew nuts have emerged as a significant export commodity in Nigeria, with increasing shipments to Asia, Europe, and the United States of America. Nigeria, boasting natural habitat for cashew trees, stands as one of the world’s leading producers and suppliers of cashew nuts. The country ranks fourth in Africa and sixth globally, producing approximately 160,000 metric tons annually, a figure projected to escalate to 500,000 metric tons by 2025.

Beyond its value as a snack, cashew nuts serve as industrial raw materials in various sectors including chemicals, paints, varnishes, and more. The adaptability of cashew trees to adverse climatic conditions and poor soils presents farmers with opportunities to establish and expand plantations. Notably, cashew cultivation promises high returns on investment, reaching up to 55%, with a mere 12-month payback period.

Despite its potential, Nigeria’s cashew industry faces challenges hindering full exploitation. Approximately 95% of cashew nuts are exported unprocessed, disregarding the significant investment prospects in value addition. Inadequate storage facilities contribute to the estimated annual loss of eight million tons of fresh cashew fruits. However, the untapped opportunity lies in processing, where the difference in export value between raw and processed cashew nuts is substantial.

Investors can capitalize on processing by establishing on-farm units for value addition, significantly enhancing earnings. Moreover, exporters and marketers can tap into the increasing global demand for Nigerian cashew nuts. To succeed, thorough research is imperative, encompassing market understanding and business dynamics. Whether targeting local or international markets, procuring necessary machinery such as boilers, shellers, dryers, and packaging equipment is essential.

Cashew nut kernels’ quality is determined by size, color, and moisture content, with ivory-colored whole kernels fetching premium grades. Embracing innovation and technology while ensuring competitiveness in the international market is pivotal. Notably, cashew cultivation spans Nigeria’s South-West, South-South, and South-East regions, with Enugu, Oyo, Anambra, Osun, and Kogi serving as major production areas. Harvested between February and June, cashew exports contribute significantly to Nigeria’s economy, predominantly to Vietnam and India.

Sesame Seeds

Sesame seeds represent a significant export opportunity for Nigeria, as global demand for the crop continues to soar. In the first quarter of 2021 alone, sesame emerged as the most exported agricultural commodity, with Nigeria exporting N42 billion worth of the crop and extracting N3.4 billion worth of oil from it. Main export destinations include Japan, China, Turkey, and Europe.

With its myriad of commercial and medicinal benefits, sesame seeds have garnered considerable attention. Notably, the oil extracted from the seeds boasts a cholesterol-free composition, rendering it highly sought-after both locally and internationally. Its extensive applications span various industries, including baking, medicine, cosmetics, and animal feeds, owing to its high oil content ranging between 44 and 60 percent.

Despite its immense potential, Nigeria has yet to fully exploit the opportunities presented by sesame seeds. More investments are needed across the value chain to unlock its full potential. Currently, Nigeria stands as the largest producer of sesame seeds in Africa and the third-largest globally, producing approximately 480,000 tons in 2019.

However, challenges persist in the sesame seed export sector, primarily due to the predominant exportation of unprocessed seeds. This lack of value addition results in diminished returns for Nigerian exporters. To maximize profits, there is a pressing need to increase private sector investments in sesame processing. Currently, the country operates only three functional processing plants, significantly limiting processing capacity.

Moreover, Nigeria must address yield limitations to compete effectively in the international market. Compared to China’s average yield of 1.5 metric tons per hectare, Nigeria’s yield stands at a mere 0.8 metric tons per hectare. By enhancing production efficiency and increasing average yield per hectare, Nigeria can bolster its competitiveness in the sesame seed export market.

In conclusion, sesame seeds hold immense export potential for Nigeria, offering lucrative opportunities for economic growth and development. However, realizing these opportunities necessitates addressing key challenges such as limited processing capacity and yield constraints. With strategic investments and interventions, Nigeria can position itself as a leading player in the global sesame seed market, reaping the benefits of increased exports and foreign exchange earnings.

Shea Butter

Shea butter has emerged as a highly sought-after ingredient in various consumer products worldwide, ranging from food items like chocolate and margarine to personal care products such as face cream and lipstick. With its emollient properties and diverse applications, shea butter has become a staple in households globally, addressing skincare concerns like dryness and wrinkles.

Nigeria, Africa’s largest economy, boasts abundant reserves of shea butter, with the crop growing naturally in 20 out of the country’s 36 states. Niger, Kwara, and Oyo states are among the top producers, offering immense potential for wealth creation and employment generation in rural communities. According to Jubril Bokani, the national president of the National Shea Producers Association of Nigeria (NASPAN), converting 100,000 metric tons of shea nuts into approximately 48,000 metric tons of shea butter for export could generate $72 million and economically sustain about 600,000 rural women.

The global demand for shea butter is on a steady rise, with estimates reaching $10 billion and projected to surpass $30 billion by 2020, according to the Nigerian Export Promotion Council (NEPC). Nigeria leads the world in shea butter production, producing 302,955 metric tons in 2019, as per the Food and Agricultural Organization (FAO). Although Ghana is the largest exporter in Africa, Nigeria has the potential to double its production for export through crop domestication efforts.

While progress has been made in reducing the gestation period of the Karite tree, further technology development is needed to fully domesticate the crop and boost production. Nigeria’s shea butter market remains largely untapped, with the potential to yield approximately $2 billion annually, according to the Global Shea Alliance (GSA). In the first quarter of 2021 alone, Nigeria exported N1.8 billion worth of shea cake, indicating the significant export potential of shea butter.

Cocoa

Cocoa holds a special place in Nigeria’s agricultural sector, representing a cornerstone of the country’s economy and heritage. With its rich history and widespread cultivation in states like Ondo, Cross River, and Ogun, cocoa stands as a symbol of Nigeria’s agricultural prowess and export potential.

Cocoa beans serve as the primary raw material for chocolate production, as well as various confectionery and beverage products. Nigeria’s cocoa industry offers significant export opportunities, with the potential to generate substantial foreign exchange earnings and support rural livelihoods.

In the 1960s and 70s, Nigeria held a prominent position as a major cocoa producer, supplying a significant portion of the world’s demand for cocoa beans. Cocoa served as a crucial revenue and foreign exchange earner for Nigeria, supporting millions of jobs, particularly in the southwest region. However, Nigeria’s cocoa production declined over the years, leading to a loss of its leading position in countries like the Ivory Coast, Ghana, and Indonesia.

Despite this decline, cocoa remains Nigeria’s flagship non-oil export, offering numerous opportunities throughout its value chain, from cultivation to processing into cocoa cake, butter, and chocolate production. The International Cocoa Organization (ICCO) estimates the global value of raw cocoa exports at approximately $10 billion annually, with chocolates and other cocoa-derived products contributing significantly higher values.

Former national president of the Cocoa Association of Nigeria (CAN), Sayina Rima, highlights the massive investment opportunities and economic potential inherent in cocoa production for Nigeria. The southwest region, in particular, benefitted significantly from cocoa proceeds in the past, laying the foundation for economic growth.

Nigeria experiences two cocoa harvest seasons annually: the smaller midcrop from April to June and the main crop from October to December. The main crop accounts for approximately 70 percent of Nigeria’s cocoa output, with the midcrop contributing the remaining percentage.

Despite ranking fourth globally in cocoa production, with 255,000 metric tons produced in the 2017/2018 season, Nigeria faces challenges in maximizing its cocoa export potential. Nonetheless, recent data from the National Bureau of Statistics (NBS) indicates that Nigeria exported N35.4 billion worth of raw cocoa beans and N1.2 billion worth of cocoa butter in the first quarter of 2021.

However, challenges such as aging cocoa plantations, low productivity, and inadequate infrastructure hinder the sector’s full potential. Addressing these challenges through investments in farm rejuvenation, technology adoption, and value chain enhancement is critical for revitalizing Nigeria’s cocoa industry and maximizing export opportunities.

Rubber

Rubber stands as a versatile export commodity with diverse applications across various industries, ranging from automotive and construction to healthcare and consumer goods. Nigeria’s rubber industry presents significant export opportunities, driven by the country’s natural rubber resources and growing global demand.

Nigeria boasts abundant rubber plantations, particularly in states like Edo, Delta, Ondo, and Cross River, making it one of the leading rubber-producing countries in Africa. With the global rubber market experiencing steady growth, there’s a burgeoning demand for Nigerian rubber both domestically and internationally.

Rubber is a vital raw material in industries such as tire manufacturing, footwear production, and automotive parts. Additionally, it finds applications in the construction sector for sealing and insulation purposes, as well as in the healthcare industry for manufacturing medical gloves and equipment.

Despite its immense potential, Nigeria’s rubber industry faces challenges such as inadequate infrastructure, low productivity, and limited value addition. Addressing these challenges through investments in infrastructure development, technology adoption, and value chain enhancement is crucial for maximizing the export potential of Nigerian rubber.

Moreover, sustainable cultivation practices and quality assurance measures are essential to ensure consistent supply and meet international quality standards. By leveraging technological advancements and best practices, Nigeria can enhance the competitiveness of its rubber exports in the global market.

In conclusion, rubber holds significant promise as an export commodity for Nigeria, offering opportunities for economic growth and diversification. With strategic investments and interventions, Nigeria can harness the full potential of its rubber industry, contributing to national development and prosperity.

Bonus: Ginger Production and Processing

Ginger stands as one of the most widely utilized food seasonings globally, with its demand steadily increasing alongside population growth. Exporters can capitalize on this trend to generate wealth and foreign exchange earnings by exporting dried and processed ginger. Primarily cultivated in states like Kaduna, Nasarawa, Benue, Niger, Gombe, and Kano, ginger serves as a crucial ingredient in various food and beverage industries, particularly in Asian countries where it’s used for ginger wine and food seasoning.

Nigeria’s ginger boasts exceptional flavor profiles, positioning it as one of the best varieties globally. With the global ginger market estimated at $4 billion, there’s a significant export opportunity for Nigerian farmers, especially in the current drive to boost exports. Additionally, ginger offers substantial health benefits and can be consumed in various forms, including powdered and fresh, adding versatility to its applications in culinary and medicinal contexts.

Despite Nigeria’s considerable ginger production, there exists a notable supply-demand gap, with production estimated at 31 million metric tons against a demand of 65 million metric tons. As a result, Nigeria ranks as the third-highest exporter of ginger globally. However, the country has yet to fully capitalize on the economic potential of ginger production, primarily due to challenges such as the use of low-quality seeds and inadequate technology adoption.

The adoption of modern agricultural practices and machinery, including tractors for land preparation and processing machines for washing, peeling, and drying, is crucial for increasing ginger production and improving yield per hectare. Additionally, addressing the issue of seed quality is imperative to ensure optimal production levels and meet growing demand. Investors keen on tapping into Nigeria’s ginger industry can explore opportunities in seed production and the provision of modern processing machinery, which would not only boost production but also enhance the quality and competitiveness of Nigerian ginger in the global market.

In summary, ginger production and processing present lucrative opportunities for wealth creation and export earnings in Nigeria. Addressing challenges related to seed quality and technology adoption is essential for unlocking the full potential of Nigeria’s ginger industry and positioning the country as a key player in the global ginger market.

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