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BETAPLUS INVESTMENT DECISION NOTE
CONTENTS
INTRODUCTION MAJOR HIGHLIGHTS OF NIGERIAN ECONOMIC RECOVERY GROWTH PLAN (2017 - 2019) AS REGARDS AGRICULTURE AGRICULTURAL OPPORTUNITIES IN NIGERIA SHORT TERM OPPORTUNITIES Oil Palm Fish Farming Poultry Rice FarmingSugar Farming LONG TERM OPPORTUNITIES Agricultural Equipment Leasing LOAN OPPORTUNITIES IN AGRICULTURE Bank of Agriculture LSETF Funding Opportunities for Micro Enterprise REFERENCES
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INTRODUCTION
In the 1950s, before the discovery of the ‘Black Gold’
we call crude oil, agriculture played a major role in the
development of the major regions of Nigeria. In the
West, cocoa was produced and exported through the
Cocoa Marketing Board to foreign countries. In the
North, groundnut, hides and skin were produced largely
in Kano and other towns and villages. In the East, oil
palm was produced and exported to foreign countries
like Britain and France and all this was sufficient in
employing over 60 per cent of Nigerians in all the regions
of the nation but with the unearthing of crude oil, many
states focused on oil money and abandoned agriculture.
Sadly, the slump in the price of crude from $110 per barrel
in 2012 to $30 per barrel in 2015 plunged the Nigerian
economy into recession due to over-dependence on the
oil & gas sector (mono-economy). The nation’s over-
reliance on crude oil has resulted in a crippling economy
and has thus made room for a change in Nigeria to switch
to agriculture as its major contributor to GDP. Agriculture in
Nigeria accounted for 23.1 per cent of GDP and employed
38 per cent of the working population; this is remarkably
low when compared to agriculture’s contribution to Sierra
Leone’s GDP total which stood at 61.33% that same year1.
In a bid to make significant improvement in this sector, the
Federal Government launched the Growth Enhancement
Support (GES) scheme in 2012 to supply subsidized inputs
to smallholder farmers – by the second half of 2015, 14
million farmers had registered in the scheme. The Federal
Government also launched series of programmes to
increase access to financing, including the Commercial
Agricultural Credit Scheme (CACS), the Anchor Borrowers
Programme and the Nigeria Incentive-based Risk-sharing
System for Agricultural Lending (NIRSAL). To increase
agricultural productivity, it also mapped soil characteristics
across the country and launched irrigation projects. The
area of arable land being farmed was 6 per cent lower
in 2015 (34 million hectares) than in 2007 (37 million
hectares), thus indicating the pervasiveness of idle land.
The Federal Government is working to reverse this
trend. In 2016, it opened 5,000 hectares of irrigable
land for farming to prospective investors and promised
to open more in the coming years. Successful harvests
will also help to reduce inflation and promote economic
diversification. New federal government policies have
been set in place which focus on the needs of the
Groundnut pyramid, Kano State (1955)
people by prioritizing food security as a critical national
objective, and plans are already in place for national
self-sufficiency in rice by 2018 and wheat by 2019/2020.
Earlier this year, President Buhari launched Nigeria’s
Economic Recovery and Growth Plan (2017-
2020) which is expected to take Nigeria out of the
current recession by achieving a 7% economic
growth rate by 2020 and prioritizing investments
in Transportation, Infrastructure and Agriculture.
MAJOR HIGHLIGHTS OF THE
ECONOMIC RECOVERY AND GROWTH
PLAN (2017-2020) AS REGARDS
AGRICULTURE
As regards agriculture, the ERGP aims at maintaining as a
stable driver of GDP growth, with an average growth rate of
6.9 per cent over the plan period. Growth will be boosted in
the agricultural sector by expanding crop production and
the fisheries, livestock and forestry sub-sectors as well
as developing the value chain. Investment in agriculture
will drive food security by achieving self-sufficiency in
tomato paste (in 2017), rice (in 2018) and wheat (in 2020).
“Thus, by 2020, Nigeria is projected to become a net exporter of key agricultural products, such as rice, cashew nuts, groundnuts, cassava and vegetable oil”
Agriculture can be divided into four sub-sectors: crop
production (89 per cent of agricultural GDP), livestock (8
per cent), fishing (2 per cent), and forestry (1 per cent).
Fig I: Percentage Contribution to Nigerian Agriculture GDP (2015)
Agriculture can be divided into four sub-sectors: crop
production (89 per cent of agricultural GDP; 4.1 per
cent growth in 2010-2015), livestock (8 per cent;
3.3 per cent growth), fishing (2 per cent; 7.5 per cent
growth), forestry (1 per cent; 4.3 per cent growth).
From Fig.1 It can be seen that the predominant sub
sector in agriculture is crop production which comes as
no major surprise as Nigeria presently has its abundance
in food and cash crops such as beans, cassava, cocoa
beans, groundnuts, palm kernels, rice, rubber etc.
Policy Objectives:
• Increase agriculture GDP by 70% in 2020 at an
average annual growth rate of 6.92 per cent (2017 -
2020).
• Significantly reduce food imports and become a
net exporter of key agricultural products.
• Become self-sufficient in tomato paste (2017), rice
(2018), and wheat production (2019/2020).
The ERGP will build on present agriculture sector plans,
such as the Green Alternative Agriculture Promotion
Policy and the Presidential Initiative on Fertilizer.
The Federal Government’s Agriculture Promotion Policy,
The Green Alternative, builds on the gains made by the
Agricultural Transformation Agenda. It aims to work with
key stakeholders to build an agribusiness economy that
can deliver sustained prosperity by meeting domestic
food security goals, generating exports, and supporting
sustainable income and job growth.
It will achieve these objectives by focusing on three areas:
i. Enhancing productivity by improving access to land,
information, knowledge, and inputs, soil fertility, production
management, storage, processing, marketing and trade.
ii. Crowding in private sector investment by offering access
to finance and developing agribusiness investment.
iii. Realigning the Federal Ministry of Agriculture and
Rural Development to include institutional setting
and roles, youth and women, infrastructure, climate
smart agriculture, research and innovation, and food,
consumption and nutrition security.
President Buhari and other delegates during the Federal Executive Council Meeting held at the Council Chamber State House Abuja (2017).
1. THE GREEN ALTERNATIVE
The Presidential Initiative on Fertilizer is another
agricultural promotion policy of the current administration.
It is a PPP (public private partnership) initiative that
improves crop production and yields by making fertilizer
available to farmers at significantly reduced prices
through the leveraging of the private sector support for
the Administration’s priorities.
2. PRESIDENTIAL INITIATIVE ON FERTILIZER
AGRICULTURAL OPPORTUNITIES IN NIGERIA
There are so many opportunities investors at home
and abroad can achieve from agricultural practices in
Nigeria. Among these opportunities are snail farming,
quail farming, fish farming and agro-processing as well
as vegetable production (green house options), bee
keeping agro-allied service provider opportunities such
as ICT e.g. development of early warning systems (WS)
record keeping and other value addition opportunities etc.
SHORT TERM AGRICULTURAL OPPORTUNITIES IN NIGERIA
Oil Palm Plantation, Akwa Ibom state
Oil Palm
Oil Palm FruitCrude Oil e.g. margarine, Fiber e.g. paper, Sludge e.g. soap
Oil Palm NutKernel e.g. frying oil, Palm Cake e.g. fertilizer, Empty bunch e.g. bio-diesel
Oil Palm Trunke.g. Furniture
2006 estimates revealed that the extent of oil palm
cultivation in Nigeria was over a million hectares.
Setting up your Oil Palm Plantation in Nigeria
When setting up an oil plantain especially in the East or
West of Nigeria, a smooth field or land where tractors
can transport the necessary soil nutrients and other
needed materials is fundamental to the success of such
plantation. In a case where uncertainty about the quality
of land may arise, a sample of the soil can be taken to
the Nigerian Institute for Oil Palm Research (NIFOR) to
analyze and necessary recommendations will be made.
After buying the land, you prepare it in good condition.
Tractor soil pulverizers are highly recommended to loosen
the soil by removing hard roots in preparation for palm
seedlings and making the soil well suited for planting.
But before preparing the land, the palm nursery should
be ready. There are two options to achieving this, either
to germinate your own seeds or buy already germinated
seedlings.
The overall time period it will take from getting of high
yield seed from the Nigerian Institute for Oil Palm
Research (NIFOR) to transplantation of the seedlings
into the farm is about 15 to 17 months. Alternatively, you
can buy already prepared seedling at about N120 per
seedling. If you are planting 10,000 palms, you will have
N120 x 10,000 = N1.2 million. So, germinating your own
seedling is less costly but takes some time. The cost of
land as well as quantity of labor force may vary.
To read more on procedures to Oil Palm farming, visit the
Nigerian Institute for Oil Palm Research or follow the link:
http://nifor.gov.ng/oil-palm/
The Oil Palm tree is one of the greatest economic assets
Nigeria possesses provided that its importance is realized
and potentials fully harnessed. Nature made it so that all
aspects of the oil palm tree is useful and economically
viable. From the fruit to the trunk, nothing is a waste
in oil palm and here are some of the by-products of oil
palm in food and manufacturing industry. Oil Palm can
be transformed into:
Fish Farming (Aquaculture)
Ajanla Farms, Isolo, Lagos State
Fish farming is a profitable business that’s widespread
across various parts of Nigeria. The insatiable demand
for fishery products like Tilapia, Catfish, and Mackerel
(Salmon) in Nigeria has constantly self-promoted the
steady growth and expansion of the industry. These
factors, coupled with the current support of The National
Institute for Freshwater Fisheries Research (NIFFR), the
Nigerian government and several other African countries
to promote agriculture and support fish farmers makes the
industry one of the most lucrative agricultural business
segments to venture into.
Fish farming can be done in five different kinds of ponds:
1. Earthen Pond (done in water logged area)
2. Concrete Pond which can be sub divided into:
• Flow Through Pond (water coming in and water
going out)
• Re-circulatory System
3. Movable/Collapsible fish pond made of tarpaulin
4. Pens and cages
5. Tanks
The most important resource in fish farming is water. To
a great extent, the quality of water determines success
or failure in fish farming. For best results, pH level of the
water should be 6.5 & 8.
Feeding:70% of production cost is represented in feed. A Tilapia
fish needs 30% crude protein while a catfish needs 45%
crude protein. The amount of feed depends on size,
nutritional need, age of fish etc. Feed must contain all
necessary nutrients. As fishes get bigger, crude protein
requirements get smaller. Fishes should be fed at a
particular time daily at a particular feeding spot.
Sorting and Test Cropping:Sorting of fish means grouping same size of fish together
during feeding in order to allow smaller fish eat more and
get as big as the other fish while test cropping simply
means regulating fish size. Juveniles are baby fish.
Juveniles @ N30 each NGN30, 000
Feed @ N410/kg NGN369, 000
Less mortality @ 10% NGN900
Running cost NGN60, 000
Total cost NGN459, 000
Income of 810kg catfish @ N750/kg
NGN607, 500
Gross profit NGN148, 500
For production of 1000 Juveniles;
The California White Birds, Poultry farms, Lagos
Poultry FarmingPoultry contributes to improved human nutrition and food
security by being a leading source of high quality pro-
tein in form of eggs and meat. Poultry birds are fowl,
duck, turkey, goose, quail, ostrich etc. Poultry in Nigeria
had moved from the backyard poultry rearing (traditional
methods) to the present modern poultry. There are two
types of chickens which are Local chickens (takes longer
to mature and produces fewer eggs) and imported (Ag-
ric) chickens.
Agric Chickens can be divided into:i. Broilers – 2 months to maturity and are always white in colorii. Cockerels – 4-6 months to maturity and are either black and white, browniii. Layers – 4-6 months to maturity and are black,
brown
Stocking of Broiler (day old chicks) @ 250
NGN50, 000
Feeding broiler starter 18 bags @3,350
NGN 60, 300
Broiler finisher 14 bags @3,280
NGN 45, 920
Medication & vaccination NGN 20, 000
Fuel & Electricity Bill NGN 30, 000
Transportation of feed materials
NGN 10, 000
Pen, feeding & drinking trough
NGN 300, 000
TOTAL NGN516, 220
Broiler Program (200 Stocking Capacity);
Profitability for Broiler Sales;
If 3 cycles in 1 year produces 190 birds per cycle
i.e. 190 x 3 = 570 (10% mortality rate)
if sold at N2000 per bird (farm gate price)
For one year = 570 x N2000 = N1,140,000
Net Profit Per Year = gross profit – recurrent + depreci-
ation cost)
N1, 140, 000 – (N 516,220 + N30, 000) = N593, 780
NET PROFIT PER YEAR = N593, 780
Layer Program/Working Capital (200 Capacity)
Stocking (i) POL @ 1,400 (500 birds)
NGN 700, 000
Feeds and concentrate 7bags of feeds per week (X 20weeks) 140 bags @ 2600
NGN 364, 000
Medication & vaccination NGN 10, 000
Transport of feed materi-als
NGN 5, 000
Miscellaneous NGN 5, 000
Admin (SALARY & WAGES)
NGN 60, 000
Fuel & Electricity Bill NGN 15, 000
SUBTOTAL NGN 1, 159, 000
For more details please contact the BetaPlus Research
Helpdesk or follow the link below to contact the Poultry
Association of Nigeria (PAN): http://www.poultryassoci-
ationng.com/
Rice farms, Sokoto State
Rice Farming
Over the years, consumption of rice in Nigeria has
increased massively as it is regarded as one of its essential
staples in this part of the world. Every year, Nigerians
consume about 5.5 million tons of rice but only 3.6 million
tons of these 5.5 million tons are locally produced. In the
past, most of the farmers who produced rice did so for
personal consumption. Most farmers did not go into the
farming practice with the knowledge and technical know-
how needed to succeed. From this, we can see that the
production demand on rice is exceedingly high.
The Minister of Agriculture and Rural Development, Chief
Audu Ogbeh, said the Federal Government is doing
everything possible to achieve self-sufficiency in rice
production before the end of 2018 during a News Agency
of Nigeria Forum in Abuja in March 2017. According to
him, there were strong indications that Nigeria would
become self-sufficient in rice production by 2018 because
many farmers had rediscovered their potential in rice
farming. The Federal Government had just imported 110
rice mills, adding that the mills would soon be distributed
to communities across the country. Ogbeh said that the
gesture was aimed at boosting the production and income
of rice farmers, adding that some of the rice mills could
mill 50 tons of rice per day. By so doing, there will be a
job creation of about 20 million in the villages and saving
about five million dollars used for the importation of rice
daily. According to him, the recession in the country did
not affect people in the villages.
Setting up your Rice Farming in Nigeria:i. Choice of land (land with clayey soil is most
desirable like Kebbi, Benue, Sokoto)
ii. Land preparation
iii. Time of planting (May/June during rainy season)
iv. Planting (direct planting, transplanting, nursery
raising)
v. Water management
vi. Weed control
vii. Bird control
Rice farming takes a duration of about 4 months. The
color of the crop will change from green to light brown
when the rice is fully matured. Once the color changes,
then the rice is ready for harvest.
Sugar Cane Farming
Sugar Cane farming, Jigawa State
Sugar, one of the product obtained from the processing of
sugar cane, is consumed by virtually everyone because
it has little or no substitute. Although there are variants
of sweeteners – honey, saccharine, and others, these
are seldom used by the industrial consumers of sugar.
Sugar is consumed by households and particularly in-
dustries where it serves as raw materials for companies
in the foods and beverages industry such as confection-
eries, soft drink and brewery and pharmaceuticals alike
account for 35 percent of the total sugar consumption
in Nigeria. Trends in industrial activities suggest that the
demand for sugar will continue to rise.
Due to the high dependability of the government on sug-
ar, it is imperative that the crop’s potentials be maximized
given that Nigeria has prominence of being a major ex-
porter. All this will be possible if capacity of the existing
sugar plants are enhanced, new plants established and
sugarcane farmers are supported through provision of
financial, mechanical and infrastructural inputs. In real-
ization of this, National Skill Development Corporation
(NSDC) developed a road map called Nigeria Sugar
Master Plan (NSMP) for attainment of self-sufficiency
in sugar 2013-2023. The implantation and adoption of
the road map for sugar sector development displays the
government’s commitment to leveraging on agriculture to
diversify the Nigerian economy as well as job creation.
The table in Fig 2 above shows the top 5 consuming states of sug-ar in Nigeria with Lagos consuming about 697016 metric tonnes, Ogun 99208 metric tonnes, Oyo 48038 metric tonnes, Anambra 22815 metric tonnes, Kano 15842 metric tonnes.
LONG TERM AGRICULTURAL OPPORTUNITIES IN NIGERIA
One of the biggest challenges of agriculture in Africa
is poor mechanization. Most farmers on the continent
still use crude tools and manual methods to cultivate
the land. As a result, low productivity, poor yields and
inefficiency continue to hold back the promising potentials
of agribusiness in Africa. However, with the hiring/leasing
option, farmers can hire a tractor and other necessary
farm equipment and only pay a small fraction of what
Agricultural Equipment Leasing
LOAN OPPORTUNITIES IN AGRICULTURAL
Bank Of Agriculture Loan OpportunitiesThe CBN had pumped N220 Billion into agriculture to give
loans at as high as 9% to interested Nigerians in Novem-
ber 2015. The agricultural commodities covered under
the scheme are Cotton, oil palm, fruit trees, rubber, sugar
1. Locate the office of the Bank of Agriculture that
covers the area or local government area where your
farm is situated and open an account with the bank with
a minimum deposit of N3,000.00
2. For the ‘Know Your Customer’ (KYC) requirements,
present your utility bill, approved means of identification
such as International Passport, Driver’s License, Nation-
al Identity Card or Voters Registration Card.
these equipment would have cost, if they wanted to
buy them. As Africa’s population continues to grow and
the demand for food increases, there is an interesting
business opportunity to support African farmers with farm
machinery under flexible, short-term arrangements.
Every agricultural operation depends on reliable
equipment. With today’s level of investment in field and
facility equipment, leasing provides an alternative to
the cost of purchasing while protecting your operation
against obsolescence by allowing new equipment and
technology to be acquired without a great cash outlay.
cane, cocoa, rice, wheat, cassava, maize, soya, beans,
millet, tomatoes, vegetables, meat, piggery, fingerlings
and catfish and many others. The Federal Government
of Nigeria has provisioned N220 Billion as loans to gen-
uine farmers. The loans can only be disbursed through
the Bank of Agriculture (BOA), formerly known as the Ni-
gerian Agricultural Credit and Rural Development Bank
Limited (NACRDB).
3. The account must run and operate for at least 3 -
6months before applying for the loan. Regular deposits
and withdrawals on the account during the 6-month pe-
riod to create an active relationship enhances the bank’s
confidence in the applicant.
4. There must be an existing farm, be it small or big
at a fixed location and the farm must have its record of
operations and activities on a daily basis neatly kept. The
bank will visit your farm for inspection when you apply for
the loan.
Lagos State Employment Trust Funding Opportunities for Micro Enterprises (LSETF)
This particular Lagos State business funding is specifi-
cally structured in two categories
1. Micro-enterprise loans
2. Existing business loan
The steps to obtain the loan are as follows:
The details, features and requirements for these loans
are shown below:
DETAILS & FEATURES STARTUP EXISTING BUSINESS
Maximum Loan amount
N250,000.00 500,000.00
Interest Rate 5% per annum 5% per annum
Tenor 12 months (with a 3-month moratorium on principal & interest)
12 months (with no moratorium)
Equity Contribution 5% 5%
Documentations and Requirement
1. Completed application form on their website http://www.lsetf.ng/
2. Training certification (indicating the applicant’s suitability to
engage in the proposed business - applicable to Start Up).
3. LASRRA ID (Lagos State Residency Registration) of the borrower
(Kindly follow the link to locate centers http://www.lagosresidents.gov.
ng/centres/)
4. Tax ID (for new entrants to the job market, students, they can be
registered at LIRS Offices and will only need to remit taxes at the end
of this year) - For the Micro- Enterprise category TIN is not required,
however as promoters of the business LIRS (Personal Income Tax)
is required .Registered and already existing do not qualify for the tax
exemption. For startup businesses (the students/Youths) they will only
register with LIRS, they are exempted from paying Tax for one year
upon commencement of their business.
5. Notarized Guarantors Form (This form must be filled by the
guarantor and notarized by a Notary Public) + LASRRA ID of the
guarantor - A guarantor can either be financial/ behavioral, but must be
able to show capacity to repay in the event of default. The Guarantor
must be a permanent resident in Lagos State and must submit a copy
of LASRRA ID. The Guarantor must also have a valid BVN.
About Us: The World Bank Organization. (2015). Retrieved from World
Bank Web site: www.worldbank.org
Crop Life International. (May 2012). The Benefits of Public-Private
Partnership. Brussels, Belgium: Croplife International.
Dodondawa, O. (2017, May 8). Retrieved from Nigerian Tribune : www.
tribuneonlineng.com
Opadokun, I. a. (2017). BEST MANAGEMENT PRACTISES FOR
CATFISHING FARMING IN NIGERIA. Lagos, Nigeria.
Planning, M. O (2017). Economic Recovery and Growth Plan (2017
-2020). Lagos.
References
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