Agro-Processing Sector Needs $538m Annual Investment – LCCI
The Lagos Chamber of Commerce and Industry’s Agricultural and Allied Group has projected that increasing nationwide agro-processing capacity would require a continuous investment of $538m yearly for at least a decade.
In separate phone interviews, agriculture stakeholders urged the Federal Government to scale up agro-processing investment across the 36 states and the Federal Capital Territory by adopting a long-term plan anchored on each region’s comparative advantage and consistent support for farmers.
The Chairman of the Agricultural and Allied Group, Lagos Chamber of Commerce and Industry, Tunde Banjoko, projected that the Federal Government’s ongoing Special Agro-Industrial Processing Zones project with an initial kickoff in eight states was commendable but a meaningful industrialisation of the country may require a decade-long investment of the magnitude of the African Development Bank’s recent $538m commitment to the country’s SAPZ project.
“Industrialisation is not a one-year plan. It’s always a long-term thing,” Banjoko said. “It might take maybe 10 years. This is what AfDB is doing. If we have this $538m being done annually in the next 10 years, then we will be able to answer questions.”
The LCCI official noted that the success of the AfDB-backed initiative will depend heavily on states playing to their strengths.
“Each state has an area of comparative advantage. Like we had in the ‘60s. Those who are doing rubber, focus on rubber. Those in cocoa, groundnuts, sesame seeds, grains; until each state gets to that point where they work on what they are specialised in, we can’t say we are fully industrialised.”
Banjoko cautioned that not all states are currently participating in the AfDB initiative due to counterpart funding requirements.
“Some states have not committed to it. So they are not participating in this thing,” he stressed, adding that without full state-level involvement, Nigeria will struggle with its agro-industrialisation goals.
Meanwhile, a Professor of Mechatronics and Agricultural Machinery at the University of Nigeria Nsukka, Ozoemena Ani, warned against repeating the mistakes of past government-led agro-processing projects.
Read Also:
“This is not the first time Special Agro Processing Centres are being built across the country,” Ani recollected. “Around 2003/2004, the same thing was done by the National Centre for Agricultural Mechanisation for the six geopolitical zones in Nigeria. I was working with them then. No sustainability and follow-up,” Ani said.
Ani decried the lack of sustainable power models, poor business frameworks and unfavourable government policies that have historically crippled similar efforts.
He said, “There was no good plan on sustainable power to power the processing machines. No good business model, just the usual ‘government mentality’ which cannot survive in a competitive market.”
Ani stressed the need for policies that protect and encourage local farmers and producers, noting “When imported garri becomes cheaper than locally made one, and imported rice is more widely accepted and demanded than local rice, you know there is a problem.”
He described Monitoring and Evaluation in most government agricultural projects as “generally zero,” and insisted that any new effort must prioritise efficiency, farmer incentives, and continuity.
The stakeholders addressed present concerns that a failure to properly build agro-processing capacity in Nigeria will further hurt export gains and give way to increased food waste.
According to a post on April 25 on X, the AfDB President Akinwunmi Adesina warned that “Africa must end the exports of its raw materials. The export of raw materials is the door to poverty. The export of value-added products is the highway to wealth. And Africa is tired of being poor.”
According to an academic paper titled ‘Economic impact of waste from food, water, and agriculture in Nigeria: challenges, implications, and applications—a review’ by Ibiwumi Kolawole et al, “In 2021, the United Nations revealed that each year 37.9 million tonnes of food were wasted in Nigeria, which was estimated as 189 kg of food per capita wasted.”
The researchers reported that Nigeria loses and wastes 40 per cent of its total food production, equivalent to 31 per cent of its total land use.
The paper added: “The Food and Agriculture Organization has projected over the years that Nigeria, on average, loses $9bn annually to post-harvest waste, which is approximately a quarter of the yearly budget for the entire country.
“The grains, vegetables, tubers, and fruits which are being wasted are usually tomatoes, oranges, cashews, onions, beans, wheat, cassava, potatoes, and yams.“
