Agro-Processing Development in Nigeria

An appraisal of the Nigeria Agro-Processing industry, the technological challenges, improvement suggestions and how investors can get involved in the industry.

Overview

 Over the last few years, the Nigeria agricultural sector has witnessed an incredible surge in production with various government interventions and ultimately ‘the rise of digital/technology in agriculture, which has broadened the aspects of sales, marketing, extension, storage, and other related activities across the agricultural value chain.

In the last ten years, it has been estimated that over 60% of farm produce undergoes second/multiple level value additions immediately after harvest, a technique known as agro-processing. The concept of agro-processing has created diverse small and medium enterprises opportunities, and these businesses sprouted from the idea of creating a presumptive solution to the many problems of post-harvest activities.

Though relatively new, the sector (Agro-processing) is fast becoming critically important to the expansion and diversification of the Nigerian agricultural industry as it aims to compete favourably with imported processed foods and create enterprises to support economic growth by leveraging emerging technology.

Some examples of enterprises developed from agro-processing concepts include; Instant pounded yam flour processing, Palm wine bottling and preservation, Vegetable oil extraction, Tiger nut drink production, Zobo leaves production, Fruit juice processing, Plantain chips processing etc.

Benefits of the Agro Processing Industry  in Nigeria

There are diverse opportunities in the agro-processing sector, considering different options of commodity-pick to explore and knowing it’s a space that still has so many unsolved problems.

Economically, the sector is still very much underdeveloped but has since shown a promising future of investment viability. Even as much as it currently fits in well with the small/medium enterprise classification, its actual potential has not yet been researched and consequently implemented; it can be argued that the sector is still in its sampling stage, hence to realise the benefits of this sector, there is a need to understand the underlying problems or the foundational cause of the concepts.

Post-harvest food losses in Sub-Saharan Africa are estimated to be worth $4 billion each year, enough to feed at least 48 million people. This information was revealed in a UN study by the Food and Agriculture Organization (FAO). Post-harvest loss accounts for most innovation behind agro-processing; poor storage, loss during transportation, insufficient and inefficient agro-processing skills among smallholder farming communities, lack of innovative approach to preservation, distribution, and inadequate infrastructure. Profit maximisation, exportability, and competitiveness are other factors that contributed to the development of the agro-processing concepts.

Some problems and Constraints to the Development of the Agro-Processing Sector include;

• Inconsistent and insufficient raw material supply
• Seasonality of crops
• Imperfect market information
• High losses during transport from farm to factory
• Obsolete processing and ancillary equipment
• Poorly trained personnel and a lack of qualified food technologists
• Inappropriate packaging materials and high packaging cost
• Weak or non-existent market development
• A lack of technical support for the agro-industrial sector

However, if properly nurtured, the benefits of the Nigerian agro-processing industry may include;

• Enhanced agricultural productivity and increased farm household incomes
• Establishment of indigenous food standards
• Large quantities of agricultural “waste” produced in one location can be transformed into valuable products such as animal feed.
• Reduce importation of similar or foreign foods and conserve foreign exchange
• Diversification of the economy to reduce present dependence on one export commodity
• Reduction of imports and meeting export demands;
• Stimulate agricultural production by obtaining marketable products;
• Generate both rural and urban employment;
• Reduce fresh produce losses;
• Improve farmers’ nutrition by allowing them to consume their own processed fruit and vegetables during the off-season;
• Generate new sources of income for farmers, artisans and investors;
• Develop new value-added products.

Impact of Technology on Agro-Processing

“Agriculture is in the early days of yet another revolution, at the heart of which lie data and connectivity. Artificial intelligence, analytics, connected sensors, and other emerging technologies could further increase yields, improve the efficiency of water and other inputs, and build sustainability and resilience across crop cultivation and animal husbandry” (Mckinsey & company)

The evolution of technology and local adaptation has dramatically assisted the incubation of innovative ideas in the agro-processing sector; for example, access to a digital market has encouraged sales and distribution of processed food, access to new knowledge in terms of available information on the internet as facilitated research and development of new products, availability of improved production equipment have also contributed to incubation of agro-processing ideas, it is therefore hard to completely separate technology from modern agro-processing ideas as the latter encouraged the development of the agro-processing sector. Moreso, further improvement in the technological vision will consequently mean growth in the agro-processing industry.

Is the Agro-Processing industry improving?

With the many challenges the agro-processing sector is facing, challenges ranging from lack of skilled individuals, management, wastage, shortage in equipment supply, amongst others, the question of how do we improve this sector to withstand the pressure and sustain the economy might be a relevant roadmap to the future development of the industry? The industry can be improved in the area of;

• Processing skill acquisition
• Favourable production/trade law
• Investment from government and individuals
• Technological improvement and adaptation
• Research and development

Generally, the sector needs more investment in all its definitions to compete favourably with counterpart foreign cultures.

Investment Opportunities

Investment opportunities in the agro-processing value chain are tremendous and viable enough for investment. Investors willing to explore the sector now understand the possible hindrances and can devise manoeuvring means. Some investment opportunities include but are not limited to;

1. Warehousing
2. Sun Drying and preservation
3. Production of preservatives/storage materials
4. Transportation
5. Production of packaging material
6. Food processing, e.g. Tigernut drink production, Zobo leaves production, Fruit juice processing, Plantain chips processing, and Tomato paste processing.
7. Production of industrial raw materials, e.g. Cassava based adhesives, oil extracts
8. Production of processing equipment/machinery
9. Distribution

_____________________________________________________________

Copyright © Akingate. All Rights Reserved.

See our copyright notice.

Image Credit: 89634058 © publicdomainstockphotos | Dreamstime.com