Nigeria’s Shaldag fish farm, which produces processed, smoked catfish.
Businesspeople and investors highlight 11 opportunities in Nigeria’s agribusiness sector, from cattle farming and superfoods exports to plant-based milk substitutes and baby food production.
1. Cattle farming and beef processing. Thessa Bagu of Naijalink Limited suggests that efficiently executed, large-scale cattle fattening could prove to be a promising venture. This potential arises from the conflicts among ethnic groups in traditional grazing areas. (Read more: Opportunities in Nigeria – from building materials to health supplements)
2. Repair and upkeep solutions for Nigeria’s agricultural machinery. In the Nigerian agricultural sector, there is an untapped business opportunity in the efficient maintenance and repair of machinery, such as tractors, notes Mira Mehta, CEO of Tomato Jos. Persistent parts shortages have led to prolonged downtime. Mehta advises prospective entrants to connect with commercial farming entities to understand and solve their unique challenges. (Read more: Profit-making idea – Maintenance support for agricultural equipment in Nigeria)
3. Cold storage solutions. According to the United Nations’ Food and Agriculture Organisation, more than 40% of food in sub-Saharan Africa spoils before it gets to the consumer. This loss can escalate to 60% for fresh produce, indicating a substantial unfulfilled need for temperature-regulated cold storage facilities and transport services. An example of a Nigerian company that has tapped into this opportunity is ColdHubs, which offers solar-powered walk-in cold storage solutions tailored for farmers, retailers, and wholesalers. Strategically situated at key food production and consumption hubs like markets and farms, these cold rooms operate on a pay-as-you-store subscription model. Farmers are charged a daily flat fee per crate of food stored. (Read more: Pay-as-you-go cold storage CEO wants to expand beyond Nigeria)
4. Plant-based milk substitutes. Deepak Singhal, group head for consumer business at Singapore-headquartered Tolaram, identified the local production of plant-based milk substitutes as a potentially lucrative opportunity in some countries. Currently, Nigeria – where Tolaram has a substantial business – depends on imports for at least 60% of the dairy products it consumes. (Read more: Making money in Africa’s consumer goods market)
5. Turning Africa’s agricultural waste into electricity. There is potential in Africa to convert agricultural waste into electricity, according to Ikenna Nzewi, CEO and co-founder of Nigeria-based Releaf, a company that develops equipment and software to make the oil palm value chain more efficient and profitable. The palm oil processing industry alone generates substantial organic waste which can be used for electricity generation. “I think there is huge potential in biomass electrification, and it is a key area in which Africa needs to take a more active role in the research and development,” Nzewi says. (Read more: Transforming Africa’s farming by-products into power)
6. Baby food production. According to the International Trade Centre, the domestic production of infant food in Africa contains a wealth of untapped potential. Each year, Africa brings in €570 million worth of infant food preparations, a number that is expected to climb beyond €1.1 billion by 2026. This signifies a major investment chance in Africa’s baby food value chain, where imports outpace exports by a factor of ten. Entrepreneurs, such as Seun Sangoleye, the originator of Baby Grubz in Nigeria, are already capitalising on this prospect by using locally obtained ingredients to manufacture premium baby food. (Read more: Baby steps to a booming infant food business)
7. Hibiscus and other superfoods. Collins dictionary defines superfoods as “food that contains many vitamins and other substances that are considered to be very good for your health”. As global consumers become more aware of their health, several African producers are ramping up production of superfood crops suited for local cultivation. Nigerian commodities processor and trader AgroEknor built its business around the export of the hibiscus plant, a flower currently in high demand for processing into tea as well as an ingredient in various wellness products in its powdered form. (Read more: Nigerian businessman grows agricultural trading business after securing first client through LinkedIn)
8. Fish farming. Verod Capital’s managing partner, Danladi Verheijen, identifies fish import substitution as a significant opportunity. He points to villages in Norway where the entire economy is based on growing a particular type of fish (stockfish) sold to Nigeria. Trawlers from Southeast Asia also fish in the waters outside Lagos and Accra, process it in their countries and then sell it back into Africa. (Read more. From fish to pharmaceuticals, investor bullish about import substitution in Nigeria)
9. Export of niche consumer goods items to the US. The African Growth and Opportunity Act (AGOA) offers duty-free US market access to eligible sub-Saharan African countries. Exporters could focus on niche FMCG products, like dried mango, fruit jams, sugar-free chocolate, and canned catfish. Canned catfish is a particular favourite among West Africans living in the US. Its high demand and low domestic production make it a strong export candidate. (Read more: West African products that are in high demand in the United States)
10. Commercialising and formalising traditional foods. Several entrepreneurs have successfully commercialised traditional food items. A prime example is Chichi Eriobu, the CEO of Phronesis Foods. She recognised a market opportunity for packaged African breadfruit products, both in Nigeria and abroad. Known as ‘ukwa’ in Igbo, this edible fruit is predominantly grown and consumed in southeastern Nigeria. Its seeds are prized for their high nutritional value. Currently, Phronesis Foods offers an array of ukwa products, such as dried and roasted ukwa, ukwa poundo, and ukwa flour. (Read more: Taking local foods global, starting with African breadfruit)
11. Packaged foods and snacks. Around 51% of Nigeria’s population live in urban areas, with high urbanisation rates changing consumption habits. “People now look for more convenience and seek out packaged foods, which is different from what they would eat in rural areas. There is a huge opportunity to invest in companies able to produce a packaged food product at the right price point, which is key because many consumers in the region are price sensitive,” says Mezuo Nwuneli, managing partner and co-founder of private equity firm Sahel Capital. (Read more: Investor identifies three opportunities in West Africa’s food and agriculture sector)
