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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© 2017

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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