Overview

Nigeria relies on $10 billion of imports to meet its food and agricultural production shortfalls (mostly wheat, rice, poultry, fish, food services, and consumer-oriented foods). Europe, Asia, the United States, South America, and South Africa are major sources for agricultural imports.

The Government of Nigeria (GON) has initiated agricultural programs such as the Anchor Borrowers Program (ABP) to diversify its economy away from oil. GON at the Council on Agriculture and Rural Development Regular meeting, approved the implementation of new Agricultural policy named “National Agricultural Technology and Innovation Plan” (NATIP). The four-year blueprint designed to help Nigeria’s COVID-19 economic recovery. This policy will replace the Agriculture Promotion Policy (APP) that was launched in 2016 but terminated in December 2020.

Nigeria’s agricultural sector has been hurt by several shocks: sporadic flooding, Boko Haram (BH) insurgencies, and conflicts between herdsmen and local farmers. Food processing continues to suffer from a lack of financing and infrastructure.

Food inflation rose to 22.95% in Q1, 2021. There were wide-ranging price increases across items such as cereals, yam, meat, fish, and fruits. Causes of the food inflation include worsening conflict between farmers and herders, banditry, kidnapping, and insurgency in Nigeria’s agriculture belt that GON is struggling to suppress. Additional upward pressure is caused by devaluation of the local currency (naira) which has been devalued multiple times in 2021. Also, higher fuel prices have also contributed to rising food prices.

U.S. food and agricultural exports reduced about 33% from $653 million in 2019 to about $489 in 2020.  U.S. food and agricultural products exports to Nigeria averaged $537 million over the past 5 years—about 70% of which was wheat.   Last year, Nigeria imported over 1.29 million metric tons of wheat from the U.S., making it the fifth largest U.S. wheat importer in the world. Nigeria also imports U.S.-origin soybeans, intermediate food products (especially vegetable oils and animal fats), consumer-oriented food products (e.g., condiments and sauces, processed vegetables, wine, prepared food, dairy products, and non-beverage ethanol), and fish products.

U.S. imports of Nigerian food and agricultural products reached $50 million in 2019 (down just 2% compared to 2018). Major U.S. imports of Nigeria-origin food and agricultural products include cocoa beans, tea and herbal products, feeds and fodders, cashew/tree nuts, spices, and seafood products. Nigeria is a beneficiary of the African Growth and Opportunity Act but has struggled to take full advantage of the trade preference benefits.  The weakness of the country’s sanitary and phytosanitary (SPS)/food safety system means that food exports have difficulty meeting international standards.

Products with the most export potential include:

Wheat

Units: $ millions

Total Market Size = (Total Local Production + Total Imports) – (Total Exports)

Data Sources: USDA/BICO; Nigeria’s Wheat Millers Association; Master Bakers’ Association, Federal Ministry of Agriculture, and Nigerian Customs Service 

Local wheat production meets an insignificant portion of Nigeria’s wheat consumption demand. Overall demand is significantly augmented by imports, which are estimated at $2.1 billion in 2020 and projected to be $2.5 billion in 2021. With the country’s wheat milling capacity at more than 8.2 million metric tons (MMT), Nigeria is the fifth largest U.S. wheat importer in the world. Bread, semolina, and pasta are staples in Nigeria and the demand for these products continues to increase. Currently, the shares of wheat flour for bread, semolina, pasta and others, remains at 60%, 20%, 10% and 10%, respectively.

Nigeria has seen prices of all locally grown staple foods spike in 2021 weakening consumer purchasing power which is forcing consumers to resort to cheaper commodities. The first quarter of 2021 experienced 47% increase in wheat importation. The increment was because of spike in the price of rice and garri that are Nigerians’ staple foods, making consumption of semolina, pasta, and noodles more predominant. U.S.-origin wheat’s market share in Nigeria was over 90% in 2012 but has declined to less than 40% in 2020 due to steep competition from wheat exports from the Black Sea region (primarily Russia).

Leading Sub-Sectors

Wheat flour utilized for bread, noodles, pasta, biscuits (cookies), and semolina.

Opportunities

Local wheat production is insufficient to meet domestic demand and is relatively expensive. Consumers demand higher quality wheat flour-based products. Local importers consider U.S. wheat as a high-quality product and suppliers are viewed as consistent, reliable suppliers.

Resources

Regional Agricultural Affairs Office

U.S. Department of Agriculture (USDA)

Office of Agricultural Affairs

U.S. Consulate General, Lagos-Nigeria

Email: aglagos@usda.gov

 

Rice (Parboiled Milled)

Units: $ millions

Total Market Size = (Total Local Production + Total Imports) – (Total Exports)

Data Sources: Nigeria’s Rice Importers; Rice Farmers Association of Nigeria (RIFAN); National Bureau of Statistics; Federal Ministry of Agriculture; Nigerian Customs Service.

Nigeria is Africa’s largest producer of rice and is among the top 15 producers globally. GON had announced that the country would be self-sufficient in rice production by 2018 but the target was not attained. However, the high cost of rough paddy rice as well as high operational costs continue to hamper large-scale, integrated rice mills from producing at competitive prices.  Imports continue to meet approximately half of the country’s rice demand. Parboiled rice (also known as converted rice and easy-cook rice) account for the bulk of imports. Thailand- and India-origin rice (long-grain varieties) dominate imports. Nigeria remains one of the world’s largest markets for parboiled rice — consuming on average $4.0 billion worth of parboiled rice each year. GON’s Anchor Borrowers Program, initiated over the last three years, has contributed to increased domestic production.  However, paddy production and milling costs remain high.  Rice is one of the products listed by the Central Bank of Nigeria as not valid for foreign exchange at the Nigerian foreign exchange window.

Thailand-origin rice accounts for 65% of all rice imports followed by India at 20%.  Other origins include Brazil and China. Imported rice enters the market informally through Nigeria’s porous borders. Usually, shipments are destined for seaports located in neighboring countries and transported to Nigerian markets through land border routes.

Leading Sub-Sectors

Polished and milled rice (exclusively parboiled)

Opportunities

Nigeria still depends on approximately 1.7 MMT of imported parboiled rice to meet its domestic rice consumption demand.

Resources

Regional Agricultural Affairs Office

U.S. Department of Agriculture (USDA)

Office of Agricultural Affairs

U.S. Consulate General, Lagos-Nigeria

Email: aglagos@usda.gov

 

Dairy

Units: $ millions

Total Market Size = (Total Local Production + Total Imports) – (Total Exports)

Data Sources: Milk Powder Importers; AFBTE; Supermarket Operators Association (NASON); Wholesale Distributors; USDA/BICO.

The size of Nigeria’s dairy market in 2019 was $1.6 billion, with over 87% of demand met through imports. The country’s dairy market is potentially as large as $6.5 billion. Nigeria has the 4th largest cattle population in Africa, estimated at 20 million cattle, including 2.35 million cows used for dairy production.

Despite its size, the Nigerian dairy sector is largely fragmented, unproductive, and inefficient. Though smallholder dairy households (i.e., pastoralists) produce most of the raw milk in Nigeria, the end market is controlled by large multinationals that use imported milk in over 97% of products consumed. Local dairy processors rely on combining and reconstituting milk powder imported mostly from the European Union. The reconstituted milk is mostly packaged and sold as powdered, evaporated, and condensed milk and packaged in metal cans and sachets of different weights.

Ice cream, chocolate milk, yogurt, and shelf-stable milk production is from reconstituted imported milk powder. Infant formula, cheese, butter, as well as some ice cream, are mostly imported. Demand for these products continues to grow, with the consumption of flavored milk drinks (mostly consumed by school age children) increasingly in demand.

Beginning February 2020, the Central Bank of Nigeria (CBN) launched a program to conserve foreign exchange and encourage local production of milk and dairy products. The program introduced foreign exchange restrictions on the importation of milk and milk derivatives into the country. Following this policy, the CBN exempted and approved six Nigerian companies (i.e., to import milk and dairy products) that had keyed into Nigeria’s backward integration program as the solution to increase dairy productivity. These companies are: FrieslandCampina WAMCO Nigeria, Chi Limited, TG Arla Dairy Products Limited, Promasidor Nigeria Limited, Nestle Nigeria Plc, and Integrated Dairies Limited.

To curtail the recurrent clashes between herders and farmers in Nigeria, the National Economic Council approved the National Livestock Transformation Plan (NLTP) in 2019. The program aims to improve the performance and sustainability of the livestock sector, including meat and dairy production, through partnerships with state governments and the private sector.

Promasidor and Ekiti state government jointly collaborated to resuscitate the moribund Ikun Dairy Farm in Ekiti State. Ikun Dairy Farm sourced about 300 jersey cows from the US early in the year and the cow performance is encouraging. The lactating cows are producing an average of 25 liters of milk per day per cow. The farm is presently supplying about 600 liters of fresh milk daily to Promasidor factory for further processing into different products.

Leading Sub-Sectors

Powdered, evaporated, and condensed milk; packaged in metal cans and sachets of different weights; ice cream, chocolate milk, yogurt, and long-life milk; reconstituted imported milk powder; infant formula; cheese; butter; skimmed milk powder; flavored milk drinks.

Opportunities

Nigeria’s dairy processors rely on combining and reconstituting imported milk. The Nigerian dairy market is growing at 5% per year fueled by a growing, increasingly urbanized population demanding more dairy-based products. Domestic milk production is underdeveloped.  On average, a cow in Nigeria produces one kilogram of milk per day (compared to an average U.S. dairy cow, which produces about 32-35 kilograms per day).

Resources

Regional Agricultural Affairs Office

U.S. Department of Agriculture (USDA)

Office of Agricultural Affairs

U.S. Consulate General, Lagos-Nigeria

Email: aglagos@usda.gov

 

Seafood

Units: $ millions

Total Market Size = (Total Local Production + Total Imports) – (Total Exports)

Data Sources: Association of Fish Suppliers of Nigeria (AFISUN); Frozen Fish Wholesale Distributors; Catfish Farmers Association of Nigeria (CAFAN); USDA/BICO; Nigeria Federal Fisheries Department.

Frozen seafood is Nigerians’ most affordable source of animal protein and consumption is increasing. The country is a potential market for approximately 2.5 million metric tons of fish valued at $3 billion. Atlantic mackerel, horse mackerel, herring, and croakers are the main species consumed. Domestic catches and aquaculture production (mainly catfish and tilapia) remain underdeveloped due to high input costs. Catfish and tilapia, which are produced in Nigeria, are banned for export to the country. On March 1, 2018, USDA’s Food Safety and Inspection Service suspended the import of catfish and other fish products from Nigeria. Nigeria’s Federal Fisheries Department failed to fully address information requested in the self-reporting tool (SRT) prior to the due date. Consequently, Nigerian catfish farmers and processors lost the huge market opportunity for mostly smoked, packaged catfish they export to the United States. The Foreign Agricultural Service in Lagos is actively involved with the GON to address the issue raised by U.S. Food Safety and Inspection Services on catfish export to the US.

Leading Sub-Sectors

Atlantic mackerel, horse mackerel, herring, blue whiting, and croaker.

Opportunities

Frozen seafood is Nigerians’ most affordable source of animal protein.  Consumption is increasing. Under-developed domestic catches and aquaculture production promotes reliance on large volumes of imports to meet local demand.

Resources

Regional Agricultural Affairs Office

U.S. Department of Agriculture (USDA)

Office of Agricultural Affairs

U.S. Consulate, Lagos-Nigeria

Email: aglagos@usda.gov

Wine

Units: $ millions

Total Market Size = (Total Local Production + Total Imports) – (Total Exports)

Data Sources: Wine importers; USDA/BICO; Industry (AFBTE); Wine Distributors; Supermarket Owners and Operators (NASON).

Nigeria’s potential market for alcoholic beverages is valued at $2 billion. The still wines (red and white) category leads the market — accounting for a market share of more than 80%. Red wine alone accounts for over 73% of the total volume sold. Local wine processing is underdeveloped. Middle-class consumers are increasing their consumption of wine, perceiving it as a healthier option than other alcoholic beverages. Effective June 4, 2018, the 20% tax on wine was replaced by a tax of per centiliter over a three-year period through 2020. GON indicated it wants to raise revenues and reduce health hazards associated with alcohol abuse.

Leading Sub-Sectors

Alcoholic wines and spirits; still wines (red and white); premium wine and spirits labels.

Opportunities

Local wine processing capacity remains underdeveloped, with the cost of production high. Middle-class, young, rich, educated and upwardly mobile Nigerians are the key demographics boosting wine consumption.

Resources

Regional Agricultural Affairs Office

U.S. Department of Agriculture (USDA)

Office of Agricultural Affairs

U.S. Consulate, Lagos-Nigeria

Email: aglagos@usda.gov