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Nigeria Agribusiness Report Q4 2009
Business Monitor International, Aug 2009, Pages: 47
Business Monitor International's Nigeria Agribusiness service provides proprietary medium term price forecasts for key commodities, including corn, wheat, rice, sugar, cocoa, coffee, soy and milk; in addition to newly-researched competitive intelligence on leading agribusiness producers, traders and suppliers; in-depth analysis of latest industry developments; and essential industry context on Nigeria's agribusiness service.
The Nigeria Agribusiness Report Q409 expands upon issues covered in previous publications as Africa's third largest economy - and most populous nation - continues its efforts to diversify GDP earnings away from a disproportionate reliance on oil exports. 2009 has come with many challenges, not least the economic impact of a global recession on commodities prices. For a nation almost wholly reliant on 'liquid gold' exports, the result has been depressing. However, positive y-o-y growth is forecast for FY09, at 1.9% driven by the non-oil non-agricultural sector. The positive strides made in efforts to engender a more investment-friendly business environment, alongside government expenditure, should serve agribusiness development well through 2009 and beyond.
Nigeria's rice import burden is predicted to swell during the course of the outlook, as demand is forecast to double supply growth through to 2013. The rice import bill is currently thought to be around US$1bn, with Asia responsible for supplying the population with enough rice to make up the deficit. In order to address this situation, local company Notore Chemical Industries has begun initiating a project in Nigeria's main growing states. The initiative focuses on three main points: food security, job creation and income enhancement.
The Notore Foods subsidiary has so far agreed to collaborate with local governments to build production plants in Cross River State in the South East of the country and Taraba State in the East. The plants will be vertically integrated, allowing for a 20,000 hectare farm, as well as significant milling capacities. Notore predicts that around 70,000 jobs could be created in the two plants alone, while the population would take further strides towards self-sufficiency. It would be in the company's interests to start constructing the plants sooner rather than later as demand for rice is predicted to surge by almost 50% to 2013, widening the domestic deficit.
Such a dynamic is typical of the new wave of public-private investment initiatives that many believe will have a profound impact in shaping the future of Nigerian farming. These projects will only be successful if the private companies are given the necessary support from the state governments and afforded a favourable socio-political framework in which to operate. Transparency is key, as is the ability for the correct inputs to be easily acquired and dispersed to the relevant areas.
We forecast a particularly favourable outlook for Nigerian agriculture through to 2013, as reform efforts reap marked rewards. BMI can see positive supply and demand growth through the range of goods covered in their report; only beef consumption is predicted negative growth. Such statistics bode well for continued progress towards greater self-sufficiency as investors are increasingly encouraged.
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