Agriculture is a major branch of Nigeria’s economy, and about 70% of the population engages in subsistence farming.1 The sector accounted for around 24% of total GDP in 2020, with crop production being the largest contributor.2 Major crops in Nigeria include cashew nuts, cassava, cocoa, groundnuts, maize, palm oil, rubber, and soybeans, among many others.
Agriculture was Nigeria’s dominant sector for most of the 1960s, with palm oil and groundnuts making up 47% of the country’s exports.3 The country was also a major producer of cotton and cocoa, and export cash crops accounted for 66.4% of its GDP. However, Nigeria’s agricultural sector has shrunk since the discovery of oil in the 1970s, which led to a heavier dependence on oil revenues.
The country is currently on a drive to revive its agricultural industry, with signs of success. Between 2011 and 2014, Nigeria raised food production by 21 million metric tonnes, and sharply reduced reliance on food imports.4
In 2016, the government of Nigeria launched the Agriculture Promotion Policy (APP), to build on its success. The APP aims to raise productivity in domestically focused produce such as maize, milk, rice, soybeans, and wheat. Other crops will be prioritised for export markets, including cashew, cocoa, cotton, sesame, and oil palm.
The APP encourages networking between private investors, farmers, and other stakeholders to enhance agricultural quality standards, and deepen the industry’s infrastructure. This agricultural revival creates opportunities for Singapore businesses and investors to find a foothold in the country.
Around 60% of Nigeria’s arable land remains uncultivated. This represents many opportunities for investment, from commodity trading and transportation, to the fabrication of small-scale mechanised technologies for on-farm processing.
1 “Nigeria-Agriculture”, Nations Encyclopaedia 2 Statista 2021 3 “Can Farming Ease Nigeria’s Woes”, Forbes, 8 June 2017 4 “Nigeria has potential to be Africa's agriculture leader”, Fresh Plaza, 23 November 2017
Nigeria is an attractive market for makers of fast-moving consumer goods, due to its sizeable population of around 190 million. Furthermore, 41.7% of the population is under the age of 15, and around 20% are aged between 15 and 24.5 This gives Nigeria the biggest youth population, just after China and India.
The country’s middle class is also growing, with Nigeria predicted to become one of the world’s top 20 economies by 2030. This combination of youth, size, and rising discretionary income present an attractive demographic to consumer goods businesses.
Consumer goods currently make up around 28% of Nigeria’s GDP as of 2020 and are the third largest contributor after agriculture and services.6
The rising demand for consumer goods matches the rest of the continent: at the Africa Singapore Business Forum (ASBF) on August 2018, panellists noted that young Africans are keen on global brands, and quality products are affordable prices. Africa’s spending is projected to hit S$5.5 trillion in a few years following 2018, on the back of strong consumer and business growth.
Despite growing consumption rates, manufacturing in Nigeria is still dominated by a single sector: food & beverage, which makes up 65% of consumer-oriented manufacturing.7
Singapore companies can tap this opportunity to fill import-dependent niches, such as apparel, home and personal care products, real estate, and transport vehicles. These goods are seen as necessities by the growing urban population.
By 2025, Nigeria is expected to drive 15% of Africa’s household consumption growth.8
5 CIA World Factbook 2022 6 Statista 2021 7 “Nigerian Industrial and Consumer Goods: Overview & Opportunities”, kpakpakpa, 16 May 2018 8 United Nations Department of Economic and Social Affairs, 2017
Nigeria has experienced rapid population growth and urbanisation – the country’s population has grown from 46 million in 1960 to about 190 million today, and is projected to hit 550 million in 2070.
The population surge brings requirements for large infrastructure investment, particularly in areas such as the inter-city highways and bridges, national power grid, and rail networks. However, many of these investments are still lacking due to low tax revenue.9
In particular, Nigeria faces a severe housing shortage, with the current deficit standing at around 17 million.10 The Family Homes Fund, an organisation tasked with creating affordable housing in the country, has earmarked around S$3.8 billion to create 500,000 new homes by 2023. Singapore businesses involved in construction, or real estate, can find opportunities in the country’s urgent home-building campaign.
During the Africa Singapore Business Forum in August 2018, panellists noted three key areas in which Singapore companies can contribute: the construction of affordable housing and serviced apartments, working with local partners in construction, and using the advantage of international debt financing and government support in the building of homes.
Nigeria spends a significant portion of its budget addressing infrastructure challenges – in 2016 alone, the Nigerian government invested around S$4.5 billion in infrastructure development.11
The country has also launched a Nigerian Infrastructure Fund, guided by a Five-Year Infrastructure Investment rolling plan. This aims to further boost infrastructure in the areas of agriculture, healthcare, motorways, power, and real estate. Singapore businesses in these sectors can find ample opportunities in Nigeria.
9 “Nigeria’s low infrastructure investment finds explanation in poor non-oil tax revenue”, Business Day, 30 January 2018 10 “Nigeria’s housing deficit hits 17 million”, The Guardian, 28 January 2018 11 “The absolute sense of infrastructure investments in Nigeria”, The Guardian, 27 November 2017
Nigeria is Africa’s largest oil producer, and the sixth largest oil producing country in the world. Nigeria produces only high value, low sulphur “sweet crude”, such as the country’s marker crudes Bonny Light and Forcados.12
Nigeria’s downstream oil industry has four refineries, with a maximum crude oil production capacity of 2.5 million barrels per day.13 However, the country often sees shortages of refined product, and still uses imports to cater to domestic demand.14 There may be opportunities for Singapore’s oil and gas companies to contribute their expertise in this area.
Nigeria’s oil production in 2020 amounted to 86.9 million metric tons and appears to have an even greater potential for gas. According to statistics obtained from the Nigeria National Petroleum Corporation, 3,004.06 billion cubic feet of gas was produced between November 2019 and November 2020, representing an average daily production of 7,642.69 million standard cubic feet per day.
Presently, Port Harcourt I, Warri I and Kaduna I are the major refineries in the country. By 2023, Nigeria is expected to lead refinery capacity additions from planned and announced refineries in Africa. 34 new-build sites are expected to start operations from 2019 to 2023 with a capacity of 2,135 thousand barrels per day (mbd).
12 Nigerian National Petroleum Corporation 13 Nigerian National Petroleum Corporation 14 “Overview of the Nigerian Oil & Gas Sector”, Business