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Potatoes Processing Investment Opportunities in Nigeria

Brief Overview:

Nigeria is among the major producers of potatoes in Africa. With an estimated 293,240 hectares of production, it is one of the largest potato production areas in the continent. The key areas that produce potatoes in Nigeria includes but is not limited to Plateau State, Kaduna State and Benue State.Potato processing

The potato production season is divided between a wet season from April to September.  The dry season farming starts from September till March when potatoes are irrigated. In addition, there is some limited production in Kano state, in the northern part of the country. Potatoes farming season in the area takes place during the dry colder period, from October till January (source: Wageningen Economic Research Report 2019-119).

Drivers of Demand.

Potato consumption in Nigeria is on the rise and it is likely to continue in that trajectory due to the prominence of potatoes as part of stable food. Consumer demand is shifting from fresh tubers to processed products. There are greater quantities of potatoes being processed to meet the rising demand for convenience food and snacks.

The major drivers behind this trend include expanding urban populations, rising incomes, diversification of diets, and lifestyles that leave less time for preparing the fresh product for consumption. The Irish and the sweet potato are consumed nationally but Irish consumption is higher with approximately 7kg per person per year (source: Wageningen Economic Research Report 2019-119).

Value-Added Opportunities

  • Production and packaging of local potato delicacies as easy-prepare meals
  • Production and packaging of potato shelf stable snacks and replacement of imported chips (French Fries)
  • Development of high-value products such as potato flour and industrial starch
  • Exporting Made in Nigeria products tariff-free to over 1.4 billion consumers in Africa under the recently launched African Continental Free Trade Area (AfCFTA)
  • Exporting Made in Nigeria high-value products tariff-free to the USA market under the Africa Growth & Opportunity Act (AGOA)

Challenges & Investment Opportunities:

The prevalent type of potato processing takes place in restaurants and homes where fresh potatoes are made into chips. There is virtually no industrial scale potato processing plant in Nigeria (Gildemacher and Belt, 2019a). All shelf staple potato products and large volumes of French fries consumed daily are imported into the country.  However, Feikop is a local processor of potato flour and starch while Lovely Potato Chips is active in artisanal processing, making crisps for the local market.

Another key challenge is the limited storage facilities to stem post-harvest waste and lack of short-term storage capacities for unsold potatoes. These challenges mentioned herein and  others present ample investment opportunities across the country.

Why Nigeria?

Nigeria is a gateway from which to trade with other rapidly developing economies in Africa and United States of America. Nigeria’s massive 200 million consumer market is supported by a strategic location, an educated and service-minded workforce plus Government-backed generous incentives for new foreign investors.

Six key reasons why you should consider Nigeria as your next investment destination.

  • Biggest economy in Africa with a population of more than 200 million people
  • Competitive young and agile workforce
  • Key signatory in the African Continental Free Trade Area (AfCFTA)
  • Major beneficiary of the Africa Growth & Opportunity Act (AGOA) which allows Nigeria agro-processed products tariff-free access to the USA market
  • Nigerian Investment Promotion Commission Act ensures that investors can repatriate 100% of profits and dividends
  • 100% ownership of companies is allowed in all sectors apart from Oil & Gas
  • Other incentives include a favourable Companies Income Tax, Pioneer Status Grants, Free Trade Zones and Tax Relief for Research and Development.

Source: Nigeria Investment Promotion Commission (NIPC)

 

How OctoberFirst Consulting can help:

Consumer Analysis: The solution applies quantitative methodology to gather customers relevant characteristics such as:

  • Products/services customers buy
  • Where customers buy products/services
  • Existing gaps in the market

Competitive Analysis: The analysis helps you determine:

  • Potential advantages and barriers for new product/service.
  • Uncover active and leading competitors in the market
  • Monitor how direct and indirect competitors are executing tactics in Marketing, Pricing, and Distribution

Feasibility Analysis: The solution enables you identify and assess:

  • Opportunities and threats present in the new market
  • Resources required to launch business
  • Prospects for success

 

For more information contact:

Mr. Frank Aneke.

Email: Frank@octoberfirst.com.au

Mobile: 0401 808 739

Online: octoberfirst.com.au

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