How Kaduna aims to develop the agricultural value chain

Kaduna is actively seeking to attract investors to the agriculture sector, promoting a number of opportunities. The Kaduna Investment Promotion Agency (KAPIDA) has identified about 2.5m ha of uncultivated land with abundant water resources to support commercial farming, livestock and fishery businesses, and welcomes investors to take advantage of the state’s potential. Indeed, the economy is primarily driven by agriculture, with the sector employing more than 42% of the workforce across 1.3m households, most of which are small-scale farmers.

The state’s main crops include maize, yam, rice, guinea corn, soya bean and peanuts. Many cash crops are also cultivated, including ginger, shea butter and tobacco. Most agricultural output remains in raw form, but recent years have seen increased investment in value-added production. There are a number of important agro-processing plants in Kaduna making dairy products, soft drinks, flour, groundnut oil and cigarettes.

The state Ministry of Agriculture and Forestry oversees Kaduna’s agricultural policy. It has prioritised boosting private sector involvement, with policies such as eliminating government fertiliser distribution, and a liberalised seed policy seeking to enable the entrance of more private actors. Other policies underlying the agricultural transformation agenda include increasing access to land and financing, creating agri-business entrepreneurship centres, revising the Land Use Act to enable easier access for investors and rapidly expanding irrigation facilities.

Tomatoes

The tomato segment is one of the most attractive for investors due to the favourable climate, skilled manpower – the state possesses a number of agricultural colleges and agriculture faculties – and federal legislation, most significantly measures limiting tomato paste imports. Since the implementation of reforms aimed at improving the ease of doing business in the state, a number of domestic and international companies have invested in processing plants. In 2019 GB foods, the Spanish multinational food producer and owner of the Gino tomato paste brand in Nigeria, established a processing plant that has a capacity of 30 tonnes per day. The company sources the tomatoes from a 30-ha pilot farm, where it experiments with 15 different varieties. The farm has demonstrated an average yield of 40 to 50 tonnes per ha. More recently, in 2020 Tomato Jos, another company seeking to add value to the tomato industry, raised $4.2m in a Series-A investment round. The start-up works with smallholder farms, and will use the funds to fully transition into processing and distributing tomato products, helping to fill local supply-demand gaps.

Rice

Rice cultivation and processing is also poised for expansion, with the federal government providing a number of incentives in recent years to boost domestic production in order to ease the reliance on imported rice. The state is one of the largest producers of the commodity in the country, providing over one-fifth (22%) of Nigeria’s total output. With food security becoming even more important amid the Covid-19 pandemic and associated trade disruptions, rice producers will likely receive additional support.

Soya Bean

Meanwhile, Kaduna produces 27% of the country’s soya bean, making it the second-largest producer after Benue State. As the crop is an important component of poultry feed, there is potential for expansion, given the significant growth in the poultry segment in recent years. As the largest destination for soya bean producers in the north, Kaduna is set to become an important player across the value chain. Singapore-based agricultural multinational firm Olam commissioned a hatchery and feed mill in Chikun in 2017, and has continued to invest in projects in Kaduna. The Olam poultry facility – sourcing 75,000 tonnes of soya bean and 150,000 tonnes of maize from local farmers – is the largest in West Africa.