NIGERIA Invest in 2012-13 - Newsdesk Media

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OIL, GAS AND MINERALS
The new Lekki Free Trade Zone has already attracted more
than a hundred foreign and domestic investors
The CBN estimates that Nigeria is host to more than
40 million hectares of arable land, but less than 60 per cent
of it is cultivated. Moreover, fertiliser use per hectare stands
at around 10 kilogrammes, compared to a global average of
150 kilogrammes. Despite such vast agricultural potential,
Nigeria’s food import bill stood at N25 trillion ($154 billion)
in 2010 – N356 billion ($2 billion) of which was spent on
importing rice. Decades of neglect has condemned the
country to the status of a net food importer, when it should
be Africa’s biggest net food exporter.
Investments in agriculture
Nigeria’s food self-sufficiency drive, which began under former
president Olusegun Obasanjo, has accelerated markedly under
Jonathan, and is now witnessing substantial new investments
in agricultural extension, increased fertiliser production, a
significant expansion in rice-milling facilities, and the
development of new agro-processing industries.
The development of free
trade zones will benefit
manufacturing output
INvESt IN NIGERIA 2012-13
In addition, the CBN has also earmarked $500 million
in new lending to the agricultural sector, aimed at helping to
unlock more than $3 billion in new private-sector lending
to agriculture over the next decade. Lending to agriculture
currently accounts for two per cent of total lending –
compared to six per cent in Kenya. The CBN wants that figure
to more than triple to seven per cent by 2020. At present,
Nigeria boasts a mere 30,000 tractors to work more than
40 million hectares of land. No other statistic captures the
scale of the sector’s past neglect – or the opportunity that now
exists to radically transform the country’s agricultural potential.
Like most other emerging markets, Nigeria has
attempted to augment its manufacturing output through the
development of free trade zones – of which there are some 24
currently in operation, admittedly with mixed success. More
recently, however, it has succeeded in attracting the attention
of China, Saudi Arabia and India, who are spearheading
substantial investment into two new free trade zones designed
to boost Nigeria’s manufacturing output.
Nigeria and China are currently developing the new Lekki
Free Trade Zone on the eastern edge of Nigeria’s commercial
capital, Lagos. The $5 billion, 3,000-hectare, first phase of
the development – which seeks to reduce the country’s
dependence on imported products – has already attracted
more than 100 foreign and domestic investors, including
Chinese electronics, pharmaceutical and heavy machinery
firms, which are eager to build production and assembly
facilities in the zone.
The proposed new Koko Free Trade Zone in Delta State,
which is backed by a joint venture between the Nigerian
National Petroleum Corporation and Saudi Arabia’s Xenel
to build a new petrochemical plant, along with plans by
India’s Nagarjuna Chemicals to build three new fertiliser
plants, represents a significant break with the past. The
Lekki and Koko projects are major investments that seek
to reverse decades of decline in manufacturing. They are
indeed ambitious. But they also represent a mark of
confidence in Nigeria’s long-term future by industry
leaders who have a proven track record in developing
effective free trade zones. ■