AGRIBUSINESS IDEAS FOR DIASPORA INVESTORS

Agriculture business ideas. Photo of a farm in Africa.
Agric Business Ideas

Agribusiness ideas for diaspora investors and for entrepreneurs looking to invest in Nigeria.

If you are looking for agribusiness ideas or investment opportunities in agribusiness in Nigeria.

This article should be of interest to you. Many people in the diaspora often ask about investment opportunities back home.

What agribusiness investment opportunities exist in Nigeria for people living abroad?

There are numerous opportunities for diaspora investments in Nigeria. A very profitable one is agribusiness.

This article explores agribusiness investment opportunities and the reasons why they are worth your consideration.

By the end of 2018, the Nigeria’s economy experienced a GDP growth of 0.8% to 1.9%.

The growth was supported by key sectors of the economy namely; agriculture, ICT, manufacturing and transport.

GDP Trends Nigeria. World Bank.
Source: World Bank GDP: NIgeria

Agribusiness ideas for diaspora investments

Are you are living abroad and looking for investment opportunities?

These three sectors might be of interest to you. Better still, you might be interested in ideas that are built around these three key areas. However, if you are interested in agribusiness ideas and opportunities in Nigeria, then please continue reading.

Nigerians living outside the country are often looking for opportunties to invest in Nigeria.

A 2017 diaspora research found out that among 208 Nigerians in diaspora 57% preferred to start their own businesses in Nigeria.

Those who preferred to invest in entrepreneurial start-ups or established entrepreneurial business each made up 13% of the total.

In addition, the top three preferred sectors for investment as shown below are agriculture (25%), professional services (18%) and real estate (16%). However, ICT ranked lower at about 6%.

The higher preference for investment in agriculture suggests that more people abroad; are interested in taking advantage of the growth in the sector.

Diaspora research Akiode 2017. Bar chart.
Source : Akiode (2017)

Agribusiness ideas for diaspora investors and entrepreneurs

There are numerous possibilities for investment in agribusiness. Here are some of the agribusiness ideas and the justifications for them.

Processing and packaging of agriculture produce

One of the key problems to address in the agriculture sector is the challenge of shelf life of agriculture produce.

Also, lack of proper storage contributes to seasonal price fluctuations.

Therefore, in other to help address this problem, you could look into producing low cost storage bags for farmers and wholesalers.

Here are some of the ways that the processing and packaging of agriculture produce can add value to agriculture produce.

  • Firstly, significant value can be added to raw produce without changing its form through cleaning, grading and labelling. The packaged products can then be sold from farm to the supermarket.
  • Secondly, another way businesses can add value is by addressing the shelf problem.
  • That is, through the use of processing techniques that fortify agriculture produce with micro-nutrients and through sealed packaging.
  • Thirdly, a business that produces low cost storage bags will be also be addressing the storage problem in the market.
  • However, in order to be successful, such businesses would need to be able to combine low cost production with efficient distribution system.
  • In addition, you might be interested in a business that targets meals for infants and children. These category of consumers are vulnerable to under-nutrition.
  • Your business could address concerns about how children with poor digestion can enjoy products such as cowpeas, wheat and maize.

These are examples of agribususiness ideas in the areas of processing and packaging.

Online markets that connect farmers to consumers

Another agribusiness idea is through creating an online platform that connects farmers to consumers.

According to a mobile report, Nigeria is one of the countries that will push mobile subscribers – along with India, Pakistan, Indonesia, USA and Brazil.

These countries will push 700 million new mobile subscribers.

This will increase global reach of mobile subscribers to 6 billion by 2025.

Therefore, as an entrepreneurs or an investor, you can take advantage of the large Nigerian market as well as the growing use of smartphones in the country.

The internet makes it easier for businesses to reach a wide market.

Therefore, by building a website and/or an app that connect farmers with consumers.

You’ll be contributing to solving the problem of access to markets, that affects many rural farmers.

This business idea involves developing an online platform that would be used for placing orders for farm produce.

This type of business would be of interest to those who are looking to establish a business that serves a local market.

Through an effective deliver of fresh produce from farms to the consumers.

However, you’ll need to ensure that you meet the regulation requirements.

In addition, you’ll need to invest in appropriate technologies for online security as well as an efficient delivery process.

Financial technology (FinTech) agribusiness ideas

FinTech refers to the various startup business models, that combine finance and technology to offer products and services.

There is a big market for your business, if you choose to invest in the financial services sector.

According to the Enhancing Financial Innovation and Access survey.

Out of 93.5 million adult population in Nigeria, 36.9 million are financially excluded.

These are mainly petty traders, small scale enterprise owners, farmers and artisans who live in rural and urban areas.

This means that they do not have access through formal or informal finance providers.

Basically, such people rely on loan/gift from friends or family, loan from employers as well as remittances via a friend/family member.

Besides, 11.2 million Nigerians are ‘unbanked’ i.e. they do not have any bank or other formal products apart from informal services and products.

Out of the adult population in Nigeria, 11.5 million rely on other formal institutions and financial products not supplied by commercial banks such as insurance companies, microfinance banks, pension schemes or shares.

Therefore fintech startups are filling these gaps in the market.

If you invest in a fintech startup, you can target the agricultural sector to specifically lend to small-scale farmers and other small businesses in that sector.

This will help to provide access to capital which is a difficult challenge facing farmers.

A great idea is to digitalise the good old informal lending principle of individuals lending to each other.

This peer-to-peer lending can help drive financial inclusion and grow your fintech startup.

Harvest cycle funding agribusiness idea

This is another technology driven agribusiness idea in which the entire process happens online.

This might be of interest to you if you are a diaspora investor or middle-class Nigerians who is interested in agribusiness but you don’t want to get involved the daily routine of farming.

The harvest cycles are insured, this means that your investment is protected.

As an investor, you can earn a share of the profit at the end of a harvest cycle which can last between five and six months depending on the crop.

Although as an investor you can visit farmlands if you wish to, no physical interaction is required.

Agribusiness export idea

Initial export venturing can be a daunting task if you are just starting. Especially for small and resource deficient businesses.

Many SMEs in Nigeria focus on domestic market activities rather than export.

This is because of reasons such as customs and regulations challenges, lack knowledge about international markets and lack of expertise in exports.

However, there is a large market for agriculture export in Nigeria.

One reason is because of the large diaspora market and the demand for Nigerian food abroad.

This would be a good place for you to explore if you are in the diaspora.

This is especially true if you have a good knowledge of both the Nigerian and the foreign country’s market.

In addition, if you are able to ensure that your products meet international standards. And you can obtain international quality certificate.

However, you may need to be innovative in order to cover for the slack in terms of customs processing times e.g. by exporting non-perishables.

If you cannot handle the challenges of exporing formally, you can build a client base online.

This can be on your website or on other online platforms.

You can then informally export products individually to your customers.

The business export channels of UPS, Post Office or Fed Express would be useful if you are exporting informally.

Conclusion

These are some examples of agribusiness ideas and opportunities for you if you live in the diaspora and want to invest in the agriculture sector.

This is by no means an exhaustive list and it is not meant to be one.

Just like you will find in every aspect of life, there will already be someone doing what you think is new.

Innovation simply means to bring a change no matter how little.

It is that little change – the value that you are adding that makes the big difference.