HOW TO START AN AGRICULTURAL BUSINESS IN NIGERIA

Today, I will be discussing on how to start an agricultural business in Nigeria. I believe my post would serve as a valuable information especially to those who intend going into agriculture. On my blog, I have written several articles on agriculture because I believe it to be a great source of revenue.

I have been involved in land transactions with foreigners wishing to invest in the agricultural sector, I have also attended several meetings and gathered vital knowledge in this subject area. Hence this article:

Over the years, the Federal Government of Nigeria has provided support to agriculture through several policies; from local farmers to foreign investors, the Nigerian government now provides active support to return the country to its former pride (agricultural dependence). To achieve this the Nigerian government has mitigated some of her policies, making it easier for local and foreign farmers to do business in Nigeria. As part of this mitigated policy; is tax reliefs on agricultural produce:

For any agricultural business venture, a tax relief is granted for 3 years with specific conditions;

A 10% tax relief for agricultural business ventures in the first year of purchase of plant and machinery used for agricultural Production and manufacturing, in addition to the normal initial and annual allowances;

There are also investment allowances granted to agricultural business ventures established in rural areas lacking key infrastructural facilities.

Six tips on how to start an agricultural business in Nigeria.

1. Determine the aspect of agriculture to invest in:

An important part of starting any agricultural business is to define its scope. Agriculture is a broad industry with various sectors. Do you want to have vegetable farm? A livestock farms? Do you plan to grow acres of cashew, cassava or cocoa (perennial crops)? Or a mixed farm? I.e. an operation of varieties of livestock and crops. All these are questions to be asked and answered before setting up an agricultural business. This, in my opinion, should be the first step for any investor going into the Agri-business. Outlining your goals allows for proper planning.

2. Outline your costing, profitability and operational strategy (feasibility studies)

When developing your feasibility studies, the questions that should come to mind are:

• How much capital will I be investing?
• Is it a long or short-term investment?
• How much returns should I be expecting in an estimated period?
• What are the strategies to adopt for maintenance and improvement?
• What are the strategies to adopt for sales of farm produce; local or international sales?
• How will I maintain or improve natural resources and the immediate environment?
• What is the best labour strategy to adopt?

Each of these questions allows you to assess and measure the level of risk and advantages involved.

3. Write a business plan

Does agri-business need a business plan? Yes. The presence of a business plan in agri-business is probably more important than most businesses. This is not to say that a business plan is not important in any other business.

Agriculture is more than planting and harvesting, it does not only give wealth to an individual but also to a nation, and as such, should be taken seriously.

A business plan helps to explain the idea behind your business, how your products will be sold, identifying who your target market are and explains how the company plans to sustain the market, most of all, it depicts professionalism and business venture viability to investors.

4. Get a business name, license or permit

Getting a business name, license or permit is the legal aspect of setting up an agricultural business in Nigeria. A business name, also known as a trading name i.e.  a name or title under which a person, or other legal entity trades. When you register a business name, it makes your business a corporate entity.

It is also required that for a company with foreign participation to undertake any business in Nigeria, such company must obtain a business permit from the Ministry of Internal Affairs. In other words, a company wishing to employ expatriates must obtain an Expatriate Quota position for each expatriate it wishes to employ. It is important to note that opening a business in Nigeria basically requires license or permit that will make the business officially and legally recognized. For companies wishing to employ expatriates, contact an immigration lawyer for advice and consultation.

5. Get an export license

To yield more profit from agricultural produce in Nigeria, export is required. There are certain procedures to follow to get an export license in Nigeria.

The first thing you need to do is register a business name, like I mentioned above, having a business name gives legal credibility. The body in charge of granting an export license is the Nigerian Export Promotion Council (NEPC)

Below are steps and requirements for getting an export license from the NEPC

1. Exporters Registration Form from NEPC
2. Submit your completed registration form to the NEPC, attaching the following documents:

• Photocopy of Company’s Certificate of Incorporation;
• Certified True Copy of Memorandum and Articles of Association
• Alternatively, contact a lawyer for advice and consultation.

6. Identify the best geographical location.

The 5 tips mentioned above is inconsequential without land. For every agricultural business venture, a land is required. However, getting a land is not all that is needed for an agriculture business venture. There are some other factors to be considered.

• Determining a location with the best climate condition suitable for your desired crops.
• Ascertain the topography of the area
• Determine the soil type as it suits your desired agricultural produce e.g. cashew and cocoa do well in sandy-loams; Yam and Cassava do well with sandy clay.

 All these and other factors are necessary when choosing a land for agriculture.

It should also be noted that your desired crop or livestock production necessary to achieve your investment goal might not be feasible in your present geographical location, hence sourcing for areas with favourable peculiarities is advisable. According to statistics, foreign investors have constantly migrated to Nigeria with the aim of investing in her agricultural sector; this is because most of the crops that are of high demand and commercially viable around the world thrive in Nigeria due to the availability of unexploited land, absence of natural disasters, affordable labor, favorable government policies and incentives, favorable climatic condition and topography.

Man’s basic need of food, shelter and clothing is heavily dependent on agriculture which is why there is no wrong time to invest in this sector as there will always be a market. As the world population grows so does the need for agriculture.

Invest in Agriculture, Invest in Nigeria.

For further assistance or consultation on this article or other issues, feel free to contact me. Email ibejulekkilawyer@gmail.com or Call 08034869295. Click to read previous articles