Simmonds: working closely with customers

Simmonds: working closely with customers

Nigeria at forefront of investments

Nigeria has ample amount of fertile soil and natural and water resources which are promising factors for the UAE businesses looking to invest in its agricultural industry, says Jamie Simmonds, CEO and MD, The Access Bank UK

January 2018

Food security is an ongoing concern in many countries around the world, and the UAE is no exception. Studies show that despite the fact that 83.7 per cent of land in Nigeria is designated as agricultural land only 40 per cent of it is arable, thus highlighting the importance of investing in the agricultural sector of Nigeria, which is at the forefront of global discussions today, says Jamie Simmonds, CEO and MD, The Access Bank UK.

Hisham Abdullah Al Shirawi, the chairman of Economic Zones World in Dubai, has also encouraged UAE investors to consider the Nigerian agricultural sector as he believes that this will help the country combat serious issues like food security, he recalled.

Nigeria has ample amount of fertile soil, natural resources and water resources which are promising factors for the UAE businesses who are looking to invest in the agricultural industry of Nigeria. “In order to support investors from this region to trade effortlessly from Asia to Africa, The Access Bank UK has established a licensed, fully-functional branch in Dubai. Through this branch, The Access Bank UK has been working closely with its customers, based in the UAE, to support them in their trade and investment in West Africa, specifically Nigeria,” Simmonds said.  

The Nigerian agricultural sector is the country’s largest employer, providing work for about 70 per cent of the country’s labour force and accounting for 23.9 per cent of its gross domestic product (GDP). Recent studies conducted by the World Bank show that the stable growth of the sector will be critical to the country’s future.

Blessed with an abundance of land and water resources, Nigeria’s agricultural sector has high potential for growth. In the recent past, due to Nigeria rising as a key global producer of hydrocarbons, the agriculture industry was given less importance. However, this is now changing with increased recognition of the industry and its potential for improvement, and hence, government has made its development a high priority. These steps have ensured that the Nigerian agricultural sector is poised for investment both at international and domestic levels, he added.

According to the UN Conference on Trade and Development (UNCTAD), the country’s largest agricultural export is the cocoa bean. In 2015, the crop brought in revenues of $870.6 million. Nevertheless, the investment climate for the agriculture industry was not attractive with little to no incentives for investors. Hence, the government implemented several strategies to change this. The federal government of Nigeria authorised the Nigerian Investment Promotion Commission (NIPC) to give them advice on how to enhance the investment climate in Nigeria for investors coming from the UAE.

NIPC provides investors with services for grant of business entry permits, licenses, authorisation and incentives in a one-stop shop environment. A foreign investor registered with NIPC is guaranteed unconditional transfer of dividends or profits attributed to the investment, payments in respect of loan servicing where a foreign loan was obtained and remittance of proceeds and other obligations in the event of a sale or liquidation of the investors’ business or any interest attributable to the investment. 

In November 2015, the government launched the Anchor Borrowers’ Programme, a scheme that allows farmers to borrow at interest rates below 10 per cent. Given that the monetary policy rate stood at 12 per cent in March 2016, this represents a significant discount to farmers. In October 2015, the government announced a $25 billion national infrastructure fund to tackle the substantial losses incurred by the sector due to shortcomings in infrastructure.

Other incentives that have been implemented by the government to encourage investment in agriculture include finance credit, tax holdings, reduced customs charges on imported inputs and agricultural insurance scheme. In addition, the Nigeria Immigration Service (NIS) recently introduced a liberalised online Visa on Arrival (VOA) facility for the public, which will help UAE investors to make timely decisions on potential investment opportunities in Nigeria as well as eliminate unnecessary procedures that have been in existence for a very long time.

Even though Nigeria still benefits significantly from the oil industry, the increased focus on the agricultural sector will boost the country’s GDP and there is a potential that this sector will replace oil someday. This is why investors are encouraged to take a proactive effort to consider investing in Nigeria, especially in the agricultural sector, and this is where banks like The Access Bank UK can help in bridging the gap of investing and trading between the UAE and Africa.

More Stories