Combating Food Insecurity in Nigeria

Recently, the Food and Agricultural Organization (FAO) expressed concerns that large food deficits continue to be a major challenge for the nation’s food system despite the potential to feed its expanding population into the coming decades, according to the Nigeria food system assessment profile carried out by the international organization. The assessment shows that the Nigerian agricultural production has been stagnated due to low yield, post-harvest losses, food safety concerns, climate change impact and unimpressive implementation of important policies. The recently published assessment highlighted the weaknesses in Nigeria’s food system, including low yields, post-harvest losses, food safety issues, and the effects of climate change, along with lax application of pertinent policies and laws. The organization recommended that the nation’s food self-sufficiency can be attained through production technologies and entrenching sustainable and inclusive food systems in the structure, governance, and administration.

With the current wave of Agricultural Technology (AgTech), it is essential that the government leverage AgTech to improve yields and post-harvest handling method to attain food self-sufficiency. AgTech through disruptive inventions, provide solutions to majority of the challenges in the agro sector. The adoption of these sustainability related technologies is largely dependent on government policies and regulations, and the enabling environment granted to these AgTech startups.

While the Nigerian government has been consistent in its concerted effort to improve the business and investment environment in Nigeria, through the enactment of the Nigerian Startup Act (“the Act”), for the development and operation of startups in Nigeria, and the Business Facilitation Act for the promotion of transparency and efficiency in the Business Environment, it is essential to create more awareness on the incentives and tax reliefs open to investors and entrepreneur in the agricultural sector.

The Nigerian Startup Act (the Act), under Section 19 provides for a startup investment seed and a Credit Guarantee Scheme for financing Labelled Startups. Section 37 requires the Secretariat to collaborate with the CBN to guarantee repatriation of investments by foreign investors in a Labelled Startup. Labelled Startups involved in the exportation of products and services eligible under the Export (Incentives and Miscellaneous Provisions) Act, will be entitled to export incentives and financial assistance from the Export Development Fund, Export Expansion Grant and the Export Adjustment Scheme Fund. Angel investors, accelerators, and venture capitalists who invest in startup are entitled to an investment tax credit equivalent to 30% of their investment in a startup, etc. Also, the Business Facilitation (Miscellaneous Provisions) Act 2023, (“the Omnibus Act”)
signed into law in February 2023 complements the objectives of the Nigerian Start-up Act
2022 in improving the investment and business environment in Nigeria. 

The Omnibus Act mandates transparency of Ministries, Departments, and Agencies (MDAs) to publish documentation requirements, timelines, cost, procedure, and redress mechanism in relation to permits, licenses, waivers, tax-related processes, filings, approvals, and services in line with the functions of the MDA. The Act now mandates Nigerian companies, which subsequently acquire foreign participation after the commencement of business, to register with the Commission within three months of such acquisition. This should close the gap whereby only companies with foreign shareholding as at time of incorporation were registered at the NIPC, instead of all companies with foreign participation.

There is a global competition for resource allocation, it is estimated that the nation’s population may hit 400 million by 2050, enhanced agriculture productivity through adaptation of new technologies and innovations is necessary to ensure food security and nutrition. The federal government having these in mind should encourage agricultural technology investment and innovation through effective policy and regulation implementation.