5 Keys to the Success of Nigeria’s Growth

John Coumantaros shares his perspective on what’s most important to the development of Nigeria and how investors should approach business.

It’s said to be the “last frontier for development” and a place that “holds the potential to meet the world’s food security needs,” sub-Saharan Africa. For many, it’s a place they’ve only read out or seen in the movies, but for John Coumantaros it’s a land of opportunity.

Coumantaros has been involved in business in Nigeria for the past 30 years, most recently as the chairman of the board of directors for Flour Mills of Nigeria Plc. (FMN). He’s a visionary and student of international trade, logistics, manufacturing and industry. During the recent African Trade Exchange, USSEC’s Kevin Roepke, regional director for sub-Saharan Africa, had a chance to sit down with Coumantaros. Here are the top five take aways.

1 Nigeria’s population is growing and fast. Coumantaros said FMN is celebrating its 60th anniversary this year. “When we began, the country was only 35 million people, and today it’s over 200 million,” he said. “It’s growing at 2.5% (5 million people) per year. Therein lies the great opportunity and the great challenge.” Additionally, he said there has been a large shift from rural living to urban living. Coumantaros said, since 2006, Nigeria has gone from 62% of the population living in rural areas to 48% today. This is a tremendous movement, and creates a great necessity for food security, he said, adding that for 60% of the population, the median age is 18. Jobs, food, education and medical care are essential going forward.

2 The economy needs more than oil and gas. “I’m not sure what we can expect in terms of volume and price going forward,” Coumantaros said. “Nigeria has to rely less on that as a primary source of income going forward. It has to start growing in other sectors.” In developing and diversifying, inward supply chains must be built to create a virtual cycle of GDP growth. “As agriculture links with industry (internally), you are creating the raw materials that feed the factories that produce the products that are then bought by the farmers who have more income because they are growing crops,” he explained. “The link between agriculture and industry is critical; it’s critical for the future of Nigeria.” That’s where FMN spends much of its focus. “This is where I think there is tremendous opportunity for American companies to invest and grow up and down each value chain, food and other (medial, education, infrastructure),” he said.

3 An increasing population means a growing need for protein. Essential to the growth and productivity of any nation is the supply of and access to protein. Coumantaros pointed out that Nigeria lags not only behind the rest of the world, but also the rest of Africa in its per capita protein consumption, annually consuming 1.9 kg of chicken, 65 eggs, 5.9 kg of meat and 13.3 fish. So that Nigeria may nourish and feed its people, Coumantaros said it must increase yields – it must produce more. Today soybean production is at 700,000 tons annually, maize is at 11 million tons, followed by sorghum at 8 million tons, millet at 4 million tons and cowpea at 3.7 million. “These numbers have to grow at least 5% a year just to keep pace with the population, not to mention the growth of per capita consumption,” he said.

4 Increasing yield depends on more than seed. Average yields for soybean production in Nigeria range from about 1 ton to 1.3 tons per hectare (15-20 bushels per acre). This is very low, Coumantaros said, noting that Nigerian farmers should be able to achieve yields of 3-4 tons per hectare (44-60 bushels per acre). He said first, the country must build and grow its internal seed capacity. Second, he said, there are many simple agronomic practices, such as the application of fertilizer and spacing of crops, that if done correctly, can almost double yields. “These are the efforts we are undertaking with our partners,” Coumantaros said. “We are working with our partners and with Corteva to develop yield, agronomic practices and aggregation.” Four years ago, he said the government privatized strategic grain reserves. They mostly laid idle. Now they’ve been privatized and put into play. They have capacity to put feed mills there. These can be very good commercial hubs that can engender farming but also connect agriculture to manufacturing.

5 Align business with the needs of the country. Finally, Coumantaros said he believes the key to FMN’s success is that they’ve always aligned the businesses’ priorities with what the nation needs. “We’ve asked ‘Where is it today and where is it headed? What does it need and what are its natural resources?’” he said. “You also must have the perseverance and determination to be there for the long-run. Do the right thing and have the fortitude and commitment to stick with it through the obstacles. There will be challenges. It’s not just what you take but what you can give that will help the country grow.”