agricultural machinery, parts and tractors market in nigeria

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total destabilization in the agricultural sector. Total market size and imports Despite the earlier Government’s apathy towards agriculture, there have been a few large scale-farming ventures in Nigeria, which operated profitably, particularly for the production of groundnuts, fruits, cassava, yam etc. notwithstanding the earlier Government’s apathy towards the country’s agricultural sector. According to import statistics for the year 2001, the total market for agricultural machinery and tractors was estimated to be around US$.39 million, with hundred per cent of the market dominated by imports. The major suppliers to this market are France, Germany, Togo, India and U.K. Given below is the break up of imports from major countries during the year 2001 for agricultural machinery & parts and tractors:- Countries Export to Nigeria (US$) France 11.00 Million Germany 7.82 Million Togo 5.56 Million U.K. 2.48 Million (Source: Federal Office of Statistics, Nigeria) An apparent absurdity can be noticed in the above table that, Togo, a small country bordering Nigeria, with no manufacturing or industrial base has exported Agricultural Machinery and Tractors worth US$.5.60 Million to Nigeria during the year 2001. But, the reality is that Togo is a country dominated by France and a large chunk of exports are directed to Togo which are meant for re-exports to various West African countries. This reason would substantiate the large volume of import from Togo into Nigeria. India’s position India is already enjoying a good share of the import market of Agricultural Machinery and Tractors in Nigeria, as may be seen from the above table. India’s exports of these items have been growing steadily during the last several years. In 1999-2000, India exported tractors and agricultural equipment worth US$.2.8 million, which
ose to US$. 3.5 million in 2000-2001. The period 2002-2003 further demonstrated an increase in the exports by 20%, amounting to US$.4.2 million, which accounted for about 11% of Nigeria’s total market of tractors and agricultural machinery and parts. The reasons for the acceptability of Indian agricultural machinery and tractors can be attributed to the quality of the products and price competitiveness. Moreover, Indian machinery is suited to the African environment and involves less operational cost. Future prospects The Government of Nigeria has since realized the importance of agriculture as the mainstay of its economy and therefore, has started pursuing various policy initiatives for reviving and developing its agricultural sector, which is gaining momentum. The smooth transition from democracy to democracy for another term of four years in 2003 has boosted the Government’s initiatives in this regard. The Government has imposed 100% duty on the importation of rice into the country and simultaneously, considering implementation of various schemes and incentives for promoting importation of technology and machinery/equipment for development of the agriculture sector. Some of them are given below:- § 2.5 per cent tariff reduction on importation of agricultural inputs particularly chemicals, agric machinery and spare parts § 7 years tax relief for pioneer industries engaged in large scale cultivation of food crops § Benefits for locating in Free Trade Zones and EPZ especially for palm, rubber, cocoa etc. § Liberalisation of land acquisition for large scale farming § Agricultural credit guarantee scheme, which guarantees agricultural credit and loans to small and medium farmers. § Nigerian Agricultural Insurance Corporation which provides risk cover for crops against natural hazards § Nigerian Agricultural Cooperative and Rural Development Bank to provide soft finances § Creation of liberalized trading environment as incentive for investment on agriculture § Research and development grant of upto 120 per cent of expenses § Local value added 10% tax concession for five years § Commercial banks have been directed to earmark 10% of the profit before tax, for development of agriculture sector, by way of loans and finances at concessional rate of interest. It is expected that the new policy initiatives would create avenues for the Indian exporters to increase the range of their export of agricultural machinery and tractors to Nigeria. However, in the changing environment, China is expected to emerge as the immediate
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