The commencement of onion harvesting across Northern Nigeria is once again drawing attention to the region’s huge agricultural potential, but Kano is increasingly at risk of remaining a supplier of raw materials while Lagos captures a larger share of the value generated from processing them.
Despite Kano’s strategic position as one of Nigeria’s major agricultural commodity centres and its hosting of the Dawanu International Grain Market, regarded as the largest commodity market in West Africa, an increasing number of agro-commodity companies are moving their cleaning and processing operations from the state to Lagos.
The development means that commodities produced or purchased in Kano are increasingly being transported to Lagos for cleaning, grading, packaging and other forms of value addition before reaching consumers or export markets.
For Kano, the concern is not simply the movement of equipment out of the state. It is the potential loss of jobs, investment, industrial activity and the wider economic opportunities that come with processing agricultural commodities close to their source.
Mohammed Umar, a commodity trader at Dawanu International Grain Market, told BusinessDay over the weekend that at least five companies had relocated their commodity-cleaning machines and related processing facilities from Kano to Lagos while continuing to source substantial quantities of agricultural commodities from Kano.
According to Umar, the companies collectively employ more than 600 Kano indigenes and purchase commodities worth more than N70 billion, underscoring the scale of the economic activity potentially being shifted out of the state.
‘The issue is bigger than individual businesses. It is about jobs, investment, value addition and the future of Kano’s agro-commodity industry,’ Umar said.
He urged the Kano State Government and governments across northern Nigeria to examine why Lagos is attracting and retaining processing investments that northern states are struggling to keep.
Umar identified infrastructure, electricity, logistics, industrial facilities, storage and access to finance as areas that require greater attention if Kano is to compete effectively for agro-processing investments.
‘The government needs to find out what Lagos is doing that Kano is not doing,’ he said.
The emerging pattern is creating a sharp contrast between the roles played by Kano and Lagos in the agricultural value chain.
Kano and other northern states have the farms, traders, commodity markets and raw materials, while Lagos increasingly appears to be positioning itself to capture activities further down the value chain, including processing, packaging, distribution and access to wider consumer and export markets.
As the onion harvest begins, the difference becomes more evident.
Northern farmers produce large quantities of onions, while traders aggregate the produce and move it through established markets. But without sufficient modern facilities for cleaning, sorting, storage, packaging and processing, the region has limited capacity to retain the additional value created after the commodities leave the farms.
Lagos, meanwhile, offers investors access to a broader commercial ecosystem that combines industrial activity with major transport and distribution networks, financial services, consumer markets and proximity to maritime export infrastructure.
For companies processing agricultural commodities, such advantages can influence where they choose to locate their plants, even when the raw materials are sourced from hundreds of kilometres away.
Umar said Kano could not rely on the strength of its commodity markets alone to retain processors.
‘Having the raw materials is not enough. We need to ask why investors are taking their machines to Lagos while continuing to buy their commodities here,’ he said.
The relocation of processing equipment could gradually redefine Kano’s role in the agricultural economy from an integrated production and processing centre to primarily a raw-material and trading hub.
That shift could have direct consequences for employment.
Processing plants generate jobs not only for machine operators and technicians but also for transporters, warehouse workers, packaging suppliers, artisans, maintenance contractors, food vendors and other service providers.
When the plants move, a significant portion of that economic activity also moves with them.
Tukur Yahya, Chief Executive Officer of Ayisla Nigeria Limited, a commodity dealing firm based in Kano, said the development reflected a wider challenge in the state’s investment environment.
Yahya said Kano had the agricultural production base, large consumer market and established trading networks needed to support a much stronger agro-processing industry, but investors required reliable infrastructure and a predictable operating environment before committing large amounts of capital.
‘Kano has not failed, but it has been left behind,’ Yahya said.
He said the issue was no longer whether Kano had enough commodities to support agro-processing businesses, but whether the state was providing the conditions required for investors to establish and maintain processing operations.
According to him, large agro-industrial projects require substantial capital, meaning investors are unlikely to commit resources to facilities where essential infrastructure and supporting services are inadequate.
This is where Lagos appears to be gaining an advantage.
While Kano and other northern states derive much of their economic strength from agricultural production and commodity trading, Lagos has developed a more extensive ecosystem around logistics, distribution, finance, industrial activity and access to large consumer and export markets.
For processors, locating close to such infrastructure can make it easier to move finished products to consumers and export destinations.
The consequence is that Kano could continue to supply the raw materials while Lagos captures an increasing share of the processing income and employment generated from them.
Yahya said Kano needed to develop modern infrastructure across several agricultural value chains, particularly onions, other perishables, livestock, meat and dairy.
The absence of modern abattoirs, cold-chain facilities, dairy-processing plants, warehouses and dedicated markets for perishable commodities, he said, represented a major missed opportunity for a state with a large livestock population and extensive agricultural hinterland.
The onion sector illustrates the challenge.
Without adequate storage and processing facilities, farmers and traders can face significant post-harvest losses and price fluctuations. Processors, on the other hand, may prefer locations where infrastructure allows them to handle, preserve, package and distribute products more efficiently.
This creates a situation where Kano can continue to record high volumes of agricultural production without experiencing a corresponding expansion in industrial output.
The implications extend beyond Kano.
Northern Nigeria remains a major producer of grains, onions, livestock and other agricultural commodities, yet a substantial portion of its raw agricultural output is transported to other parts of the country for processing.
In effect, the region risks exporting raw materials while importing the economic value generated from processing them.
If the trend continues, northern states could struggle to create sufficient industrial employment for their growing populations, particularly young people seeking opportunities beyond farming and informal trading.
The movement of processing plants southwards could also add to logistics costs, as commodities must travel from northern production centres to southern processing locations before reaching consumers or export markets.
Umar said Kano needed to engage companies that had already relocated their processing equipment to determine precisely why they left and what interventions could encourage them to return or attract new investors.
He said the objective should not simply be to persuade existing businesses to remain but to create an environment in which new processing companies would naturally consider Kano an attractive investment destination.
For Kano to reverse the trend, stakeholders say the state must compete for more than commodity traders.
It must also compete for processors, manufacturers, logistics firms and investors willing to establish businesses around agricultural value chains.
Its proximity to major production areas, established commodity networks and the Dawanu market provide a strong foundation. But these advantages must be supported by reliable electricity, roads, storage, water, industrial land, financing and other infrastructure.
Yahya said modern agro-markets, abattoirs, cold-storage facilities and dedicated processing clusters could help Kano retain more of the value generated by its agricultural sector.
He acknowledged that such projects would require substantial investment, but said government could help create the conditions for private capital to flow into them through infrastructure provision, incentives, land availability, utilities and investment facilitation.
As the onion harvest gathers momentum across northern Nigeria, the issue is therefore becoming more than a question of agricultural production.
For farmers, the harvest means income. For traders, it means renewed commercial activity. But for Kano, it is also a reminder of the need to build industries capable of transforming agricultural commodities into higher-value products within the state.
Kano has the farmers, commodities, traders and one of West Africa’s largest commodity markets.
What it increasingly lacks is the industrial ecosystem needed to ensure that the value generated from those commodities remains within the state.
Unless the gap is addressed, Kano and the wider North risk remaining the starting point of an agricultural value chain whose most lucrative stages are increasingly being captured elsewhere.
The challenge is therefore not merely to produce more onions, grains or livestock. It is to ensure that more of what northern Nigeria produces is cleaned, processed, packaged, manufactured and marketed as higher-value products within the region.
Without that shift, Kano may continue to be known for what it supplies to industry, while Lagos becomes increasingly known for what it creates from those supplies.