Sector Outlook: Unlocking a $2 Billion Market Opportunity
To mark World Cassava Day 2025, the Nigeria Cassava Investment Accelerator (NCIA) released a Sector Outlook that highlights Nigeria’s untapped potential in cassava industrialisation. The publication outlines four high-growth derivative markets and identifies key levers to unlock scale and competitiveness in the sector.
The outlook has already gained notable media attention:
The Guardian: On World Cassava Day, Lens Zooms on Unlocking Opportunities, Industrialisation →
Business Day: Nigeria’s Largest Cassava Status Dented with 2% Global Processing Share →
Nigeria’s Cassava Potential vs. Market Reality
Nigeria is the world’s largest cassava producer, accounting for approximately 18% of global output. Yet, the country captures only 2% of the global cassava processing market, which is valued at over $180 billion.
This disconnect reflects a major opportunity. Although cassava is a daily staple and supports the livelihoods of around 14 million smallholder farmers, more than 90% of Nigeria’s cassava harvest is consumed in low-value forms like garri and fufu.
Meanwhile, international demand for cassava-based industrial products continues to rise. Cassava derivative exports have grown by over 20% annually in recent years, according to the International Trade Centre.
Four Industrial Derivatives Driving Demand
Industrial cassava processing is not a distant ambition, it’s a near-term opportunity anchored in four high-growth product categories, together representing an addressable market of over $2 billion.
- High-Quality Cassava Flour (HQCF)
HQCF has strong potential to replace a portion of Nigeria’s wheat imports, currently valued at $2 billion, with 98% imported. Despite this, HQCF utilisation remains low at just 5%.
However, existing processing facilities are operating at only 50% capacity, meaning scale-up is feasible. Increasing HQCF adoption to just 20% would unlock a $600 million domestic market.
- Cassava Starch
Starch is a critical input across multiple sectors: food, paper, textiles, pharmaceuticals, and adhesives. In Nigeria, demand is growing at 5.2% annually, but local production is unable to meet it.
This unmet demand represents a $485 million market gap, presenting a clear case for investment in processing and supply chain infrastructure.
- Sweeteners (Glucose & Sorbitol)
Nigeria’s sweetener market is growing rapidly (18% per year), but remains 95% import-dependent. Industrial users pay a premium for imported inputs.
Cassava-based glucose and sorbitol offer a cost-effective alternative, and companies like Coca-Cola have already shown interest in local sourcing. The opportunity here is valued at $500 million.
- Bioethanol
Used in beverages, pharmaceuticals, and fuel blending, 26% of Nigeria’s ethanol demand is met through imports.
Cassava-based bioethanol not only substitutes these imports but does so more economically, costing approximately $0.06 per litre less than imported ethanol. With an existing market worth $420 million, bioethanol is a strategic segment for value capture.
Three Critical Levers to Accelerate Growth
- Raise Yields and Productivity
Nigeria’s cassava yields average just 6 tonnes per hectare, far below the global benchmark of 25 tonnes. This yield gap limits supply and undermines the economics of industrial processing.
According to the Food and Agriculture Organisation (FAO) estimates, closing this gap could add 11 million metric tonnes of cassava to national supply. But yield gains will only come through targeted investment in disease-resistant varieties, mechanisation, and agronomic training.
Furthermore, up to 40% of cassava is lost post-harvest, a figure that must be addressed through better transportation and processing logistics.
- Improve Processing Efficiency
Cassava processing in Nigeria remains expensive. In off-grid regions, unreliable electricity can cause processing costs to rise as much as fourfold. Many facilities are underutilised, operating at less than 50% capacity, which further drives up unit costs.
Investing in modern technologies, such as automated peelers and hybrid dryers, along with shared infrastructure in agro-industrial clusters, can help reduce costs, improve throughput, and ensure reliable supply to large-scale off-takers.
- Unlock Capital and Reduce Risk
One of the biggest barriers to industrial scale-up is access to affordable finance. Traditional lending is often short-term, expensive, and risk-averse.
To unlock meaningful investment, the sector needs instruments like patient capital, concessional loans, and long-term offtake agreements that provide price and demand certainty.
Policy support is also crucial. Tax incentives, reduced tariffs on imported equipment, and simplified regulatory approvals can lower the barriers to entry for new and existing investors.
Three Strategic Pathways for Investors
- Secure Raw Material Supply
A consistent supply of quality cassava roots is critical to industrial processing. Investors can explore:
- Out-grower schemes that contract smallholder farmers to supply cassava, improving reliability and reducing transportation costs
- In-grower models, where farmers operate on company-managed land with input and training support for better yields
- Commercial production, involving large-scale in-house farms to ensure year-round supply and full quality control
- Expand and Modernise Processing
There is a clear opportunity to scale processing through:
- Deployment of automated peelers, solar or hybrid dryers, and modular processing units that suit off-grid locations
- Locating plants in export-oriented industrial zones to benefit from infrastructure and policy incentives
- Establishing regional clusters around cassava-producing zones to share infrastructure and build supply chain resilience
- Capture More Value through Market Linkages
Unlocking the full potential of cassava requires more than just production. It demands strong market connections and innovative use of by-products. These strategies could help stabilise demand, reduce risk, and enhance profitability:
- Joint Ventures & Consolidation: Partner with buyers or offtakers through equity deals to stabilise demand and share investment risks.
- Offtake Agreements: Secure long-term contracts with major buyers to ensure predictable revenue and operational stability.
- Global Market Access: Export to countries with ethanol blending mandates or high demand for industrial starch and sweeteners.
- By-product Utilisation: Convert peels and residues into bioenergy or animal feed to cut waste, lower input costs, and boost margins.
How NCIA Supports Investors
The Nigeria Cassava Investment Accelerator provides comprehensive support for navigating the cassava industrial landscape, identifying investment opportunities, and establishing key industry linkages.
Investors can leverage these structured support mechanisms to significantly de-risk their investments, maximise market potential, and build sustainable, competitive operations.
To explore partnership opportunities, contact us at ncia@lbs.edu.ng