Nigeria has signed a landmark strategic agreement with Arabia’s Halal Products Development Company (HPDC) in an effort to establish itself as a major player in the rapidly expanding global halal market. This deal, which was signed at the esteemed Makkah Halal Forum in Saudi Arabia, represents a transformative step in Nigeria’s Economic Development under the Renewed Hope Agenda of President Bola Ahmed Tinubu. The alliance seeks to position Nigeria as a major player in the $7.7 trillion global halal market through substantial investment, technological cooperation, and improved market access in vital industries including food production, pharmaceuticals, finance, and livestock.
Vice President Kashim Shettima, who was represented at the event by Senator Ibrahim Hassan Hadejia, described the agreement as a significant step toward economic diversification, which is a long-standing objective for Nigeria as it looks to lessen its reliance on oil earnings. This strategic partnership not only fortifies Nigeria’s economic relations with the Kingdom of Saudi Arabia but also heralds a new era of opportunity for Nigerian companies and Investors hoping to capitalize on the quickly growing halal market. It is anticipated that the deal with HPDC will open the door to a flood of international investments that will support many facets of the halal economy.
Economic benefits of increasing Nigeria’s halal exports.
Through the influx of finance, Nigeria will be better positioned to compete in the global halal market, which will also empower local companies and help generate jobs. Additionally, the Arab Bank for Economic Development in Africa (BADEA) and the Islamic Development Bank (IsDB) will also provide financial support, regulatory development, and capacity building for the project. These institutions would be essential in providing Nigerian companies with the financial and technical know-how required to meet international halal standards. It will all build on Nigeria’s expanding Islamic financial industry, which has found success with Sukuk Bonds and Islamic banks like Jaiz Bank, Taj Bank, and Lotus Bank.
Moreover, the deal holds substantial economic potential for Nigeria, with the country’s halal product exports already estimated to account for up to 5.7% of Africa’s $4.2 billion halal product exports to Organization of Islamic Cooperation (OIC) countries. If its Export quota to the OIC increased from 2% to 6% over the next four years, Nigeria’s halal exports might increase from $240 million to $788 million. This spike has the potential to increase the country’s GDP by an astounding $548 million, opening up new sources of income and rapid economic expansion.
Rising demand and prospects in Nigeria’s halal market.
Strategic import substitution could also increase the nation’s GDP by about $1 billion by 2027. At the same time. Nigeria’s domestic market for halal goods and services is expanding steadily. Nigerian consumers spent $107 billion on halal goods and services in 2022. By 2027, this amount is predicted to increase to $180 billion at a Compound Annual Growth Rate (CAGR) of 10.7%. The country’s halal ecosystem holds enormous potential, as seen by the growing local demand, which makes it a profitable market and a wise place to invest.
The country is committed to establishing itself as a global leader in the halal economy, not only in Africa. According to VP Shettima, the halal market has enormous potential that is in line with President Bola Tinubu’s overarching goal. He described the halal Economy as one that accommodates all players and stakeholders. Driven by one of the largest Muslim populations in the world, Nigeria is now the eighth-biggest domestic halal economy market in the world. The country is well-positioned to create a thriving Investment industry within the global halal economy due to its size and population, he explained.
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Shettima stressed that in order to take full advantage of the prospects in the halal economy, Nigeria needs to adopt a comprehensive strategy. He emphasized the significance of leveraging business matchmaking events, roadshows, and targeted investor conferences to draw in foreign investments. Shettima added that the country has the opportunity to become a major supplier of halal products and services across Africa thanks to the growth of regional trade, especially through the African Continental Free Trade Area. According to him, these initiatives will present Nigeria’s unrealized potential to international investors and establish the nation as a top location for halal-related business projects.