Nigeria Agriculture & Industrial Equipment Engine Market Research Report: Forecast (2024-2030)

Market Insights & Analysis: Nigeria Agriculture & Industrial Equipment Engine Market (2024-30):

Nigeria Agriculture & Industrial Equipment Engine Market size is estimated to grow at a CAGR of around 12.21% during the forecast period, i.e., 2024-30. Increasing investment across the industrial and agricultural sectors has been driving the demand for engines for both purposes, including power generation and propulsion. In recent years, the government has been largely focusing on improving agricultural production across the country, which is in line with improving the food security of the country and reducing its reliance on imported items. For instance, in 2021, the Nigerian government announced the development of the National Agricultural Technology and Innovation Policy (NATIP) for 2021-2025.

NATIP aims to improve agriculture through enhanced inputs, research, mechanization, funding, and sustainability, with a focus on achieving self-sufficiency in rice and other key crops. Thus, these new incentives and programs have upscaled agricultural activities, and the need for agricultural equipment across the farms has increased. This has led companies like Vishvas KOZ Tractor Limited, Hello Tractors, etc., to expand their tractor manufacturing and assembly facilities across Nigeria. Therefore, the demand for engines from agriculture equipment like tractors, harvesters, etc., has increased.

Further, the government has also been focused on escalating foreign investment across the agricultural sector, which would further amplify production activities across Nigeria. For instance, in Nigeria, foreign direct investment (FDI) in the agricultural sector reached nearly USD 4.84 million in Q1 2023, marking about a 175 percent increase from Q1 2022. Hence, these increased foreign investments are projected to upscale the need for tractors and harvesters across the farms. This, in turn, would continue to support the demand for engines from the agriculture segment in the coming years.

Nigeria Agriculture & Industrial Equipment Engine Market Driver:

The Growing Construction Sector Driving Market Growth – In Nigeria, there has been a rise in the construction sector, which is due to the initiatives led by the government to overcome the massive infrastructure deficit. This rise in the growth of infrastructure projects increases the demand for engine-powered vehicles and machinery, which are prerequisites for handling the material and other equipment on the construction site. For instance,

• According to the ITA (International Trade Administration) Report 2023, the construction market in Nigeria is expected to grow by 5.7% in 2022, with an annual average growth of 3.2% between the years 2022 and 2026.

Various infrastructure projects in the country are driven by the government as well as private investors and partnerships for the improvement and construction of infrastructure such as roads, bridges, dredges, waterways, ports, railways, etc. Over the past few years, the government of the country has worked actively to reduce the infrastructure deficit through various investments as a part of a 30-year infrastructure plan under the National Integrated Infrastructure Plan. This results in a considerable demand for engines in construction equipment, which is projected to accelerate the market size & volume in Nigeria in the coming years.

Nigeria Agriculture & Industrial Equipment Engine Market Opportunity:

Escalation in the Construction of Data Centers Across the Country Propelling the Growth – Data centers are the critical infrastructures that offer the security, reliable storage, and management of digital data across the country. Nigeria has been experiencing booming growth in the digital economy, which is elevating the organization's reliance on digital technology to operate, which is escalating the demand for the growing infrastructure of data centers. For instance,

• In 2023, the Rack Centre is planning for the establishment and construction of a 12 MW data center facility named Rack Centre LSG 2 in Lagos, Nigeria.

Furthermore, the expansion of data centers over the past few years is attributed to the rising adoption of cloud computing in the country. Cloud computing permits organizations and businesses to store and access data over the internet. These data centers are offering solutions to these organizations for a flexible and cost-effective way of managing their IT infrastructures. This expansion of data centers across the country is increasing the demand for engines and is attributed to further increasing the market size of the engine market in Nigeria in the coming years.

Nigeria Agriculture & Industrial Equipment Engine Market Challenge:

Surging Adoption of Renewable Energy Alternatives to Mitigate Carbon Emissions –  As the world transitions towards a decarbonization strategy, the government of Nigeria is taking initiatives for an alternation in the production of energy, as the power sector holds the majority of carbon emission rates across the country. This involves the upscaling of renewable energy projects through investments by the government and other private companies in Nigeria, which aim to reduce carbon emissions. This rise in renewable alternatives for energy production has drastically impacted the demand for engines in the power sector across the country. For instance,

• According to AEP (African Energy Portal), in 2022, the NSIA (Nigeria Sovereign Investment Authority) made an investment of USD 24 million in the Solar Power Naija Programme.

The surge in demand for renewable energy projects reduces the reliance on fossil fuels, which were typically used to power engines in traditional power generation plants. This has negatively impacted the market share of the engines in Nigeria during the historical period, and it would impact the growth in the upcoming years as well.

Nigeria Agriculture & Industrial Equipment Engine Market Trend:

Increasing Adoption of the Gas Engine Across the Country – Over the past few years, various industries have been facing challenges to overcome and accelerate decarbonization and energy security across the country. Nigeria is a major industrial hub that involves energy-intensive manufacturing operations that are restrained by the weak power supply across the country. To deal with sufficient power generation, which is critical to industrial development and operation, flexible gas engine power plants are emerging as a solution. For instance,

In 2022, the government of Nigeria has been involved in the development of the 120 MW combined heat and power plant in Nigeria, which comprises ten 12 MW gas engines along with the alternators.

These flexible-fuel gas engines overcome the fuel supply risk as they operate effectively while switching fuels during operation. These gas engines are also key factors in the decarbonization strategy, as they aim to comparatively lower carbon emissions as compared to traditional engines. The adoption of gas engines is elevating to overcome the inconsistency in the power supply that industries are facing, and it is anticipated that it will further escalate market growth in the forthcoming period as well.

Nigeria Agriculture & Industrial Equipment Engine Market (2024-30): Segmentation Analysis

Nigeria Agriculture & Industrial Equipment Engine Market study of MarkNtel Advisors evaluates & highlights the major trends and influencing factors in each segment. It includes predictions for the period 2024–2030 at the global, regional, and national levels. Based on the analysis, the market has been further classified as:

Based on Fuel Type:

•              Diesel

•              Gasoline

Based on fuel type, diesel engines captured a notable share in the Nigeria Agriculture & Industrial Equipment Engine Market during the historical period. It is attributed to the superior mileage of the engine, meaning they deliver around 25 to 30% better fuel economy as compared to the similar performance of the gasoline engine. These engines are highly efficient and produce the most energy-dense fuel in the industry, consisting of more usable energy in contrast to the gasoline type of engines. Due to this, the demand for diesel engines is considerably expanding across various sectors, including the commercial, industrial, agricultural, and transportation sectors. The tourism sector has been steadily expanding over the years, which necessitates the demand for transportation, boats, ferries, etc., which are usually powered by diesel engines. For instance,

• According to the World Travel & Tourism sector, the contribution of the Nigerian tourism sector is forecast to grow at an average rate of 5.4% during the years 2022-2032 which is considerably outpacing the 3% growth rate of the overall economy.

These increments in the tourism sector elevate the growth of the development and maintenance of transportation and infrastructure. This surge in the development of infrastructure increases the demand for engines, and it is anticipated to increase the market size of the Nigeria Agriculture & Industrial Equipment Engine Market in the forthcoming period.

Based on End User:

•              Agriculture

•              Industrial

•              Power Generation

The power generation segment witnessed notable growth in the Nigeria Agriculture & Industrial Equipment Engine Market during the past few years. The growth in the market imputes the rise in urbanization, leading to an increase in infrastructure in the commercial, residential, and industrial sectors. This expansion in the industrial and commercial sectors requires more power to run the machinery, equipment, and other operations that are powered by engines. Various sectors, such as hospitals, data centers, telecommunications facilities, etc., considerably rely on diesel generators to ensure uninterrupted operations and maintain essential services even during power outages. This elevates the necessity of the engines for efficient power production.

Furthermore, the rural areas of the country have a limited power supply, which demands power generation solutions. These engines offer electricity to these remote and off-grid areas where extending the main electrical grid may not be feasible or cost-effective. This adoption of diesel generators for continuous power supply upsurges the market size of the engine in Nigeria, which is projected to further contribute toward the elevating of the market share in the coming year as well.

Nigeria Agriculture & Industrial Equipment Engine Industry Recent Development:

• In 2022: Cummins Inc. announced a strategic partnership with the Havilah Group to bridge the energy power supply in the power sector of Nigeria.

Gain a Competitive Edge with Our Nigeria Agriculture & Industrial Equipment Engine Market Report

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