Barely seven years after Nigeria successfully commenced a plan to concede 17 of its 33 state-owned silo storage complexes, the program appears to be running out of steam, posing a threat to the anticipated smooth supply of grain to flour millers and feed manufacturers with the government now calling for program’s overhaul and revitalization.
Nigeria, through the Infrastructure Concession Regulatory Commission (ICRC), a government agency, conceded the 17 silo facilities and warehouses to five private companies in 2018, including the country’s biggest grain milling firm, Flour Mill Nigeria (FMG), under a rehabilitate-build-operate-transfer model, for a 10-year period before reverting them back to government.
In September 2025, a statement by Nigeria’s Ministry of Agriculture said many of the silo facilities initially meant to provide storage services to private firms for the storing and trading in grain and other agricultural commodities, have been abandoned, raising concerns the trend could disrupt the continuous supply of quality grains to millers and consumers and undermine the drive to reduce post-harvest grain losses, currently estimated at US$10 billion every year.
“Out of the 17 silo complexes conceded to five private companies in 2018, only Flour Mills of Nigeria (FMN), which operates three silo complexes under three separate Special Purpose Vehicles, has met all conditions and is performing optimally,” said Nigeria’s Minister of Agriculture and Food Security Abubakar Kyari in September 2025.
Nigeria previously said the silo storage complexes, with a total capacity of 1.3 million metric tons, and which were constructed between 2009 and 2010 with an estimated US$11.85 billion in government funding through the then Ministry of agriculture and Water resources, were deliberately developed “to provide immediate food relief in times of emergency, provide appropriate mechanism, and guarantee minimum price scheme to make farmers earn remunerative prices for their produce and provide a mechanism for price stabilization and storage capacity for excess production, and reduce post-harvest losses.”
The idea was to be built on the 2009 government policy that provided for the holding of 15% of the total grain harvest as reserves, with the state-owned National Food Reserve Agency (NFRA) holding 5% as the core strategic reserve and individual Nigerian States holding another 10% as government buffer stocks according to past officials reports on the program.
Concessionaire Failures
However, minister Kyari said an assessment by the ministry of the performance of 17 conceded silo and warehouse facilities “indicated that several concessionaires failed to put silo facilities into optimal operating condition despite earlier agreements, monitoring visits showed little or no progress in some facilities, with reported cases of vandalization.”
He said except for FMN, all other concessionaires “defaulted on their payment obligations” with the ICRC proposing kicking out private companies that have no operational needs for the silos and reverting to the federal government all those storage facilities that have been abandoned by some of the concessionaires.
FMN, which is a member of the Flour Millers Association of Nigeria (FMAN), a partnership of leading wheat millers in Nigeria, operates the three silo complexes – for a combined capacity of 75,000 metric tons – in the regional States of Gombe, Oyo, and Benue. The facilities are operated through concessionaires: Special Purpose Vehicles of Servewell Agricultural Services Ltd., Independent Grain Handling & Storage Ltd., and Uplands Grains Production Co. Ltd., respectively.
Other concessionaires include Agro-Universal Consortium with seven silos that have a total capacity of 250,000 metric tons, Matriville Consortium with five silos holding capacity of 186,000 metric tons, Coscharis Farms Ltd., and Eboniyi Agro-Industries Ltd. with 25,000 metric tons capacity each.
Addressing Challenges
The concerns expressed by Kyari on the non-performance of the silo concessioning scheme in Nigeria went a long way to confirm the veracity of previous reports, including one by the World Bank nearly two years earlier, which indicated glaring gaps in the manner the West African country was deploying public-private partnership in strengthening its grain storage systems. This came after it became apparent only a few of the storage facilities were operational while the rest were either partially operational or in some cases completely abandoned.
The bank linked the challenges facing Nigeria’s silo concessioning plan to several factors including “lack of fiscal resources to fill the silos and operationalize the strategic grains reserve of 15% as envisaged earlier and the implementation of government policy to make agriculture a commercial venture with greater private participation in grain and food markets.”
“Some government-owned silo storage facilities have been severely underutilized or never used at all, resulting in opportunity cost losses to the government but with a longer-term plan to increase rice production in the country and the development of commodity exchanges, rehabilitating the silos through the public private partnership route for commercial use is considered a good business proposition,” the World Bank said in its 2022 report on Grain Storage Public Private Partnerships (PPPs).
In the long-term, the Bank says, because of a lack of policy backing and no guarantee of demand, Nigeria’s silo storage PPPs or concessioning “will need to be based on a thorough assessment of the commercial viability of rehabilitating and using existing storage through a concession type arrangement with no coverage of demand risk.”
It further states the dissolution of NFRA as an independent agency, and the subsequent transfer of its functions to one of the departments within the Ministry of Agriculture and Fisheries, may have advsersely impacted the performance of silos concessioning program.
Elsewhere, a survey by the Alliance for a Green Revolution in Africa (AGRA), an international non-profit pushing for the reduction of poverty and hunger in Africa, reveals that although the capacity of all silo complexes in Nigeria exceeds 1.3 million metric tons, their operational capacity is less than 22%.
“Discussions with stakeholders showed that there was limited access to warehousing facilities by farmers and processors reported an increase in post-harvest losses,” AGRA said.
Meanwhile, as Nigeria mulls a revamp of its network of silo storage facilities, flour millers in the country will have to brace themselves for an increase in the total supply of key grains including wheat, rice, maize and sorghum during the marketing year 2025-26.
Predictions by the U.S. Department of Agriculture (USDA) point to a 13% increase in wheat production in Nigeria during the period to approximately 135,000 metric tons due to expansion of area planted from 110,000 hectares to 115,000 hectares and a higher yield of 1.1739 metric tons per hectare up from 1.0909 last year.
This increase would, among other outcomes, trigger demand for more storage facilities from where Nigeria’s millers can deliver the harvest to their flour mills. Currently, Nigeria wheat milling capacity is estimated at 8 million metric tons with Flour Mills of Nigeria leading the pack ahead of Olam International and BUA Group, with a collective control of about 75% of the country’s milling capacity.
A further increase in supply is also expected in Nigeria’s corn market as the country’s domestic production and imports are projected to reach nearly 12.5 million metric tons in 2025-26, up from the 11.6 million metric tons the previous year, riding on “an increase in area harvested, anticipated consumption increases, and expected decrease in the cost of inputs, fuel, and logistics.” This trend is also anticipated in the production of rice and sorghum.
And, as the World Bank puts it, the best business proposition for Nigeria to pursue, if its long-term plans are to make headway, is for the government to stick, albeit proactively, to the rehabilitation of the dilapidated silos through the public private partnerships for commercial use.
Shem Oirere is a freelance writer based in Nairobi, Kenya. He can be reached at shem@shemoirere.com.