Despite border closure, multiple bans and severe pains, Nigeria spends N3.1 trillion on Agric import in 2 years

Nigeria’s agricultural import continues to skyrocket despite the significant funding received by the sector and various measures put in place by the federal government to increase the agricultural productivity in the country.

According to the recently published foreign trade report by the National Bureau of Statistics (NBS), Nigeria’s agricultural import spiked by 140% year-on-year in Q1 2021. Nigeria imported agricultural items worth N630.18 billion in the period compared to N262.1 billion in Q1 2020.

This represents the highest quarterly Agric import recorded by Nigeria since 2016.

In the past two years, between Q2 2019 and Q1 2020, Nigeria has spent N3.1 trillion on agricultural imports.

The rise in Agric imports has continued unabated despite hundreds of billions of naira in funding backed by the CBN’s initiatives. The apex bank explained that these intervention facilities, which aimed at stimulating output growth, had started to yield positive results.

These initiatives include the Anchor Borrowers’ Program, Targeted Credit Facility, and Agri-Business Small and Medium Enterprise Investment Scheme (AGSMEIS).

Some of the intervention programs, as stated by the apex bank in its last MPC briefing, include N631.4 billion to 3.11 million smallholder farmers cultivating 3.8 million hectares of land, under the Anchor Borrowers’ program. Also, 29,26 beneficiaries received N111.7 billion for the AGSMEIS, while 548,345 beneficiaries have received N253.4 billion under the Targeted Credit Facility.

These interventions notwithstanding, Agric imports continue to rise, triggered by multiple devaluations of the naira, demand for higher input raw materials, and rising inflation.

Much of Nigeria’s food consumption still relies significantly on the importation of food items to stimulate local production. For example, wheat remains an imported production input costing Nigeria about N222 billion in the first quarter of 2021 alone. It was N252 billion in the 4th quarter of 2020, translating to an annualized cost of N1 trillion ($2 billion).

In 2019, the federal government announced that all land borders in the country were to be closed in order to tackle smuggling and other associated practices perpetrated through the borders.

The borders were also closed in other to spur the domestic agricultural industry in the country. Furthermore, the central bank placed restrictions on the access to forex for the importation of food items, some of which include; rice, meat, chicken, and more recently, sugar and wheat.

However, this has not yielded substantial results as the sector has only managed tepid growth in the past two years. This is despite being the highest employer of labour in the country.

A cursory look at Nigeria’s GDP data shows that the agricultural sector grew by 2.28% in the first quarter of 2021, with an annual growth of 2.17% and 2.36% in 2020 and 2019 respectively.

It also shows that the sector currently contributes 22.35% to the nation’s economy, a downturn compared to 26.95% recorded in the previous quarter.

A major problem in Nigeria has been the access to food and the incessant increase in the prices of food items in various regions of the country.

A situation that has been attributed to border closure, insecurity in the north, banditry, and kidnapping, EndSARS protest, devaluation of the naira, to list a few.

Nigeria’s food index has increased by 32.3% between September 2019 and April 2021, which is only a weighted aggregate of the market reality.

According to the Nairametrics market survey report which studies the prices of food items in major markets in Lagos State, a bag of pepper surged by as much as 85.7% in May 2021, while beans increased by 15.1% in the same period.

Other items that have witnessed significant increases recently include flour, egg, tomatoes, noodles, pasta, bread, beverages, just to state a few.