Government attempts fail as food imports soar 122% and the deficit reaches N4.9 trillion.

Despite ongoing government efforts to boost food production in Nigeria through various intervention initiatives, the country registered an N4.92 trillion food trade imbalance between 2018 and 2022.

According to available data, Nigeria is not producing enough food to feed its people, leaving the country with little choice but to import.

As a result, to feed its constantly growing population, the country increased the value of imported foods by 121.7 percent during a five-year period, rising to N1.9 trillion in 2022 from N857 billion in 2018.

The development could be linked to the country’s increased insecurity, particularly around the agricultural belt, which has pushed many farmers to quit their farmlands, prompting the government to spend millions of dollars annually on food imports.

According to data obtained from the National Bureau of Statistics (NBS) and the Central Bank of Nigeria (CBN), total agricultural imports into Nigeria from 2018 to 2022 totaled N6.916 trillion, while total agricultural exports from the country during the same period totaled N1.997 trillion, resulting in an N4.919 trillion agricultural trade deficit.

The numbers also reveal that agricultural imports into the country have steadily increased since 2018, when they totaled N857 billion, rising to N959 billion in 2019, N1.2 trillion in 2020, N2 trillion in 2021, and N1.9 trillion in 2022.

Agricultural exports from the country, on the other hand, totaled N302 billion in 2018, N270 billion in 2019, N322 billion in 2020, N505 billion in 2021, and N598 billion in 2022, representing a 98 percent increase from 2018 to 2022.

Some observers ascribe the growth in exports to the government’s strong non-oil export promotion plan rather than increasing output, a development they see as detrimental to the nation’s food security.

According to a recent NBS analysis, the country’s food production decline may not be solely due to the impact of insecurity.

According to the report, costs of critical farming inputs like as seeds, herbicides, pesticides, fertilisers, and agro machinery climbed sharply during the time, making it increasingly difficult for farmers to expand production and pushing many to cut down.

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The federal government’s many initiatives through the agencies appear to have done little to solve the situation.

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Over the years, the federal government has spent billions of dollars on various agricultural schemes to boost local food production.

The Central Bank of Nigeria (CBN) announced earlier this year that the top bank had given a total of N1.08 trillion to farmers through the Anchor Borrowers Programme (ABP) during the last seven years, from 2015 to 2022.

The bank further stated that the CBN disbursed N12.65 billion to three agricultural projects under the initiative between January and February 2023.

ABP was established in November 2015 with the goal of increasing agricultural productivity, increasing foreign exchange profits, and reversing Nigeria’s negative food trade deficit.

This is in addition to other programmes like as the Commercial Agriculture Credit Scheme (CACS) and the Accelerated Agricultural Development initiative, which are all aimed at increasing the nation’s food production.

Analysts estimate that these programmes, in addition to the ABP, have been valued at more than N3.0 trillion throughout the years.

However, there is no substantial influence because the country still has a massive supply deficit in most of its main goods, despite the country’s population growth rate.

Although agriculture generates 22 percent of Nigeria’s total GDP and employs more than 80 percent of the population, smallholder farmers, who produce 90 percent of Nigeria’s food, lack the means to increase output.

Analysts ascribe this scenario to a business climate marked by low productivity, significant post-harvest losses, low value addition, fragmented marketplaces, and inefficient value chain logistics.

Agriculture requires more active government intervention — CPPE
Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), provided some insight into the situation, stating that more active government intervention in agricultural inputs is required, adding that an improvement in the security situation would undoubtedly boost sector performance.

“The rising food import bill is extremely concerning, especially for a country so endowed with arable land and numerous other natural resources,” he says.

“The fundamental issue is governance.” We have not implemented effective policies and strategies to encourage agricultural investment over the years, particularly since the 1970s.

“For several years, there was virtually no agriculture subsidy, whereas even in advanced countries, billions of dollars are committed to agriculture subsidies.”

“Active government intervention in agricultural inputs, technology adaptation, financing, processing, marketing, logistics, access to land, and storage is required.”There is a need to increase efficiency throughout the agricultural value chain, including production, processing, transportation, preservation, packaging, and so on.

“Providing these support systems in the private sector is impossible.” These support mechanisms existed in Nigeria prior to the military’s entry into political rule in 1966.

“An improvement in the security situation would undoubtedly boost sector performance.” This would have an impact on the country’s job creation and food security.”

Has a detrimental impact on the value of the Naira – NACCIMA
In an interview with Financial Vanguard, Sola Obadimu, Director General of the Nigerian Association of Chambers of Commerce Industry Mines and Agriculture (NACCIMA), blamed the growing reliance on food imports on “insecurity, depreciating infrastructure, lack of power/preservation facilities for locally produced agricultural products, and so on.”

On the implications for the economy, particularly the value of the Naira, Obadimu observed, “The Naira appears to be losing value.”

“As I’ve said before, if we want to strengthen the Naira, we must export more than we import, show discipline and commitment to consuming locally available products, and reduce our unnecessary tastes for imported luxurious items.”

“Yes, we must eliminate corruption associated with the opaque fuel subsidy system as well as the dual currency rates.” It is also true that consumers pay more for fuel and utilities in other places. However, we must remember that infrastructure in those countries is significantly superior, and industries would not have to worry as much about inadequate roads, insecurity/kidnapping concerns, insufficient public power supply, and so on.

“It is therefore incumbent upon us to reduce unnecessary expenditures on the various arms of government and raise the quality of our infrastructure to an appreciable level in order to justify our full adoption of liberal market forces.”