At N236.33 billion and 6.4 percent of total importation in the first quarter of 2019, Nigeria’s agricultural imports have for years highlighted the country’s difficulty in producing enough food for the country’s 190 million population.
Yet, President Muhammadu Buhari has directed the Central Bank of Nigeria (CBN) to stop providing foreign exchange for food importation, even though the country continues to rely on importation for virtually every food item, especially grains such as wheat and proteins such as fish.
The country has so far been unable to create an enabling environment that will offer a competitive advantage in production, such that importing is not considered cheaper than local production, as industry experts have noted in several instances.
“President @ Mbuhari Tuesday in Daura, Katsina State, disclosed that he has directed the Central Bank of Nigeria to stop providing foreign exchange for importation of food into the country, with the steady improvement in agricultural production, & attainment of full food security,” wrote Garba Shehu, SSA, Media and Publicity to the President, in one of a series of tweets yesterday.
The comments were the aftermath of a meeting where President Buhari hosted the All Progressives Congress (APC) governors to Eid-el-kabir lunch at his country home in Daura. The president, according to the tweets by his spokesperson, had expressed the view that the foreign reserve will be conserved and used for the diversification of the economy, and not for encouraging more dependence on foreign food import bills.
“Don’t give a cent to anybody to import food into the country,” Shehu quoted Buhari to have said.
Efforts to reach the CBN on this development were unsuccessful as Isaac Okorafor, director, corporate communications department of the apex bank, neither answered calls put across to him nor responded to messages sent to his phone.
Ayodele Akinwunmi, head of research, FSDH Merchant Bank Limited, said the president’s directive may encourage local production of food items and generate employments provided Nigeria has the capacity in the production of the food item.
“However, it is important to note that there are some food items that Nigeria does not have comparative advantage of their production. And if Nigeria does not have a stock of these food items in place already, the prices of food items may go up,” Akinwunmi said.
“More importantly, Nigeria needs to build competitive advantage in food production to ensure that we are able to feed ourselves,” he said.
In reality, farm productivity in Nigeria has struggled to improve in recent years as despite intervention programmes by the government, insecurity and violent attacks on farming communities have wiped out significant portions of what should have been gains.
At the same time, farm yields in the country remain among the lowest in the world. Even though more people appear to have been incentivised to take up farming owing to government’s increasing rhetoric, land under cultivation has increased in some places (where insecurity is not a deterrence), but actual productivity in terms of yield has not substantially improved. Infrastructure for the entire agricultural value chain has also implied many countries have an edge over Nigeria, and invariably, imported goods become cheaper.
“Many of the countries where these things ( i. e., agricultural goods) are coming from have built an infrastructure that makes it a lot cheaper ( to produce). The cost of doing business in those countries is far lower,” said Emmanuel Ijewere, vice president, Nigeria Agribusiness Group (NABG), told Businessday in an earlier report. “They have electricity, good roads and so on, so they already have an advantage over us.”
The president, according to the statement, said some states like Kebbi, Ogun, Lagos, Jigawa, Ebonyi and Kano had already taken advantage of the Federal Government’s policy on agriculture with huge returns in rice farming, urging more states to plug into the ongoing revolution to feed the nation.
However, as BusinessDay analysis of data in the Agriculture Promotion Policy released in 2016 has noted, Nigeria has a deficit across every type of food produce. In fact, Nigeria as at 2016 had a 20.14 million metric tonne deficit across 13 major crops and a 60 million poultry bird deficit. Three years later, with the rapidly growing population, and insecurity threatening farming activities in many parts of the country, this deficit would have increased substantially.
According to the National Bureau of Statistics (NBS), in the first quarter of 2019, the trade in agricultural goods stood at N322.4 billion representing 3.9 percent of the value of total trade. The export component of this trade was valued at N86.1 billion. Compared with N97.3 billion recorded in the previous quarter, this represented a decrease of 11.89 percent, but indicates an increase of 17.5 percent when compared with Q1, 2018.
In terms of imports, agricultural products were valued at N236.33 billion or 6.4 percent of total imports during the period under review. The major driver was Durum wheat (not in seeds) imported from the United States and Russia at values of N19.6 billion and N17.8 billion, respectively. Other drivers were Durum wheat in seed imported from Argentina (N18.7 billion) and the United States (N18.1 billion).
Following wheat in the first quarter was Mackerel ( Scomber scombrus, Scomber australasicus, Scomber japonicus) meat, herrings and other frozen protein food items.
“We have achieved food security, and for physical security we are not doing badly,” Buhari said in the tweets by Shehu. However, 5.3 million Nigerians experienced acute food crisis in 16 states of northern Nigeria last year, as the country was identified among eight countries with the worst food crises in 2018, which accounted for two thirds of the total number of people facing acute food insecurity in the world – amounting to nearly 72 million people. This was the finding of the 2019 Global Report on Food Crises, which highlighted northern Nigeria as the driver of food insecurity, with the country in the league of eight countries expected to remain among the world’s most severe food crisis regions in 2019.
As Businessday reported, things may improve, but they could also get worse, as an additional 22.7 million Nigerians in the north alone are at risk of food crisis if things do not improve. The number will increase dramatically when the southern regions begin to feel the pinch of insecurity more than being currently experienced, leading to an even worse decrease in food production.
CALEB OJEWALE & HOPE MOSES-ASHIKE
