For the country’s agric sector, it was a performance below expectation due to insecurity, high cost of food prices, hike in diesel price, high cost of transportation, exchange rate (FOREX) volatility and Russia’s invasion of Ukraine, among others. TAIWO HASSAN reports
The inability of the present administration to tackle insecurity in the country, mostly around the country’s farmlands, is metamorphosing into acute food shortage, skyrocketing prices of foodstuffs in the markets and hoarding, among others. These challenges have led to hunger and suffering among many households as Nigerians struggle to feed properly. Sadly, as the sector is still battling to navigate the enormous straits facing the sector, the Russia invasion of Ukraine has further compounded the pressures.
The biggest challenge that happened in the country’s agric sector in the quarter under review was the war going on in Ukraine. Indeed, the conflict has affected global food production as various sanctions have been slammed on Russia for violating Ukraine’s internal security. Particularly, the February 24 invasion has tipped Russia towards its worst economic crisis since the 1991 fall of the Soviet Union, though Moscow said the global impact of the sanctions could be much more significant. No doubt, the West’s sanctions had triggered a global food crisis and spiralling energy prices. So, agriculture is really feeling the heat from the conflict seriously. However, Nigeria has not been lucky and is taking large share from the war in Ukraine over her reliance on food importation, mostly from Ukraine and Russia, especially on agric produce like wheat, herrings, blue whiting, and mackerel. In her reaction to the war, the Director-General of the World Trade Organisation (WTO), Dr. Ngozi Okonjo-Iweala, warned that Nigeria and many African countries may face food crisis due to the war. She gave the warning in an interview with BBC World Service, which was monitored by New Telegraph recently. Okonjo-Iweala also warned that the war would have global dimensions, stressing the need for an immediate end to it. She described Russia as the biggest exporter of fertilisers, wheat and maize to many African countries; stressing that the prices of the two grains had gone up by 62 and 36 per cent respectively since the beginning of the war. The WTO chief also disclosed that the price of soya beans had inflated by 29 per cent, while noting that the cost of purchasing fertilisers globally had gone up by 300 per cent as a result of the on-going war between the two European nations. According to her, a recent report by the Africa Development Bank indicate that the war in Ukraine posed a severe challenge to Africa, because of its heavy reliance on cereals imports from both Ukraine and Russia. “What is being done by the Africa Development Bank shows that in many African countries (including Nigeria) food prices have risen by 20 percent. This is huge. “So, my worry is that we have a food crisis that is brewing and could become worse if nothing is done about it,” she said.
It is also disturbing that solutions are yet to be found to the country’s insecurity, which has negatively impeded and eroded growth in the country’s food basket. Indeed, the state of insecurity has reached a frightening level deserving of a state of emergency. The omens are very bad. The bandits and terrorists are becoming more daring, bolder and audacious. They operate with a baffling impunity. This trajectory portends serious adverse implications for economic growth prospects and investment outcomes, mostly around the country’s agricultural climate. Sadly, based on the worsening insecurity, Nigeria cannot retain, scale or attract investment in an environment that is not secure. This is true of domestic and foreign investments. The situation continues to pose very serious challenge to lives and livelihoods. Investors’ confidence has been greatly undermined with investments across all sectors being adversely affected. When investment is in jeopardy, livelihoods are negatively impacted. Worsening insecurity is adversely impacting lives and undermining livelihoods. This is taking a huge toll on both the social and economic life of the nation. Many local farmers have abandoned their farms in search of greener pastures elsewhere because of bandits hiding in many forests across the country.
In the early part of January, the Nigerian Meteorological Agency (NIMET), Human and Environment Development Agenda (HEDA) Resource Centre and OXFAM International predicted that lack of reliable weather/climate information and services in Nigeria’s agric sector posed prevalent risk to the attainment of food security and productivity in the country. They warned that if local farmers continued to ignore reliable weather/climate information and services in agric sector, the sector’s contribution to the country’s GDP (Gross Domestic Product) would be severely affected. NiMET’s Director-General/ Chief Executive Officer and Permanent Representative of Nigeria with the World Meteorological Organisation (WMO), Professor Mansur Bako Matazu, told newsmen that insecurity had disrupted the country’s agric sector in terms of food system and that the country could no longer afford farmers losing fortunes to non-compliance with reliable weather/climate information and services in the country’s agric sector.
Also, in Q1’22, the Governor of Central Bank of Nigeria (CBN), Godwin Emefiele, disclosed that the country’s agric sector was contributing about 30 per cent of the nation’s Gross Domestic Product (GDP). Emefiele stated this while de-livering a lecture at the 25th and 26th combined convocation of the Ekiti State University (EKSU), in Ado-Ekiti, Ekiti State, recently. In his speech, the CBN boss noted that Nigeria was overdependent on oil revenue, even though it only contributes just 10 per cent of the GDP, while agriculture contributes three times more, saying it was the reason behind the bank’s huge agricultural interventions in the Nigerian economy. Emefiele used the occasion to reveal that the bank had granted N948 billion to 4,478,381 smallholder farmers in Nigeria to boost food production and also created 12.5 million direct and indirect jobs for Nigerian youths.
Dangote fertiliser commissioning
During the period under review, President Muhammadu Buhari commissioned the ultramodern $2.5 billion Dangote Petrochemicals and Fertiliser Company Limited Complex at Lekki Free Trade Zone in Lagos. At the commissioning, President Buhari stressed that the Dangote fertiliser, which is the largest fertiliser in Africa and the second in the world, was very strategic to Nigeria’s socio-economic development, in terms of attaining food sufficiency, job creation for the teeming youths and saving huge FX dependence from agric importation for the country. Mr. President noted that the coming on stream of the plant was creating huge opportunities in the areas of employment, trade, warehousing, transport and logistics. He also added that this would drastically create wealth, reduce poverty and secure the future of our nation. The president further explained that the new Dangote $2.5 billion fertiliser plant investment would replicate the success recorded in the country’s cement sector, in which Dangote cement is also the biggest player in the entire sector.
During the quarter under, African Export-Import Bank (Afreximbank) announced that it had committed $1 billion out of the estimated $10 billion required over the next 10 years for the successful roll-out of the African Continental Free Trade Area (AfCFTA) adjustment fund as part of efforts to ensure successful implementation of the deal. To this effect, the AfCFTA Secretariat and Afreximbank signed an agreement relating to the management of the adjustment fund to support African countries and the private sector to effectively participate in the new trading environment established under the pact.
There is no gainsaying that no positive growth was achieved amidst the macroeconomic challenges in the sector during the quarter.