Post by Trade Coach on Jun 20, 2021 18:53:57 GMT 1
Nigeria Spends Whopping N3.1 Trillion On Agricultural Imports Despite Border Closures and Bans By The Government
The importation of Agricultural products has continued to skyrocket in the country despite huge funding by the government to increase productivity in the Agricultural sector of the economy.
From the report published by the National Bureau of Statistics (NBS) recently, Nigeria’s import of agricultural products surged by a whopping 140% year-on-year in the first quarter of 2021.
The report indicates that Nigeria imported agricultural items worth N630.81 billion in the same period compared to N262.1 billion in quarter 1 of 2020.
This indicates the highest import in any single quarter since 2016 in the agricultural sector.
The report also revealed that in that past two years, between Q2 of 2019 and Q1 of 2020, Nigeria has spent N3.1 trillion on agricultural imports.
Why have agricultural imports continued to increase at such an alarming rate despite hundreds of billions of Naira in funding backed by the CBN’s initiative?
Surprisingly, the Central Bank of Nigeria explained that the various intervention facilities aimed at stimulating growth in the sector have started yielding positive results.
What are the initiatives introduced by the government to stimulate growth in the agricultural sector of the Nigerian economy?
They include:
The Anchor Borrowers’ Programme
Targeted Credit Facility
Agri-Business Small and Medium Enterprises Investment Scheme (AGSMEIS)
The following programmes are the ones stated by the apex bank in its MPC briefing.
N631.4 billion to 3.11 million smallholder farmers cultivating 3.8 million hectares of land, under the Anchor Borrowers’ Programme.
29,260 beneficiaries received N111.7 billion for the AGSMEIS, while 548,345 beneficiaries have received N253.4 billion under the Targeted Credit Facility.
Government’s intervention in the agricultural sector through the CBN has been numerous, but why improvement had been slow beats our imagination.
Despite these numerous interventions in the sector, Agricultural imports continue to rise; and it has been triggering multiple devaluations of the Naira.
Manufacturing companies are still demanding and importing raw materials for their production.
The stimulation of local production of agricultural commodities is still impeded mainly due to the high reliance of the country on the importation of most of its materials for production.
Wheat is an important part of local production in the Nigerian food industry; but large quantity of the commodity is being imported into the country annually. It cost the Federal Government about N222 billion in the first quarter of 2021, and last quarter of 2020. This is translating to an annualized cost of N1.0 trillion ($2.0 billion).
The cost of importing agricultural commodities we can conveniently produce in Nigeria is becoming too unbearable for the government.
Uninspiring growth despite huge expenditure
We can remember that in 2019, the Federal Government took a decision to close all land borders in the country; the government stated that the decision is to tackle smuggling and other sharp practices at the borders.
The government also claimed that they closed the borders to increase the tempo of agricultural revival in the country. It also placed restriction of forex allocation for the importation of food items from the Central Bank of Nigeria.
With all these actions, the economy was still growing at a very slow rate for that past two years. The agricultural sector is the highest employer of labour in the country; therefore if it is not growing, the economy with remain stagnant.
A simple look at the country’s GDP data reveals that the agricultural sector grew by only 2.28% in the first quarter of 2021, with an annual growth of 2.17% in 2020, and 2.36% in 2019.
The data under consideration shows that the agricultural sector contributed to the economy only 22.35% a decrease from 26.95% it recorded in the previous quarter.
Experts believe that the major cause of steep increase in agricultural imports is the country’s inability to produce sufficiently for our local consumption.
The second major problem is that we export most of our raw materials and import finished goods; this will naturally affect our balance of trade negatively.
The government needs to put in more effort in eliminating insecurity in the Northern part of the country. The big buyers and industries are not ready to make risky investments due to fear of bandits and terrorists marauding in many of the states.
The Government is daily encouraging Nigerians to go into agriculture and export business to boost the nation’s foreign exchange earnings thereby improving the economy.
Stay with us. We are specialists in training people who want to start the business of agriculture and Export. Register today by contacting the admin of the forum.
The importation of Agricultural products has continued to skyrocket in the country despite huge funding by the government to increase productivity in the Agricultural sector of the economy.
From the report published by the National Bureau of Statistics (NBS) recently, Nigeria’s import of agricultural products surged by a whopping 140% year-on-year in the first quarter of 2021.
The report indicates that Nigeria imported agricultural items worth N630.81 billion in the same period compared to N262.1 billion in quarter 1 of 2020.
This indicates the highest import in any single quarter since 2016 in the agricultural sector.
The report also revealed that in that past two years, between Q2 of 2019 and Q1 of 2020, Nigeria has spent N3.1 trillion on agricultural imports.
Why have agricultural imports continued to increase at such an alarming rate despite hundreds of billions of Naira in funding backed by the CBN’s initiative?
Surprisingly, the Central Bank of Nigeria explained that the various intervention facilities aimed at stimulating growth in the sector have started yielding positive results.
What are the initiatives introduced by the government to stimulate growth in the agricultural sector of the Nigerian economy?
They include:
The Anchor Borrowers’ Programme
Targeted Credit Facility
Agri-Business Small and Medium Enterprises Investment Scheme (AGSMEIS)
The following programmes are the ones stated by the apex bank in its MPC briefing.
N631.4 billion to 3.11 million smallholder farmers cultivating 3.8 million hectares of land, under the Anchor Borrowers’ Programme.
29,260 beneficiaries received N111.7 billion for the AGSMEIS, while 548,345 beneficiaries have received N253.4 billion under the Targeted Credit Facility.
Government’s intervention in the agricultural sector through the CBN has been numerous, but why improvement had been slow beats our imagination.
Despite these numerous interventions in the sector, Agricultural imports continue to rise; and it has been triggering multiple devaluations of the Naira.
Manufacturing companies are still demanding and importing raw materials for their production.
The stimulation of local production of agricultural commodities is still impeded mainly due to the high reliance of the country on the importation of most of its materials for production.
Wheat is an important part of local production in the Nigerian food industry; but large quantity of the commodity is being imported into the country annually. It cost the Federal Government about N222 billion in the first quarter of 2021, and last quarter of 2020. This is translating to an annualized cost of N1.0 trillion ($2.0 billion).
The cost of importing agricultural commodities we can conveniently produce in Nigeria is becoming too unbearable for the government.
Uninspiring growth despite huge expenditure
We can remember that in 2019, the Federal Government took a decision to close all land borders in the country; the government stated that the decision is to tackle smuggling and other sharp practices at the borders.
The government also claimed that they closed the borders to increase the tempo of agricultural revival in the country. It also placed restriction of forex allocation for the importation of food items from the Central Bank of Nigeria.
With all these actions, the economy was still growing at a very slow rate for that past two years. The agricultural sector is the highest employer of labour in the country; therefore if it is not growing, the economy with remain stagnant.
A simple look at the country’s GDP data reveals that the agricultural sector grew by only 2.28% in the first quarter of 2021, with an annual growth of 2.17% in 2020, and 2.36% in 2019.
The data under consideration shows that the agricultural sector contributed to the economy only 22.35% a decrease from 26.95% it recorded in the previous quarter.
Experts believe that the major cause of steep increase in agricultural imports is the country’s inability to produce sufficiently for our local consumption.
The second major problem is that we export most of our raw materials and import finished goods; this will naturally affect our balance of trade negatively.
The government needs to put in more effort in eliminating insecurity in the Northern part of the country. The big buyers and industries are not ready to make risky investments due to fear of bandits and terrorists marauding in many of the states.
The Government is daily encouraging Nigerians to go into agriculture and export business to boost the nation’s foreign exchange earnings thereby improving the economy.
Stay with us. We are specialists in training people who want to start the business of agriculture and Export. Register today by contacting the admin of the forum.
