The agriculture sector continues to garner attention as a favoured route to economic diversification. The FGN’s import substitution strategy and related incentives have produced some positive results. The evidence can be seen in the reduction in recorded import volumes of these five major food items; rice, wheat, sugar, tomatoes and milk. According to a recent briefing geared towards the government’s agriculture interventions, over the past three years, the FGN has succeeded in trimming the import bill for the five food items by 60% to US$679m in 2017, compared with US$1.4bn spent in 2013.
- The CBN’s anchor borrowers programme (ABP), launched in 2015, has been instrumental in boosting agricultural output, especially domestic rice. In November the CBN announced that a total of N160bn had been disbursed under the ABP and that about 850,000 farmers had benefited from the funds. The media briefing revealed that over 50% of the total disbursement was channelled to rice farming.
- There are conflicting views from a recent report by the United States Department of Agriculture, which projects that Nigeria will import at least 400,000 tonnes of rice next year. This would make it the second largest importer of rice globally. The FGN insists that the target towards self-sufficiency in rice is well on track and claims the projections are baseless.
- There has also been increased investment in dairy farming, primarily through skills acquisition training. The federal ministry of agriculture and rural development organised training on good dairy practices with support from L&Z Integrated Farms, a Kano-based dairy farming firm with an installed processing capacity of 24,000 litres of milk per day.
National Bureau of Statistics (NBS); FBNQuest Capital Research
- The FGN is committed to transforming the sector into the economy’s new backbone. However, agricultural GDP has not accelerated at the desired pace (given the several interventions within the sector) due to output losses. Increased investment in storage and logistics would assist with reversing this trend. Other losses are attributable to the insecurity and unrest in the Middle Belt, the country’s agricultural hub.