Nigeria’s agricultural Foreign Direct Investment (FDI) surged by 226.45 percent in the first three months of 2024 compared to the same quarter in 2023, amid worsening insecurity.
Data from the National Bureau of Statistics capital importation report shows that foreign direct investment into agriculture – a major sector in the country – hit $15.80 million in the first quarter of 2024 from $4.84 million in the same quarter of 2023.
On a quarter-on-quarter basis, this was a 3,661.90 percent rise from what the sector accrued in Q4 2023 ($0.42 million).
Read also: GHAPP to advance Nigeria’s agricultural technologies – Origin Tech
Despite insecurity preventing farmers from going to their farms with some now employing the services of private security personnel, foreign investment into Nigeria’s agric sector boomed to its highest since Q1 2022.
Africanfarmer Mogaji, chief executive officer of X-Ray Consulting, said due to the country’s inadequate food gap, foreigners are taking advantage and are hence investing more in the sector with the hopes of making profits.
“We are the ones seeing problems. Foreigners are seeing the opportunity,” he noted. “200 million people cannot run out of Nigeria and there’s no West African country that can cater to Nigerians’ problems in terms of feeding. They are also challenged.
Foreigners are seeing cash flow that’s coming in, and they will trip in more because 200 million Nigerians must feed,” said Africanfarmer.
He added that the value of the next quarter will likely be higher as more foreigners will tap into the country’s food crisis as a means to make gains on the back of soaring food prices.
According to him, Nigeria’s lack of solid policy systems and structures creates gaps in its food value chain, making it easy to be exploited by foreigners.
While the inflow of foreign investment surged in the agric sector, the fishing subsector did not attract any investment for the first three months of 2024.
Also, the sector’s GDP growth contracted in Q1 2024 to 0.18 percent from 2.19 percent in the same period last year.
Ibrahim Tajudeen, director of research and strategy at Lagos-based investment bank Chapel Hill Denham, noted that the obvious gap in food supply across the country is a major driver of this surge.
Tajudeen said global stakeholders are showing interest in Nigeria’s food value chain because of the country’s obvious food crisis.
Read also: Of 40 million agricultural households and a nation in hunger
“Agriculture is one of the major sectors in Nigeria and foreign investors will find it interesting to invest in it given our population Also, given the fact that our local food supply is below demand will also attract foreign investors,” he said.
He added that should insecurity, along with other issues limiting the sector from meeting Africa’s most populous nation’s food needs, be tackled, the sector will further experience a surge in its investments.
Nigeria’s total capital importation grew by 198.06 percent in the first quarter of 2024, rising from $1.13 billion in Q1 2023 to $3.37 billion in the period under review, while it increased 210.16 percent on a quarter-on-quarter basis from $1.08 billion in Q4 2023.
