• Monday, April 15, 2024
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Nigeria’s agric investment dips 94% in Q4, hitting 8-yr low

Nigeria’s agric investment dips 94% in Q4, hitting 8-yr low

Nigeria’s agricultural investment has dipped by 94 percent in the fourth quarter of 2023, hitting an all-time low in eight years, data from the National Bureau of Statistics (NBS) show.

The Capital Importation report of the NBS shows that investment into the agric sector declined to $42 million in Q4 2023 from $7 billion it recorded in the same period of 2022 on a year-on-year basis. The $42 million is the lowest since fourth quarter 2016 when the sector recorded $10.37 million worth of investments.

Nigeria’s agric sector continues to face many issues that pose as threat to investors. A major issue remains insecurity which has continued to hamper productivity as farmers abandoned farms for safety.

President Bola Tinubu in May 2023, after he was sworn in as president of Nigeria, promised to tackle food insecurity in the country as part of his reforms for the sector. Despite these promises, hunger and malnutrition rates is still accelerating as food inflation quickens.

Farmers who spoke to BusinessDay said that the country’s insecurity issues has continued to deter investments in the sector, while calling on the government to address the issue.

Abiodun Olorundero, managing partners at Prasinos Farms, said: “Insecurity issues affecting farmers have been a challenge. Investors saw that they were not getting rewards for their investments into the sector, so they let it go altogether.”

On a quarter-on-quarter basis, investment into the sector declined by 90.9 percent to $0.42 million in the fourth quarter of 2023 from $4.64 million the previous quarter.

“Nigeria’s agric sector is struggling,” Chidinma Ezeh, team lead at FarmCAS, shared with BusinessDay.

“Farmers are still recovering from the flood in Kogi that wiped many farms in 2022. This together with the kidnapping of farmers in South West and other parts of the country is affecting the agric sector,” Ezeh said.

The NBS latest consumer price index report shows Nigeria’s inflation hit a high of 29.90 percent in January. Food inflation, a bulk driver of headline inflation, rose to 35.41 percent in January from 33.93 percent in December 2023.

A BusinessDay market survey shows that food prices have doubled/tripled from their initial prices. Youths in Ibadan, Oyo capital recently took to the streets in protest against hunger that has seemed to become a new normal for many Nigerians.

After Tinubu declared a state of emergency in the agric sector in June 2023 because of food insecurity, the state of the sector has not experienced any significant growth yet.

Edobong Akpabio, executive director of Greenport Nigeria said: “Security issues in some states including the threat to life brings about loss of farmlands and consequently low food volume.”

She also said “High cost of food production such as land clearing, farm labour, seeds fertiliser, herbicide, pesticide, irrigation, logistics, is affecting farmers. Many farmers cannot afford these costs and have left the farm.

“When there is no farmer, there is no food,” she added.

This means that when there is no food, foreign investors cannot invest in the sector. When foreign investors do not invest, agric capital importation inflow continues to decline, further straining an already strained sector.