Nigeria’s agricultural sector attracted its lowest level of investments since 2016, when the country refocused on agriculture after several years of neglect.
Data from the National Bureau of Statistics (NBS) capital importation report show that foreign direct investment (FDI) in the agric sector hit $95.8 million (N44.2bn) in 2022, down 73.8 percent from $366.07 (N168.7bn) million in 2021.
On a quarter-on-quarter basis, investment into the sector declined 97.1 percent to $6.94 million in the fourth quarter of 2022 from $366.07 million.
Prior to 2022, investments into the sector have grown consistently at an annual average of 82 percent since 2016 but went into reverse gear in 2022, BusinessDay’s analysis shows.
“There were lots of shocks that impacted the sector last year, and this might have also impacted the level of investments attracted,” AfricanFarmer Mogaji, chief executive officer of X-Ray Consulting, said in response to questions.
“Also, the slowdown in global investments reduced the number of investors- domestically and foreign who invested into the industry,” Mogaji said.
Nigeria’s agricultural industry has been experiencing several shocks since the pandemic disrupted the food system and hampered productivity.
High insecurity has impacted farming activities in the country, and the situation intensed in 2022, forcing many farmers to abandon their farmlands in 2022.
Also, prices of key inputs such as seeds, herbicides, pesticides, fertilisers, and agro machinery tripled in 2022 owing to the impact of the Russian-Ukraine war, making it increasingly hard for farmers to expand their production areas and forcing many to cut down on production.
Similarly, the increasing impact of climate change on communities is disrupting farming activities which farmers are struggling to cope with.
While no country is immune to the impacts of climate change, Nigeria is among the countries that are most vulnerable and least able to cope with the impacts of changing climate.
Nigeria 2022 flood experience is the worst on record, according to the Federal Ministry of Humanitarian Affairs.
The country’s farmers association says about 90 percent of farms were destroyed by flood incidents in major crop-producing states, thus leading to crop production shortfall.
“Farmers have been suffering from a combination of issues since the pandemic outbreak and the several shocks are also impacting investments,” said Ibrahim Kabiru, national president of the All Farmers Association of Nigeria.
“There will be a reduction in food production as a result of the effect of all these factors.”
However, Kabiru believed that despite the negative effect of owing to a combination of factors, there won’t be food scarcity in Africa’s biggest economy.
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Recently, the Food and Agricultural Organisation said that 25.3 million people in Nigeria would face acute food insecurity from June to August 2023 lean season – period when stocks are depleted, and food prices reach their peaks.
The 2023 figure is 5.85 million higher than the 19.45 million people projected to face acute food insecurity last year.
The fishing industry which is one of the sub-sectors of the agricultural industry attracted a $9 million investment in 2022.
As investments declined in the sector in 2022, the importation of food products increased. A total of N1.9 trillion worth of food products were imported into the country in 2022, indicating a five percent rise compared to N2 trillion spent on food importation in 2021, data from the NBS shows.
The sector grew by 2.05 percent in the fourth quarter as its performance was significantly hampered by severe incidences of flood experienced across the country, accounting for lesser growth relative to the fourth quarter of 2021 which stood at 3.58 percent.
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