Nigeria’s agricultural investment has dipped in the third quarter of 2023, hitting its lowest in nine years, data from the National Bureau of Statistics (NBS) show.
According to data from the NBS Capital Importation report, foreign direct investment in the agricultural sector hit a nine-year low with $4.64 million in Q3 2023, a 95 percent decline from $95.10 million recorded in the corresponding quarter of 2015.
Nigeria’s agricultural capital investment has been fluctuating on a high and low basis, but maintained a consistent decline since 2019, hitting its lowest nine-year period figure in Q3 2023.
On a year-on-year basis, foreign investment into the sector declined 84 percent from $29.68 million in the third quarter of 2022.
In July 2023, president Tinubu declared a state of emergency in the agricultural sector owing to the level of insecurity that has plagued the country and prevented foreign investors from investing in agriculture.
Experts have attributed the investment decline to the worsening insecurity in the country.
“Insecurity issues affecting distributors of agro products have been a challenge. Investors saw that they were not getting rewards for their investments into the sector, so they let it go altogether,” Abiodun Olorundero, operation manager at Aquashoots Limited said.
Abiodun went further to explain how much farmers have spent employing security personnel to safeguard cattle on their farms.
He also said that “fluctuation of naira value has not helped the situation either. Instability of the naira has discouraged foreign investors from investing as the naira to dollar rate is not what it used to be.”
According to the NBS report, the agricultural sector remains in dire need of increased interventions as food continues to be a major driver of inflation, contributing about 50 percent to the headline inflation rate.
On a quarter-on-quarter basis, investment into the sector declined 53.6 percent to $4.64 million in the third quarter of 2023 from $10.01 million in the previous quarter.
Also, Nigeria’s agricultural sector faces many challenges that impact its productivity.
The industry was disrupted by the COVID-19 pandemic which forced many farmers to halt their activities, and this tampered with food productivity.
Similarly, high insecurity has impacted farming activities in the country, and the situation intensified in 2023, forcing many farmers to abandon their farmlands.
According to the Food and Agriculture Organisation, Nigeria is expected to see about 26.5 million people in 2024 grapple with high levels of food insecurity.
With more investors lacking in the agricultural industry, its foreign direct investment might continue to decline, experts say.