BusinessDay
NigeriaDecides2023

Nigeria’s agric shows strength in H1 despite escalating insecurity, Russian-Ukraine war

..as food prices surge

Despite the worsening issues of terrorism, banditry, and kidnapping in Africa’s most populous country and the global supply chain obstruction caused by the Russian-Ukraine war, Nigeria’s agricultural sector still recorded a significant growth that supported the country’s economic growth in the first quarter.

The sector grew by 3.16 percent in the first quarter of 2022 in real terms, higher by 0.88 percent when compared to the corresponding period in 2021. The sector contributed 22.21percent to the total growth recorded for the period, data from the National Bureau of Statistics (NBS) shows.

Agricultural export for the first quarter grew by 58.35 percent to N202 billion from 127 Million in the corresponding period of 2021. The growth was driven by cocoa and sesame exports for the period.

“Our farmers are resilient despite the numerous challenges in the sector,” Ibrahim Kabiru, national president of the All Farmers Association, said.

He noted that the issue of insecurity in the country needs to be addressed to ensure that farmers carry out their activities without any form of fear.

Abiodun Olorundenro, manager, Aquashoots said that the strength shown by the sector in the first half of 2022 reaffirms the potential in the sector to spur growth.

However, he stated that the resilience shown by the country’s agriculture is only temporary, noting it can be sustained when the government provides more incentives to farmers, tackle issues of insecurity, and drive mechanisation.

Food prices in Africa’s most populous country have been making a rapid climb since the beginning of the year, making food items surge by over 50 percent year to date.

Food producers and retailers are now facing intense pressure from rising energy costs – induced by the Russian-Ukraine war as they have to spend more on diesel to power their factories and logistics.

“Prices of food are escalating and it is important we drive down cost. To do this farmers must make mechanisation and innovation the centre of farming methods as it is critical in boosting productivity and maximising cost,” Olorundenro who was earlier quoted said.

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Similarly, Tola Faseru, former national president of the Cashew Association of Nigeria said, “Sadly, food prices are surging again when we are trying to build back from the pandemic impacts.”

“Since diesel prices started surging, the cost of food transportation has doubled and this has already started affecting commodity prices,” Faseru said.

Inflation in Africa’s biggest economy hit 17.7 in May, and the food index rose by 19.5 percent in May 2022 compared to 18.37 percent in April 2022.

The inflationary pressure has reduced consumers’ disposable income, hence, making basic needs elude Nigerians.

The limited purchasing power of Nigerians puts basic food commodities out of the reach of many and a country with about 33 million unemployed people.

“Things are just getting hard daily for Nigerians and the government is not doing anything about it,” said Obiora Madu, CEO, and president of Multimix Group.

“Logistics is already a big challenge in Nigeria and now with the surge in diesel prices, it has further compounded the problem. Transporting fresh vegetables now with a cold chain will be almost impossible,” Madu said.

BusinessDay analysis of items in the basket that determine inflation, using the selected food prices report by NBS, finds that a litre of fuel which was sold for an average of N65, now sells for N173 per litre. A 12.5kg of gas sold for N3, 000 in 2015 now sells for N8, 726 in 2022.

Similarly, a litre of vegetable oil sold 250 in 2015 and now sells for N996. A slice of bread sold for N300 in 2015 now sells for N456 in 2022. A dozen eggs sold 320 in 2015 and now sell for N689 in 2022.

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