Throwing money at agriculture has often been thought as the magic bullet to solve the myriads of problems confronting food production in Nigeria. But, BusinessDay’s analysis of data from the National Bureau of Statistics (NBS) shows the country may have been emptying funds into a cause that requires more than finance. Also, the funds may have been straying into the wrong pockets.
As lending to agriculture in Nigeria has increased every year since 2016, food imports have also continued to rise, even when the quantum of credit should symbolise investments that would help the country achieve food security.
While a myriad of factors that limit farm productivity remain unaddressed by some farmers, others are collectively threatened by violent attacks that make them wary of venturing to the farms, and even for every food produced, post-harvest losses remain high; between 25 and 50 percent.
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Bank lending to the agric sector has consistently risen in the last five years, likewise interventions from the government, and especially the Central Bank of Nigeria, but it would appear there is little to show for it in terms of sufficiency in food production.
“If Nigeria is spending so much to import food, it shows there is no impact of the investments from CBN or any other sources of credit,” said Kabir Ibrahim, national president, All Farmers Association of Nigeria (AFAN).
“Every time we criticize the anchor borrowers and interventions from the CBN, people tend to say we are not being fair, the government is achieving this and that. The actual people being impacted by the interventions from the CBN, their percentage vis-à-vis Nigerian farmers is low,” he said.
The first quarter of 2021 has already seen food imports of N964 billion doubling what was recorded in 2020 and three times what was spent three years ago in 2018 when it was N313 billion.
In 2016, Nigeria imported N1.13 trillion worth of Food and Beverages according to data from the National Bureau of Statistics, with N521.79 billion denoted primary products and N606.81 billion as processed. This was further clarified as a combination of imports for industry and household consumption. That same year, lending to the agric sector by Nigerian banks was N1.9 trillion, 40 percent more than the cost of importing food products.
By 2017, food imports increased to N1.45 trillion; N726.3 billion for primary and N730.1 billion for processed food. Yet, lending also increased to N2.07 trillion.
Food imports slightly reduced in 2018, to N1.39 trillion, but lending to agriculture was still on the rise at N2.2 trillion.
By the following year, 2019, food imports increased again, to N1.65 trillion, having an almost even split between primary and processed food imports at N811.07 billion and N837.97 billion respectively. And yet, again, lending to agriculture also increased, recording N2.72 trillion
Last year, 2020, even with all the challenges that accompanied it, food imports literally hit the roof, gulping N2.8 trillion. Lending to agriculture, as if tracking food imports, also jumped to a five-year high of N3.74 trillion.
There is a phenomenon about the middlemen, who are not really farmers but more interested in raw cash and often position themselves to benefit from intervention funds.
“The money is not going to the right people, that is the long and short of it,” he said.
For Nigeria to be self-sufficient in food production and many other aspects will remain impossible as long as there are several infrastructural deficits, said Ibrahim, asserting, “We can’t be self-sufficient but only living in hope.”
Ezekiel Ibrahim, president, Poultry Association of Nigeria, also told BusinessDay “the way the money is being disbursed, it is not falling into the right hands.”
According to Ibrahim, the CBN even suspended the anchor borrowers’ scheme due to alleged high levels of corruption earlier this year, and it raises unanswered questions as to why there are scanty operations even though lending has increased.
While the farmers may have focused more on intervention funds, credit from commercial banks as earlier stated in the article shows more funds have been going to the agric sector but not making expected impacts.
Even though some larger processors in agro-allied industries would have benefited from the commercial banks credits, likely more than actual primary producers, the desired impact of attaining sufficiency in food production remains largely unmet.
