Government officials in Abuja are struggling for answers as to why Nigeria’s agriculture sector has not powered to the point of becoming a serious contender among sectors contributing to growth of the economy after years of serious attention.
Consider the credit injection into agriculture by government agencies since the 1970s and recently the impactful anchor borrowers programme launched by the Central Bank in 2015 as well as the federal government’s own fertilizer initiative.
Despite this, agriculture growth has been disappointing and this is one other bitter lesson from the last GDP numbers released this week.
In a note Wednesday titled “many more losers than winners”, analysts at FBNQuest Capital said of agriculture, “agriculture barely made our chart. Output losses from poor storage and transport with insecurity in food-growing areas have taken their toll.”
Growth in the critical area of agriculture has reduced if you take a good look at our chart.
FBNQuest put together this chart to show the best performing activity sectors among those accounting for at least 1% of constant price GDP.
“The majority”, the report said, “shrank due to the selective lockdown designed to combat Covid-19, the major hit to the oil price and, to a lesser extent, the deterioration in external demand.
“Trade, the second largest sector and the true barometer of demand, contracted for the fifth successive quarter.” This clearly shows that even before covid-19, the Nigerian economy was already challenged. It can be likened to a car which lost petrol as it began to climb the hill.
However, financial and insurance again enjoyed top spot in the chart, which is attributable to the healthy growth in banks’ lending volumes in response to the increase in their minimum loan-to-deposit ratio set by their regulator.
According to the analysts, “we should not overlook the CBN’s own accelerated interventions, which contributed to the 22% rise of N3.46trn in gross credit in the 12 months to June. These have gathered momentum as the CBN’s response to the virus.”
The second-best performer in Q2, information and communications, enjoyed a boost from the lockdown as mandatory home working brought a sharp rise in the use of the digital tools on offer from the mobile operators.
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