Agriculture: Sustained Growth Amidst Perennial Bottlenecks

Proshare

Thursday, August 05, 2021 / 08:28 AM / By United Capital Research / Header Image Credit: BBC

 

The agriculture sector remains a key interest sector in Nigeria's plans to diversify its economy. Despite increased interventions from policymakers, the sector's output has remained largely underwhelming over the last three years, with an average growth rate of 2.2%, owing largely to low mechanization levels, high insecurity in key food-producing states and perennial supply chain bottlenecks.

Proshare Nigeria Pvt. Ltd.

In Q1-2021, the agriculture sector grew by 2.3% y/y, a 7bps rise from Q1-2020 and a 1.1% fall from Q4-2020, largely supported by commendable policy support and financial intervention. Some of the interesting policy interventions include approval of the $1.2bn financing for the Green Imperative Programme (a partnership with the Government of Brazil), sustained implementation of the Presidential Fertilizer Initiative (PFI) which has resulted in 44 blending facilities as of Q1-2021 (compared with 4 as at 2016) and extension of the phosphate supply deal between Morocco and Nigeria in Mar-2021. Other existing schemes to provide funding for farmers were sustained such as Commercial Agriculture Credit Scheme (CACS), CBN's Agribusiness Small & Medium Enterprises Investment Scheme (AGSMEIS) and the Anchor Borrowers Program (ABP). 

Looking ahead, given the positive recovery prospects of the broader economy in 2021, we expect the agriculture sector to expand. However, the structural problems that continue to stymie the sector's growth must be addressed. Aggressive investment in farmer education and R&D, as well as storage and transportation infrastructure will go in long way in boosting industry yield and easing route-to-market bottlenecks. That said, we expect the persistent insecurity challenges in food-producing states will continue to weigh on the sector's growth.

Proshare Nigeria Pvt. Ltd.

Related News

  1. Nigeria's Real GDP Grew by 0.51% YoY in Q1 2021 - NBS
  2. Food Prices Still on the Rise
  3. Average Price of 1kg of Tomato Increased by 13.92% YoY in June 2021 - NBS
  4. Buhari Inaugurates Integrated Farm Project in Katsina State
  5. Stakeholders At Welcome2Africa Explore Opportunities for Increasing Agri-Financing in Nigeria
  6. CBN Plans Increased Supply of Rice to Reduce Price
  7. Average Price of 1kg of Rice Increased by 0.65% MoM to N544.09 in May 2021
  8. Welcome2Africa Set to Host the Inaugural Agri Investments and Capital Market Forum 2021
  9. Insecurity and Food Production in Nigeria
  10. NESG, UN, Finance Ministry Explore Ways of Improving Nigeria's Food Systems
  11. Ecobank, Vanguard Agribusiness Summit Explores Food Security Through Digitization
  12. Cassava Revolution: Tackling the Right Problems
  13. NESG Lauds FG for Signing Plant Variety Protection Bill into Law
  14. Emefiele Inaugurates Rivers Cassava Processing Company

Proshare Nigeria Pvt. Ltd.
READ MORE:
Related News
SCROLL TO TOP