| Agriculture |     2693 VIEWS  |
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Thursday,
February 22, 2018/ 08.49 AM/ FBNQuest Research
One
such is the CBN’s agricultural credit guarantee scheme; a fund established to
assist farmers with little or no collateral with which to gain access to loans
from commercial banks. In Q4 2017, N1.5bn (US$4.2m) was guaranteed to 10,259
farmers under this scheme compared with N2.4bn recorded in the previous
quarter.
At a recent briefing on Nigeria’s Economic
Outlook 2018 we attended in Lagos, government officials alluded that
agricultural GDP has not accelerated at the desired pace (that is, given the
several interventions within the sector) due to output losses. This is not
surprising since storage and logistics issues still exist.
In Q3 2017 the sector grew by 3.1% y/y.
Crop production remained the largest contributor to agriculture GDP, accounting
for 92% of the total. Meanwhile livestock farming represented just 5%.
Based on CBN data, importation of food and
agricultural products accounted for 10.4% and 1.7% respectively of fx
utilisation in Q3 2017, compared with 8.4% and 1.6% recorded in the previous
quarter. The initial ban on access to fx for 41 items via a CBN circular
distributed in June 2015 assisted with curbing imports of specific agricultural
and food products. 
However, due to better access to fx
(including the parallel market), it seems this ban now has a limited effect. It
is widely reported that the palm oil sector is currently suffering a supply
glut. Local producers such as Okomu Oil are competing with imported
alternatives. Okomu currently mills 30 metric tonnes per hour.
There is therefore a need for
new measures to control this import influx, which is undermining the import
substitution strategy.
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