Responding to the Impact of COVID-19 on Food Security and Agriculture in Nigeria

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Tuesday, June 30, 2020 12:55 PM / By PwC Nigeria / Header Image Credit: PwC Nigeria

 

The Nigerian agricultural sector holds the key to the country's drive for economic diversification. The sector has grown consistently at an average of 2.6% over the past three years. As at Q1 2020, agriculture accounted for about 22% of the Nigerian gross domestic product (GDP) compared to oil and gas (9.5%), manufacturing (9.7%), financial services (3.8%) and trade (16.1%). In addition, the agricultural sector remains the largest employer of labour in the country, providing jobs for more than one-third (86.4%) of the Nigerian labour force.


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However, agriculture in Nigeria still faces many challenges. Some of these include adverse weather conditions associated with climate change, herder-farmer clashes, terrorism in the northeast, cattle rustling, low levels of mechanisation, and poor research and development activities.

 

To bridge the demand-supply gap brought about by low agricultural productivity, the country imports agricultural products such as wheat, palm oil, etc. In four years (2016-2019), Nigeria's cumulative agricultural imports stood at N3.3 trillion, four times more than the country's agricultural exports of N803 billion in the same period.

 

The country's population growth rate has already outpaced the rate of food production. According to the United Nations, the number of people living in Nigeria is expected to more than double by 2050 from its current level of over 200 million people.

 

The results of the government's policies to reposition the agricultural sector have been mixed. The Agricultural Promotion Policy (APP) introduced by the Federal Ministry of Agriculture and Rural Development (FMARD) and various intervention programmes by the Central Bank of Nigeria (CBN) such as the Anchor Borrowers Programme, have led to transformation in the sector especially in the area of rice production.

 

However, some of these policies score poorly in the attainment of self-sufficiency for key agricultural products. For example, annual wheat production which stands at 0.06 million metrics tonnes is barely able to cover local demand of over 5 million metrics tonnes despite the APP setting 2018 as the target year in which the nation would have attained self-sufficiency in wheat production. Wheat dominates Nigeria's agricultural imports and accounted for about 40.7% (or N390.6 billion) in 2019.

 

With COVID-19, the challenges hampering the attainment of food security in Nigeria could deepen. The impact is already being felt in the form of rising food prices. By April 2020, food inflation had risen to 15% compared to 14.7% in December 2019. The intra and interstate movement restrictions could hinder farmers from accessing their farms in other state locations or procuring inputs such as seedlings and farm implements. Furthermore, the restrictions may hamper food distribution, which could result in post-harvest losses, reduced market supply and further increases in food prices.

 

Also, export earnings from agribusiness could be affected in the coming months due to lockdown in countries that import Nigeria's agricultural produce.

 

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CreditThe post Responding to the Impact of COVID-19 on Food Security and Agriculture in Nigeria first appeared in PwC Nigeria on June 29, 2020

 

This report has been republished with the permission of PwC Nigeria.

 

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