Wednesday, August 17, 2016 9:23am /FBNQuest Research
There is an increased focus on food security globally. As for Nigeria, the slide in oil price in mid-2014 which led to the country’s current macro challenges has assisted in placing the agriculture sector firmly on the front burner.
In the first quarter of the year, food products accounted for 9% of sectoral utilisation of fx, compared with 15% in the corresponding period in 2015. Although the fastest growing segment within the sector, the domestic shortfall for fisheries is estimated at 1.9 million metric tons per year (mmt/y). This explains Nigeria’s annual spend of N125bn (US$625m) on fish imports.
Based on industry reports, Nigeria has about 230bn cubic meters of water with a coastline of 853km which can support artisanal fisheries.
Data from CBN show that artisanal production accounted for around 76.6% of the 990,250 tonnes of fish produced in 2014.
For Nigeria to achieve self-sufficiency, increased private participation is required to boost production capacity of fish.
Funding remains one of the major roadblocks hindering expansion. According to the CBN’s recent Agricultural Credit Guarantee Scheme report, in H1 2016 only 874 loans were granted to fish farmers under the scheme amounting to N2.1bn (US$6.7m).
Given the funding crisis the segment faces, the impact of the scheme would be modest at best.
Fx sourcing issues have led to a decline in imports generally. In addition to this, the segment has also been affected by the CBN circular released last year. It listed 41 imported goods ineligible for fx from the interbank market: the list includes tinned fish in sauce/sardines and fish.
There have been reports of increased smuggling of fish (particularly frozen fish) into country. Late last year, the local media reported that an arm of the Nigeria Customs Service (NCS) confiscated N1.9m (US$5,900) worth of frozen fish.
In its recently released roadmap for the agriculture sector, the FGN identified lack of fish production inputs (such as fingerlings), security constraints in fisheries areas and poor water quality as reasons for low domestic output.
The new roadmap discloses the FGN’s intention to put in place policies which will enhance fish breeding as well as encourage the availability of fishery inputs by promoting hatchery development.
Notwithstanding the general slowdown in Nigeria’s economy, the FGN remains committed to its import substitution strategy in order to cut the country’s import bill as well as achieve the much needed economic diversification.
1. Fresh Look for Agriculture