Despite continued CBN interventions, Nigeria spends N1.9 trillion on agricultural import in 2021

Nigeria imported agricultural products worth 1.97 trillion naira in 2021, up 42% year-on-year from the 1.19 trillion naira recorded the previous year. It also represents the highest amount on record spent on agricultural imports in a year.

This is despite concerted efforts by the Central Bank to develop the Nigerian agricultural sector by intervening and supporting local farmers through various schemes. However, Nigeria continued to devote a large part of its scarce foreign exchange resources to the import of agricultural products.

Meanwhile, Nigeria earned 504.89 billion naira from agricultural exports in 2021, 57% more than the 321.54 billion naira recorded the previous year and 87% more than the 269.83 billion naira recorded in 2019. This brings the annual agricultural trade balance to a deficit of 1.46 trillion naira.

This is according to information extracted from the Foreign Trade Report, published by the National Bureau of Statistics (NBS).

The agricultural sector, which is the largest sector of the Nigerian economy, accounting for 25.9% of GDP, with an estimated value of N18.74 trillion, has been unable to meet local demand, let alone earn significant foreign exchange through export.

In 2021, the sector recorded 2.13% year-on-year growth in real terms, which is slower than the 2.17% growth printed the previous year. Over the years, several policies have been implemented with the aim of stimulating the growth of the Nigerian agricultural sector. Some of them include the banning of certain food imports, the closure of land borders and the financial injection into the sector.

CBN Agricultural Intervention

According to the latest MPC release from the Central Bank of Nigeria (CBN), the apex bank has intervened in the sectors of manufacturing/industries, agriculture, energy/infrastructure, health, among others.

  • Between November and December 2021, the CBN disbursed N75.99 billion to support the cultivation of over 383,000 hectares of maize, rice and wheat under Acor’s Borrowers Program (ABP), bringing cumulative disbursements under the program to N927.94 billion. more than 4.5 million smallholder farmers growing 21 commodities across the country.
  • The Bank has also released N1.76 billion to finance two (2) large-scale agricultural projects under the Credit for Commercial Agriculture Scheme (CACS).

In case you missed it

Nairametrics yesterday reported that the value of Nigeria’s international trade jumped 58% to N39.8 trillion in 2021, largely driven by the import bill.

  • Nigeria imported goods worth 20.84 trillion naira during the review period, 64% more than the 12.7 trillion naira recorded the previous year, while the value of exports increased. rose 51% year-on-year to N18.91 trillion.
  • However, Nigeria’s foreign trade deficit soared to 1.94 trillion naira from a deficit of 178.3 billion naira recorded the previous year.
  • Crude oil exports during the period increased by 53% to reach N14.41 trillion in 2021 from N9.44 trillion recorded in 2020.
  • On the other hand, the value of Nigeria’s non-crude oil exports was pegged at N4.49 trillion, 46% higher than the N3.08 trillion recorded the previous year.

What does that mean

Despite the continued contribution of the Central Bank of Nigeria in the agricultural sector, it seems that Nigerians are still importing foodstuffs in large quantities from foreign countries. This could be attributed to the supply shortfall in the economy, due to the ongoing security issues plaguing the northern regions of the country.

An increase in the import bill without commensurate export earnings means a negative trade balance and, therefore, puts increased pressure on the exchange rate. The CBN currently defends the naira in the official market, however, the parallel market also sells naira up to N580/$1.

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