NIGERIA – Nigeria’s agricultural investment has witnessed a sharp decline in the third quarter of 2023, reaching its lowest in nine years, data from the National Bureau of Statistics (NBS) revealed.
According to the Bureau, foreign direct investment in the agricultural sector plummeted to USD 4.64 million, marking a staggering 95 percent drop from USD 95.10 million recorded in the corresponding quarter of 2015.
President Tinubu’s declaration of a state of emergency in the agricultural sector in July 2023, in response to heightened insecurity impeding foreign investments, has underscored the challenges faced by the industry.
“Insecurity issues affecting distributors of agro products have been a challenge. Investors saw that they were not getting rewards for their investments into the sector, so they let it go altogether,” Abiodun Olorundero, Operations Manager at Aquashoots Limited, highlighted the impact of insecurity and currency fluctuations on the sector.
He further explained the costs incurred by farmers in employing security personnel and the destabilization caused by the fluctuating naira value.
The dire need for interventions in the agricultural sector is evident, given its substantial contribution of about 50 percent to the headline inflation rate, as per the NBS report.
However, the sector faces numerous challenges, including disruptions caused by the COVID-19 pandemic and escalating insecurity that has forced farmers to abandon their fields.
Export processing centers hope to bolster sector’s recovery
Addressing this scenario, Nigerian Aviation Handling Company (NAHCO) Plc has invested one billion Naira in an export processing center in Lagos.
Indranil Gupta, the Group Managing Director, expressed plans to replicate this initiative in other key cities if the Lagos center proves profitable, emphasizing the importance of standardization in the export process.
“The idea is that Nigerian products will be in one shop where they will be well sorted, arranged, and packaged before being transported. We plan to put forward some ideas on improving exports before the Aviacargo committee,” Gupta stated.
Saheed Lasisi, the Group Executive Director of Nacho, emphasized their commitment to spearheading the export business by collaborating with farmers and exporters. “Our focus is to encourage Nigerian exporters and farmers,” he emphasized.
However, challenges persist due to the depreciation of the naira, resulting in increased operating costs for importing handling equipment, as outlined by Gupta.
Despite these hurdles, there remains optimism about the potential for growth in the sector and its ability to become the continent’s food basket with the right support and investments.
The Export Processing Centers and similar initiatives aim to address the challenges faced by the agricultural sector, providing hope for its revitalization amidst ongoing difficulties.
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