Agriculture in the Nigerian Economic Summit Group (NESG) 2021 Macroeconomic-Outlook for Nigeria.

 The Nigerian Economic Summit Group (NESG) in February 2021 launched its 2021 Macroeconomic Outlook for Nigeria. In the report, the group revealed that only five (5) sectors experienced positive growth in 2020. These sectors include finance and insurance, information and communication, water supply, sewage and waste, human health, social services, and agriculture, which grew by 1.7%. Let’s now take a look at the recommendations of this report and the implications for the country’s agricultural sector in 2021.

The Existing Challenges

It’s no news that the growth of the Nigerian economy in 2020 was stalled by several factors including implementation of lockdowns that led to the disruption of supply chains, fall in crude oil price, and rising cases of insecurity in the country. Consequently, 16 out of 19 economic sectors contracted, leading to an overall contraction of the country’s GDP by 1.92% in the year under review.¹

While it may be expected that the lifting of lockdown measures, discovery of COVID-19 vaccines, and the recovery in the price of crude oil since Q4 2020 would translate to a much anticipated economic growth, this may not be so. The NESG reports that “several indicators point to the fact that many of the problems stalling the growth of the Nigerian economy existed pre COVID-19”². These problems include a steady decline in foreign investment inflow, a decline in external reserves, increasing inflation rates as well as a decline in the balance of trade due to increased importation. Furthermore, an unfriendly investment business environment remains a major challenge, as investor feedback captured by the NESG report centered on challenges such as corruption, bureaucracy in obtaining government approvals, policy inconsistencies, smuggling, poor infrastructural development, and insecurity.

The Way Forward

Having outlined the existing challenges, the report projected a three-case scenario for the Nigerian economy going forward, that is, the best, business-as-usual, and worst case scenarios. These scenarios are hinged on the government's approach towards four priority areas, viz-a-viz;

i. Macroeconomic stability

ii. Policy and regulatory consistency

iii. Sectoral reform and 

iv. Human capital development

Deductions from this report validate the assumption that if existing gaps in economic stability are to be bridged in 2021, addressing these four priority areas that cut across different sectors of the economy remain the nation’s best strategic option. Furthermore, in addressing the need for sectoral reforms, the report identified that between 2015 and 2019, crop production made the second-highest contribution to 92.2% of the country’s GDP. The sector contributed 37.2% to the country’s GDP only after telecommunications and information services which contributed 37.7%, while crude petroleum and natural gas in third place contributed 17.3%. This affirms the potentials of the country’s agricultural sector and the role it plays in ensuring economic stability.

Therefore, in focusing on the agricultural sector, we would expect to see more of the following;

1. Consistent and robust policies;

2. Elimination of regulatory and administrative bottlenecks especially in relation to the exportation of agro commodities produced in Nigeria;

3. Enabling a business environment that encourages more private sector-led investments (improved security, infrastructural development, better foreign exchange policies, etc)

4. “Thinking and doing technology”

5. Massive investment and total overhaul of the educational sector. This will produce sound and innovative graduates who will proffer creative solutions tailored to our challenges;

6. Efficient delivery by government MDAs and so much more.

In order for Nigeria to live up to its position as the “giant of Africa,” it is imperative to note that its efforts towards driving economic stability should remain at the center of every proposition. Foreign investors and domestic private businesses will not provide the needed support when the country’s business environment is unfavorable. Succinctly, as a matter of urgency, the government would need to put in more effort at all levels including Federal, State, and Local government to create the change we all desire.

Reference

1. Guaranty Trust Bank Plc (2021): Nigeria Macroeconomic and Banking Sector Themes for 2021

2. The Nigeria Economic Group (2021): NESG Macroeconomic-Outlook 2021. Retrieved from https://www.nesgroup.org/research  

 

The Author

Ogbole Esther

 

''As an agriculture enthusiast, I have long had a passion for contributing my quota to the growth and development of the Nigeria agricultural sector and this birthed an interest in research to see what and how precisely agricultural strategies are implemented in developed economies of the world and how they can be adapted to suit the Nigerian scenario''. 

The Pangs of Food Inflation in Nigeria

The National Bureau of Statistics has released Nigeria’s Consumer Price Index (CPI) and Inflation Report for October 2020. In this report¹ dated 16^th November 2020, the country’s current food inflation rate stands at 17.38%, up by 0.72% points and 4.32% higher month-on-month as compared with 16.66% in September. The report reveals that increase in prices of bread, cereals, potatoes, some tubers, meat, fish, fruits, vegetables and beverages led to the rise in food index for the month under review. 

In October 2015, Nigeria’s food index was 10.1%², implying a steady increment by about 7.28% points and marginally by approximately 72% within a five year period (2015 till date). Conversely, in October 2019, the index further increased to 14.09%,³ implying that between October 2019 and October 2020, Nigeria’s food index rose by 3.29% points and 23.35% marginally.

Before the release of the current CPI report, the prevalent hike in prices of food items which I consider a realistic expression of figures published by statisticians, has gained widespread attention across the country. This hike is influenced by factors such as activities of bandits in the North-West, general insecurity and reported cases of flood across the country, hoarders reserving food in speculation of the usual heightened demand during Christmas festivities, disruptions in the food supply chain, as well as the effects of the COVID-19 pandemic. Amidst inexhaustible challenges, many farmers produced less this season, driving food inflation higher before the 2021 harvest season⁴.

Already, experts report a looming food crisis in the country exit 2020 . The UN warns of “famines of biblical proportions” in the coming year, adding that parts of Burkina Faso, Nigeria, South Sudan and Yemen are approaching levels of critical hunger⁵. This implies as always that issues affecting food production and supply chain need to be urgently addressed.

In Nigeria today, the prices of many food items have either doubled or more than doubled in price. For example; 

FOOD ITEM	PRICE IN 2020 Q1 (NGN)	PRICE IN 2020 Q4 (NGN)	% ↑↓
50Kg Bag of foreign rice	26,000	34,000	30.7%
1 Bag of sweet potatoes	3,500	10,750	207%
1 Bag of onions	5,000	55,000	1000%
1 Sachet of tomatoes	50	150	200%
1 mudu of dry paper	800	1000	25%
1 mudu of beans	325	625	92%

Source: Author’s personal experience/one-on-one interactions with traders in some markets in parts of Northern Nigeria

In October, the #endsars protest which began as a peaceful demonstration by Nigerian youths calling for an end to police brutality and bad governance drifted into the vandalisation of government and private assets by hoodlums as well as the looting of COVID19 palliatives by hungry Nigerians. While the looting of palliatives was met with mixed reactions, I consider it a true representation of the Nigerian State, viz-a-viz failed structures and systems, weak institutions, deprived citizens, high rate of hunger and poverty and so much more. I also consider it a true reflection of the prevailing food inflation rate amidst so much hardship in the country. Sadly, the gap in income level of many Nigerians and prices of food in the market continues to widen, causing more citizens to struggle for survival.

Therefore, in view of the fact that these prices have been predicted to rise steadily, it has become critical to declare a state of emergency to reposition the Nigerian agricultural sector. In my article on food inflation published in June 2020⁶, one major solution proffered was the need to look inwards. Strengthening local capacity across various agricultural value chains is key! 

The solution is not in borrowing money from Brazil⁷ to fund food production, at least not yet. Until Nigeria’s agricultural sector is repositioned to address real-time issues, the government might just be borrowing to fill the pockets of some greedy, hungry and short-sighted Nigerians. In addition, there is the need to enhance the capacity of farmers in line with global best practices for sustainable agricultural intensification as well as strengthen the capacity of institutions saddled with promoting agriculture. This will include charging government agencies to deliver on their mandates amongst numerous sustainable approaches.

In conclusion, it is imperative to add that looking inwards also includes growing a fraction of what we eat as individuals and family units. Let’s grow our pepper, herbs, vegetables, maize, beans, groundnut and even tubers depending on available land space, bearing in mind that some of these food items can be planted in containers. By doing this, we would be adopting a holistic approach towards promoting sustainable food systems that will ensure food is available and affordable for all Nigerians.

References

1. National Bureau of Statistics (2020): Consumer Price Index October 2020. It can be accessed via https://nigerianstat.gov.ng/elibrary

2. National Bureau of Statistics (2015): Consumer Price Index October 2015. It can be accessed via https://nigerianstat.gov.ng/elibrary

3. National Bureau of Statistics (2019): Consumer Price Index October 2019. It can be accessed via https://nigerianstat.gov.ng/elibrary

4. The Green Investment Club (2020): There’s honestly no way to say this. Customer weekly newsletter delivered on 12/11/2020

5. The Hill (2020): UN warns of “famines of biblical proportions” within the next year. Online newspaper publication by Joseph Guzman on 16/11/2020. It can be accessed via https://thehill.com/changing-america/respect/poverty/526146-un-warns-of-famines-of-biblical-proportions-within-the-next

6. Grow4Peace (2020): Food Inflation: The Impact of COVID-19 on Food Demand and Supply in Nigeria. An article published by Ogbole Esther on 08/06/2020. It can be accessed via https://www.grow4peace.co.uk/2020/06/food-inflation-impact-of-covid-19-on.html

7. Premium Times (2020): What you need to know about Nigeria’s $1.2bn loan from Brazil. Online newspaper publication by Ntiedo Ekott. It cam be accessed via https://www.premiumtimesng.com/agriculture/agric-news/425277-what-you-need-to-know-about-nigerias-1-2bn-loan-from-brazil.html#:~:text=The%20Nigerian%20government%20has%20announced,at%20the%20House%20of%20Representatives.

The Author

Ogbole Esther

 

''As an agricultural enthusiast, I have long had a passion for contributing my quota to the growth and development of the Nigeria agricultural sector and this birthed an interest in research to see what and how precisely agricultural strategies are implemented in developed economies  of the world and how they can be adapted to suit the Nigerian scenario''.