September 19, (THEWILL) – Notwithstanding the continued decline in the agricultural sector as shown in the quarterly Gross Domestic Product (GDP) reports in recent times, a section of Nigerian farmers are recording huge returns on their investments in agriculture through commodity exports. Many are also accessing the various intervention funds created by the Central Bank of Nigeria (CBN) to boost their productivity and earn foreign exchange.
The recent National Bureau of Statistics (NBS) quarterly report on “Foreign Trade in Goods Statistics (Q2 2021)” revealed that Nigerian farmers earned a total of N292.43 billion in the first half of 2021). These proceeds exceed the N205.11 billion value recorded in the corresponding period of 2020 by N82.32 billion or 42.5 per cent.
According to the report, the farmers earned a total of N165.26 billion in the second quarter (Q2) of 2021 as against N127.17 billion achieved in the first quarter (Q1) of the year, representing a 30 per cent increase during the period. The items include raw, processed and semi-processed commodities available in huge quantities in various parts of the country.
The report captured 18 various agricultural commodities that earned above N700 million during the period, with four recording over N10 billion and two yielding returns of above N5 billion. Cocoa and cashew nuts were in two categories: ‘Good fermented Nigerian cocoa beans’ and ‘superior quality raw cocoa beans’; ‘cashew nuts in shell’ and ‘cashew nuts, shelled’. They all had different export destinations mainly in Europe, South East Asia and the United States of America.
“Topmost of these exported agricultural products were good fermented Nigerian cocoa beans exported mainly to the Netherlands (N16.48 billion), Malaysia (N9.32billion) and United States (N8.41billion). The next leading product was cashew nut in shells exported to Vietnam (N33.54billion) and India (N3.24billion). Other major exports under this sector include Sesamum seeds, whether or not broken, exported to Japan in the value worth N7.28billion, China N7.14 billion and coconuts N9.94 billion respectively,” the NBS stated in the Q2 2021 report.
Among the exported agricultural commodities, also, were ‘Brasil nuts in shell’, ‘Other frozen shrimps and prawns’’, Natural cocoa butter’, ‘Palm nuts and kernels’, ‘Ginger neither crushed nor ground’, and ‘Other coconuts – fresh or dried, whether or not shelled or peeled’.
The farmers also exported ‘frozen rock lobster and other sea crawfish’, ‘sesame oil and its fractions’, ‘Cassia tora’, ‘Shea cake’, ‘Ginset roots – fresh or dried used in perfumery and in pharmacy or for insecticidal,’ as well as ‘soya beans (excluding seeds)’.
The value of agricultural exports increased by 29.95 percent in Q2 2021, compared with Q1 2021, and 111.8 percent compared with Q2 2020. The NBS report released in August 2021 showed that the economy recorded a Gross Domestic Product (GDP) growth of 5.01 percent (year-on-year) in Q2 ’21. However, the agricultural sector maintained a declining trajectory over time. In the review period (Q2 ’21), the sector grew by 1.30 per cent (year-on-year) in real terms. This represented a decrease of -0.28 per cent points from the corresponding period of 2020 and a decrease of -0.97 percent points from the preceding quarter, which recorded a growth rate of 2.28 percent. On a half-year basis, the sector grew 1.77 percent in 2021 compared to 1.88 per cent for Q1 ’20. On a quarter-on-quarter basis, the sector grew at 5.55 per cent.
By contribution, the agricultural sector accounted for 23.78 per cent of the overall GDP in real terms in Q2 ’21, lower than the contribution in Q2 ’20 which stood at 24.65 per cent, but higher than in Q1 ’21 which recorded 22.35 per cent. The report further showed that the Q2 ’21 figure was the lowest since 2012 published by NBS when the sector recorded a growth of 6.7 per cent, followed by 2.94 per cent in 2013. In the following year, 2014, the agricultural sector grew by 4.27 per cent and dropped 3.72 per cent in 2015.
The figures for the following years were 4.11 per cent, 3.45 per cent and 2.12 per cent in 2016, 2017 and 2018, respectively. The sector recorded 2.36 per cent and 2.17 per cent in 2019 and 2020, respectively, before nose-diving to 1.3 per cent in Q2 ’21.
The CBN intervention funds have helped to boost productivity, create jobs, make the SME sector more viable and support commodity export. The funds include the Agricultural Credit Guarantee Scheme (ACGS); Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL); Commercial Agriculture Credit Scheme (CACS); the N220 billion Micro, Small and Medium Enterprises (MSME) Fund; the Anchor Borrowers’ Programme and the Small Medium Enterprise Credit Guarantee Scheme (SMECGS), among others.
In its bid to ensure that businesses across all sectors of the economy sustained their operations after the COVID-19 pandemic, the apex bank introduced several loan opportunities under its intervention arrangement which favour agriculture. These include the AGSMEIS Loan for SME’S and Agricultural Businesses Without Collateral; Anchor Borrowers Programme (ABP) Intervention For Agriculture; Accelerated Agricultural Development Scheme (AADS Loan); MSMEDF Loan – Micro, Small and Medium Enterprises Development Fund.
To achieve the objectives of the intervention programme, some major challenges must be addressed.
The worsening spate of insecurity has a serious effect on agriculture because farmers also face the challenge of flooding and famine, which affects their ability to plant and harvest. Post-harvest challenges also persist. This leaves the farmers to contend with middlemen, transportation, storage and extortion by government revenue officials across the states and local government areas. The chaotic environment at the Lagos ports, coupled with extortion by security agents and intractable traffic congestion, creates a nightmare for farmers that engage in export.
Another challenge concerns quality. The Director-General of the National Agency for Food and Drug Administration and Control (NAFDAC), Prof Mojisola Adeyeye, recently expressed concern over the frequent rejection of exported food and agricultural products from Nigeria by the United States (US) and the European Union (UN) member countries due to poor quality. She called on all the regulatory agencies at the port saddled with the responsibility of ensuring high quality of imports and exports to find urgent and lasting solutions to Rapid Alert System for Food and Feed (RASFF) Border Rejection Notifications from the European Commission on products originating from Nigeria.
The World Bank has also urged the Federal Government to invest in its people through education, skill acquisition and health.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
