Agricultural imports hit N2.7 billion despite intervention loans of N129 billion

Despite spending no less than N129.084 billion on agricultural loans to farmers, Nigeria’s agricultural imports have continued to follow an upward trajectory, reaching N2.7 billion in 2021 alone.

According to our correspondent’s findings, the Central Bank of Nigeria and the Federal Government, through the Agricultural Credit Guarantee Fund (ACGSF), have guaranteed a total of N129.084 billion in agricultural loans to farmers in the country.

Figures from the National Bureau of Statistics in a recent report titled “External Merchandise Trade Statistics” also revealed that in 2021, Nigeria’s agricultural imports amounted to N2.7 billion, indicating an increase of 36.6% over the previous year, compared to the value recorded in 2020 (N1.7tn).

ACGSF Board Chairman, Mr. Stephen Okon while speaking in Calabar recently at the 39th ACGSF Board Meeting with Stakeholders on New Guidelines and Operations of ACGSF, had revealed that so far a total of N129,084 has been spent on agricultural loans. to farmers.

He said, “The ACGSF program has proven to be relatively successful in de-risking the agricultural sector in Nigeria as evidenced by the number of loans guaranteed since its inception to date. A total of 1,224,795 loan recipients worth N129.084 billion have been guaranteed since inception through February 2022.”

However, despite the substantial investments in agriculture, Nigeria’s agricultural exports, according to available statistics, continue to increase year on year.

According to figures drawn from four SNB quarterly foreign trade reports, during the reporting period, Nigeria, despite investing billions of naira in the agricultural sector, only managed exports worth 504.4 billion naira, leaving a trade balance of -2.2 billion naira. .

Further, a quick breakdown of imports revealed that in the fourth quarter alone, Nigeria imported various agricultural products like palm oil, wheat and other items to the tune of N300.21 billion, a development that threatens the local production of locally produced products in exportable quantities.

“Top agricultural products imported in the fourth quarter of 2021 included durum wheat (not seed) from the United Arab Emirates (174.80 billion naira) and Lithuania (57.21 billion naira). This is followed by palm oil crude from China valued at 20.28 billion naira and from Malaysia (16.49 billion naira). Palm olein worth 31.43 billion naira was imported from Malaysia,” a report from the NBS.

In an interview with The punchVice President of the Lagos Chamber of Commerce and Industry, Dr. Gabriel Idahosa, cited factors such as the maturity of agricultural products and insecurity, among others, as reasons for Nigeria’s massive investments in the agriculture had not produced tangible results.

He said: “There are reasons why this investment is not translating into a rapid drop in imports. First, the agriculture industry is a long-cycle industry except for some crops like vegetables which you can grow and harvest in six months. All other crops, even rice, require a certain period, a year or two, of investment before you begin to see results.

The second reason is that a significant part of this country, as we know, is affected by banditry and terrorism. So much of that investment has not translated into immediate agricultural activity at the expected level, and some of that investment is not having results.

He also said that CBN intervention programs often come with strings attached which would make them less profitable for farmers who sometimes resort to other sources of finance to avoid the stringent conditions.

“The third part is the effectiveness of importing the CBN intervention because farmers are complaining that, for example, equipment they can buy for, say, 5 million naira, the intervention of the CBN costs them about 7 million naira. They always say that CBN interventions are too expensive. So we have a problem with that. It’s not as profitable for them if they have other sources of funding where they can negotiate the terms.

Similarly, a Pan-Atlantic University economist, Associate Professor Olalekan Aworinde, criticized the federal government’s agricultural intervention program, describing it as a means by which bureaucrats funnel public funds back into their own pockets.

“All the funds that the federal government says they give to stimulate agricultural production, the first question we ask ourselves is, who are the beneficiaries? Are these beneficiaries traceable? If they are traceable, what are the conditions? We must first look at the evaluation of the impact of these loans. It’s obvious. This tells us that the money is probably going to the bureaucrats.

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