Nigeria’s reliance on food imports has deepened, with the country spending a staggering $689.88 million on food products alone in the first quarter of 2024. This represents a 40% surge compared to the previous quarter and accounts for a hefty 17% of total import expenditure, according to data from the Central Bank of Nigeria (CBN).
The alarming trend underscores the nation’s growing food insecurity and the strain on its foreign exchange reserves. Experts warn that the country’s burgeoning import bill for food items could have severe implications for its economy and its ability to feed its growing population.
Food Import Outpace Other Sectors
The food sector has emerged as a major driver of Nigeria’s import bill, surpassing even manufacturing and oil and gas sectors in terms of foreign exchange expenditure. While industrial firms claimed the top spot with $1.94 billion in imports, the food industry’s rapid growth is a cause for concern.
The agricultural sector, ironically, recorded the lowest foreign exchange spending on imports at a mere $35.52 million. This stark contrast highlights the paradox of a nation with vast arable land struggling to feed itself.
Soaring Food Prices Fuel Import Surge
The surge in food imports coincides with a sharp rise in food prices. Imported food inflation skyrocketed by 25% in the first quarter of 2024, according to the National Bureau of Statistics (NBS). This figure represents a significant increase from 26.29% in January to 32.89% in March.
The relentless upward trajectory of imported food prices has put immense pressure on consumers, particularly low-income households. The situation is exacerbated by the parallel rise in general food inflation, which climbed from 35.41% in January to 40.01% in March.
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Government’s Controversial Import Policy
In response to the escalating food crisis, the federal government has approved a 150-day duty-free window for the importation of maize, husked brown rice, and wheat. However, this move has sparked heated debate among stakeholders.
Dr. Akinwunmi Adesina, President of the African Development Bank (AfDB), has criticized the policy, arguing that it could undermine Nigeria’s agricultural sector. He emphasized the importance of boosting local production to achieve food security and price stability.
Kabir Ibrahim, National President of the All Farmers Association of Nigeria (AFAN), echoed Adesina’s concerns, warning that duty-free imports could erode the gains made in domestic production. He urged the government to invest in supporting local farmers through subsidies on inputs like machinery, fertilizers, and chemicals.
Trade Deficit Widens
The increased appetite for food imports has contributed to Nigeria’s widening trade deficit. Total imports in the first quarter of 2024 reached N12.64 trillion, representing a 39.65% increase compared to the previous quarter. China emerged as Nigeria’s top trading partner, accounting for 23.18% of total imports.
Food and beverage imports alone amounted to N1.59 trillion in the first quarter, constituting 12.59% of total imports. This represents a substantial increase from the previous quarter and a staggering 115% growth compared to the same period in 2023.
If You Ask Me
The growing reliance on food imports has far-reaching implications for Nigeria’s food security and economy. The drain on foreign exchange reserves exacerbates the country’s balance of payments challenges. Moreover, it undermines efforts to achieve self-sufficiency in food production and create jobs in the agricultural sector.
To address these issues, Nigeria must prioritize investments in agriculture, improve infrastructure, and create enabling policies to support local farmers. Diversifying the agricultural sector and promoting value addition to local products are also crucial steps towards reducing dependence on imports.
The government’s role in fostering a conducive environment for agricultural development is paramount. By providing adequate support to farmers, investing in research and extension services, and ensuring access to markets, Nigeria can reduce its vulnerability to global food price fluctuations and build a more resilient food system.
