As Nigeria laments its reported annual loss of $10bn in commodity exports, stakeholders say the country may face a bleak future and lack of competitive edge in the African free trade market unless something is done to improve the situation.
Nigeria recently signed the African Continental Free Trade Agreement and there have been talks that the country needs to ramp up its productive capacity to be able to compete in that market.
But the local poor production of major crops such as cocoa, groundnut and rubber and huge importation have exposed Nigeria to price fluctuations in the global commodity market, according to analysts at the PwC.
Nigeria recorded 11.89 per cent decrease in agricultural exports, from N97.3bn in the fourth quarter 2018 to N86.1bn in the first quarter of 2019, data from the National Bureau of Statistics, have showed.
Conversely, imported agricultural products increased by 7.98 per cent from what it was in the fourth quarter of 2018 and 28.1 per cent from the first quarter of 2018.
This declining trend of the agro sector was also seen in 2018 where the country recorded a drop from 3.45 per cent in 2017 to 2.12 per cent in 2018.
The Deputy Director General for Partnerships for Delivery at the International Institute for Tropical Agriculture, Kenton Dashiell, said Nigeria needed to raise its crop yield per hectare, noting that it was too low.
Stakeholders have also attributed the not-so-impressive performance of the sector to insecurity in the major food producing states of the nation.
“The insecurity has prevented wealthy farm owners from going to the farms for fear of being kidnapped,” the President, Lagos Chamber of Commerce and Industry, Babatunde Ruwase, said.
In addition to insecurity, there are other challenges such as poor access to finance, poor infrastructure and logistics, especially access to the nation’s seaports.
Agricultural products spend weeks and sometimes months before getting to the port because of the gridlock at Apapa port, according to exporters.
They said when the goods eventually got to their destination, they could be returned if found not be fresh.
Export is also said to be inhibited by the high cost of crops in the local market.
An expert in the export value chain and director at the African Centre for Supply Chain, Mr Obiora Madu, said, “The local commodity prices are higher than the prices of the crops at the international market.”
He added, “The environment is still not friendly. Access to finance is still a problem. The export stimulation fund that was unveiled by the Central Bank of Nigeria three years ago, no stakeholder has been able to access it. Logistics costs are still very high and there are challenges involving movement of goods from the ports. Transporting goods from China to Nigeria is faster than transporting goods within Nigeria.”