April 14, (THEWILL)- Notwithstanding the huge opportunity provided by the massive devaluation of the naira, Nigeria’s import of agricultural goods have continued to rise against the value exported.
Economic experts identify increase in export of locally produced commodities as a major benefit of devaluation of a country’s domestic currency as it will lead to higher earnings.
However, the case has been different in Nigeria since the devaluation of the naira by over 200 percent against the dollar in June 2023.
According to the National Bureau of Statistics (NBS) in its ‘Foreign Trade in Goods Statistics’ report for Q4, 2023, Nigeria imported agricultural products worth N711.14 billion against N463.97 billion it exported during the period.
This constituted a balance of trade deficit of N247.17 billion or 53.27 percent of this segment of the foreign trade in goods statistics for the period.
The report showed that the N711.14 billion agricultural goods imported during the period represents a 10.48 percent and 59.97 percent when compared with the values recorded in Q3 of 2023 (N643.68 billion), and the corresponding quarter of 2022 (N444.82 billion) respectively.
However, the N463.97 billion agricultural goods exported in Q4 2023, showed an increase of 110.91 percent over the N219.99 billion recorded in the preceding quarter of the same year.
It also showed a rise of 171.97 percent when compared with the N170.59 billion achieved in the corresponding quarter of the previous year.
According to NBS, during this quarter, most agricultural products were exported to Asia, valued at N270.65 billion, followed by Europe with N164.23 billion.
Export of agricultural products was dominated by ‘Sesamum seeds’ valued at N124.49 billion followed by ‘Superior quality Cocoa beans,’ with N100.66 billion and ‘Soya beans (excluding seeds)’ with N67.31 billion. Analysis by direction of trade reveals that ‘Sesamum seeds’ worth N45.04 billion and N29.18
billion were exported to China and India, respectively. Furthermore, ‘Superior quality Cocoa beans,’ worth N60.58 billion and N22.69 billion were exported to the Netherlands and Malaysia respectively, followed by exports of ‘Soya beans (excluding seeds)’ worth N35.80 billion and N24.61 billion to India and Pakistan, respectively.
On the other hand, the major agricultural goods imported in Q4, 2023 included ‘Durum wheat (not in seeds)’ from Latvia with N111.72 billion and Poland with N74.67 billion. This was followed by ‘Malt Not roasted.’ from Belgium and The Netherlands valued at N15.26 billion and N12.15 respectively.
Reacting to the report, a Finance expert, Kalu Aja, expressed disappointment over the dominant role of oil and gas in Nigeria’s foreign exchange earnings despite the trite called diversification. He suggested a strategic implementation of a robust and realistic plan for the development of the agricultural sector.
“I looked up the trade numbers for Nigeria to understand where the forex needed to strengthen the naira would come from. I was not impressed.
“Oil exports alone account for 81% of total exports. Put it this way: If you doubled Agricultural exports ten times, you would not get half of what Nigeria gets from crude oil and gas exports.
“So, in the short term, we must stop the distracting talk of “let’s diversify exports,” etc.; that’s a long-term goal. Today’s goal must be to grow oil exports to generate FX for the economy.
“Solid Minerals exports are “audio”; I won’t waste time discussing them. The folks illegally mining gold and other precious minerals and exporting know what they are doing. Suffice it to say it is criminal negligence for a nation with lithium, uranium, gold, silver, etc. deposits to deliver N35b a quarter on solid minerals exports,” he said.
Aja, who wrote on his X handle said, “Folks, we have been playing since 1970 with ‘agriculture.’ Nigerians have confused what we see villagers do with hoes and cutlass. Apologies to the hardworking farmers, but Nigeria needs to develop a cash crop export infrastructure. It’s surprising that the entire agriculture value chain in Nigeria delivers only N125b a quarter from the top earner in that quarter.
“Thus, Nigeria has to get serious about diversifying its earning base. Nigeria carries a vast and critical risk in that it depends heavily on crude oil and gas to earn dollars. Nigeria is potentially one global crisis or recession away from being bankrupt if she does not diversify away from a single main FX earning base.”
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.
