Following the commencement of African Continental Free Trade Area (AfCFTA) agreement and reopening of the land borders, Nigeria’s hope of attaining a seamless trade facilitation in the continent could be dashed as resurgence of smuggling of agricultural products into the country is expected to gain momentum this year.
Also, there is high expectation that the commencement of AfCFTA could see Nigeria being a destination for imported food products in the absence of full scale border monitoring measures. Additionally, heightened security concerns, especially in the northern part of the country and resurgence in herderfarmer conflict in the Middle Belt, South West and South East, if unaddressed, would hamper local food production in the near term.
Director-General, Lagos Chamber of Commerce and Industry (LCCI), Dr. Muda Yusuf, stated these in an interview with New Telegraph while speaking on the growth outlook of Nigeria’s agric sector in the New Year.
Yusuf explained that the most challenging task expected to face the country’s agric sector in a bid to rallying food sustainability to boost domestic food production and minimise food supply gap in the New Year would be AfCFTA, insecurity and border reopening, which are expected to dominate Nigeria’s agric products in 2021 despite government’s ban.
According to him, government’s ban on importation of rice, poultry and other agricultural commodities still subsists amid border reopening, but this will lead to a renewed sophisticated smuggling of agric products into the country, except Nigeria Customs Service (NCS) and other government security agencies are properly equipped with modern gadgets to assist them in their monitoring activities.
Yusuf said: “Looking forward, we see the Central Bank of Nigeria sustaining its intervention in the agricultural sector in year 2021 in a bid to boost domestic food production and minimise food supply gap.
“While ban on importation of rice, poultry and other agricultural commodities still subsists amid border reopening, there is, however, the risk of resurgence of smuggling of agricultural products into the country considering the porous nature of Nigeria’s land borders. “This, combined with the commencement of AfCFTA, could see Nigeria being a destination for imported food products in the absence of adequate border monitoring measures.
“Additionally, heightened security concerns around the country, especially in northern part of the country and resurgence in herderfarmer conflict in the Middle Belt, South West and South East, if unaddressed, will hamper local food production in the near term.
“Nonetheless, we expect a modest growth performance in year 2021.” While reflecting on the out gone year (2020), the LCCI DG said: “Agricultural sector ironically demonstrated mild resilience with a positive growth of 1.39 per cent in Q3-2020 despite the adverse impact of COVID-19 disruptions, flooding, and insecurity on agricultural productivity.
“Agricultural productivity is usually robust in the third quarter being the harvest season, albeit output in year 2020 harvest season was muted as a result of Covid-19 disruptions, flooding, and security issues.
“Elsewhere, the CBN tightened its FX policies by restricting access to FX for food and fertilizer importation, as a way of encouraging domestic production of agro-commodities.” LCCI as part of its general projection for the year had through a survey revealed that 75 per cent of Nigerian businesses, mostly Micro, Small and Medium scale Enterprises (MSMEs), would not be able to service their loans to banks following disruptions from #EndSARS protests, second wave of COVID-19, as well as weak economic activities.
Consequently, there is high expectation that nonperforming loans (NPLs) would rise astronomically over payment default. In addition, the survey showed that 65 per cent of Nigerian businesses (MSMEs) were out of capital and now struggling to access credit from the apex bank’s N50 billion credit facilities slated for SMEs mostly affected by disruptions.
Likewise, the survey pointed out that 35 per cent of Nigerian businesses that have had opportunity to take loans from either the commercial banks or CBN intervention funds for their trade were currently facing challenges arising from effects of COVID-19 on the business environment, #EndSARS and other disruptions.
The survey, titled: “Impact of the #EndSARS Looting on Businesses in Nigeria,” indicated the pivotal role of credit in the growth process of Nigerian businesses, saying that this was, however, impaired by activities of #EndSARS protests, COVID- 19 lockdown and weak economic conditions and business activity disruptions.