Investments into Nigeria’s agriculture sector took a nosedive in the second quarter of 2023, falling by a whopping 83% to $10 million. This is a significant drop from the $57.41 million recorded in the same period last year. The latest Capital Importation report from the National Bureau of Statistics (NBS) reveals that the agriculture sector only accounted for 0.97% of the $1.03 billion foreign direct investment into the country from April to June 2023. However, there was a glimmer of hope as investment into the sector saw a quarter-on-quarter increase of 107%, rising to $10 million in Q2 2023 from $4.84 million in Q1 2023. Unfortunately, the fishing subsector of the agricultural sector did not attract any investment during this period.
The decline in investment is not unique to the agriculture sector alone. Due to the economic downturn, investments into the Nigerian economy as a whole have been on a downward trend. In Q2 2023, investments into the Nigerian economy declined by 33% to $1.03 billion compared to $1.535 billion in Q2 2022, and by 9% compared to $1.132 billion in Q1 2023.
The NBS, in its Q2 GDP report, highlighted that both the agriculture and industry sectors contributed less to the aggregate GDP in Q2 2023 compared to the same period last year. This is a cause for concern as the agriculture sector has been facing numerous challenges. Farmers are finding it increasingly difficult to feel safe going to their farms, which has had a negative impact on food security and prices in Nigeria.
To address this issue, Abiodun Olorondenro, the operation manager at Aquashoots Limited, emphasized the need for the government to create a conducive environment and tackle the growing insecurity in order to attract more investments into the sector. Additionally, the agriculture sector is grappling with rising input costs, insecurity, and the effects of climate change, all of which are making it harder for farmers to turn a profit and discouraging future investments.
The prolonged cash shortage, resulting from the replacement of high-denomination currency, has also had a detrimental effect on the economy, particularly the informal sector. These challenges have likely contributed to the decline in investments in the agriculture sector.
In conclusion, the agriculture sector in Nigeria is facing significant challenges, leading to a decline in investments. The government must prioritize creating a safe and enabling environment for farmers and address the issues of insecurity and rising input costs. By doing so, they can attract more investments and ensure the sector’s growth and contribution to the country’s economy.