In the first quarter of 2024, Nigeria witnessed a significant increase in food imports, with the Central Bank of Nigeria (CBN) releasing $689.88 million (equivalent to N903.95 billion at the official exchange rate of N1,309/$ as of March 31, 2024) for this purpose. This surge in food imports highlights the country’s growing dependence on foreign food sources and raises concerns about its agricultural sector’s capacity to meet domestic demand.
Key Points:
- Food Import Increase: The value of food imported into Nigeria rose by 16.37% within the first six months of 2024.
- Inflation Trends:
- Imported food inflation jumped to 36.38% in June 2024, up from 34.83% in May.
- The average price index for imported food increased from 692.6 points in January to 806.0 points in June 2024.
- Currency Devaluation Impact: The naira’s weakening following the unification of forex exchange markets in June 2023 contributed to rising import costs.
- Government Response: A 150-day duty-free window was approved for importing maize, husked brown rice, and wheat to combat inflation.
- Expert Concerns:
- Dr. Akinwumi Adesina, President of the African Development Bank, warned that relying on food imports could undermine Nigeria’s agricultural policy.
- Kabir Ibrahim, the National President of the All Farmers Association of Nigeria, cautioned about the potential erosion of gains in local production.
- Overall Inflation: Nigeria’s headline inflation rate rose to 34.19% in June 2024, up from 33.95% in May.
- Quarterly Trends: Despite being considered Africa’s food basket, Nigeria’s food import bills increased by 1.77% year-on-year in Q1 2024.
Analysis:
The surge in food imports and rising inflation present significant challenges for Nigeria’s economy and food security. While the government’s short-term measures aim to stabilise prices, experts argue for long-term solutions focused on boosting domestic agricultural production.
To address these issues sustainably, policymakers should consider:
- Investing in agricultural infrastructure and technology
- Providing subsidies on agricultural inputs
- Implementing policies to support local farmers and agribusinesses
- Developing more efficient supply chains to reduce food waste and improve distribution
As Nigeria navigates these complex economic challenges, balancing short-term price stabilisation with long-term agricultural development will be crucial for ensuring food security and economic stability.