Foreign investment in Nigeria’s agricultural sector fell to $59.17 million in the first six months of 2022, the lowest in five years, as insecurity remains a major concern for local players and foreigners seeking in the country.
Data from the National Bureau of Statistics shows that $59.17 million of capital was imported into the agricultural sector in the half of 2022, down 74.9% from $235.87 million in the same period. of 2018.
In the first three months of 2022, foreign investment in the country’s agricultural sector amounted to $1.76 million, down 98.7% from $130.90 million during the same period of 2018.
“In Nigeria, we have security issues,” said Ibrahim Kabiru, national chairman of the All Farmers Association of Nigeria.
“All the investment parameters are clear; you go to a country to invest because it is lucrative to invest there and you will make money with your investments. But Nigeria has quickly become a country where there is no security in terms of investment. Even your staff are not safe,” he added.
Insecurity issues have been a significant setback for agriculture, although industry players say it remains the non-oil sector with the highest potential for foreign exchange earnings (and investment) in Nigeria.
Nigeria is currently grappling with security challenges including farmer-herder clashes, cattle rustling, banditry, kidnappings and the Boko Haram insurgency.
In the north, where most of Nigeria’s cereals such as cowpeas, sorghum, millet, soybeans and sesame are grown, many farmers have been displaced. The rate and pace of terrorist activities in the country has been making global headlines lately as it is one of the worst times in terms of banditry attacks on farmers in Nigeria.
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“It is only natural that foreign investors will slow down their investment in this sector, as the news circulating about the plight of farmers and their agricultural products in recent months has been materially negative,” said Tajudeen Ibrahim, director of research and of strategy, Chapel. Denham Hill.
“There is no way to generate returns when there is insecurity around your investments,” he added.
Other key industry players who spoke to BusinessDay are of the view that since agricultural investors mainly invest in the processing of agricultural products/raw materials available in the country, rising operational costs also pose a challenge.
“Besides the threat of banditry and insecurity in the country, the cost of running factories is also a factor. Diesel prices have risen so much that investors are discouraged if they don’t break even,” said Victor Olowe, professor and agronomist at the Institute of Food Security, Environmental Resources and Agricultural Research. .
Many of the issues that culminate in investor fear are also fundamental. “Investors don’t like such uncertainties,” said Edobong Akpabio, chairman of the agriculture and related business sector group at the Lagos Chamber of Commerce and Industry.
“Insecurity is the most important factor. Other factors may include the high exchange rate, high cost of inputs and declining purchasing power,” Akpabio added.
Industry experts say that when the issue of insecurity is resolved and the fears of foreign investors are allayed, they will bring funds into the country to support the agricultural sector.