Latest GDP report from the National Bureau of Statistics once again shines the spotlight on the country’s floundering Agriculture sector. This time, a silver lining, though faint, has appeared in the horizon. Nigeria’s Agricultural sector recorded the highest growth across the major sectors for the first time in five (5) quarters.
By the numbers: According to the Bureau’s data, in the first quarter (Q1) 2019, the Agricultural sector grew at 3.17 percent in real term, up from 2.46 percent in the previous quarter. Similarly, comparing the three key sectors which include agriculture, industrial and service sectors, the agriculture sector grew the highest. This is the first time Agriculture has grown faster than the other two sectors in any quarter since, at least 2018.
The key growth driver: There are four sub-sectors that makeup activities in the agricultural sector and they include Crop Production, Livestock, Forestry, and Fishing. A cursory look at the GDP data shows that Crop Production remains the major driver of the sector, accounting for about 85 percent of sector GDP.
Not enough – The latest data must be encouraging for the current government considering the political capital that has been expended in growing the sector. Critics of the government will point to billions of naira spent on subsidies, direct loans to farmers as the opportunity cost of recording paltry single-digit growth. Add to the cost of bans on several imported items, particularly access to forex, then this growth numbers may not be as encouraging as expected.
The big picture: Despite all the billions spent, farmers still complain of low Agriculture yields, increase in smuggling and high transportation and distribution cost. Agricultural exports is still very poor at a paltry. Last year, Nigeria exported about N302.2 billion of Agriculture goods compared to N170.4 billion in 2017. However, Agricultural imports were N851.6 billion (2017 N886.7 billion), still over double exports.
The latest data might be encouraging for the government and its plethora of agriculture policies, but rather than get flattered by very modest growth, it probably a sign that the policies are not working as expected.