Agricultural Imports Consume N12 Trillion Notwithstanding 9-year CBN's Anchor Borrower Policy

IN nine years, Nigeria spent nearly N11.6 trillion on agricultural product imports while investing more than N1.1 trillion in the Central Bank of Nigeria's Anchor Borrowers Programme and other agricultural sector interventions.

According to a review of the National Bureau of Statistics' (NBS) Foreign Trade Statistics from 2016 to 2023, the breakdown revealed large statistics for agricultural imports.

The data showed that the biggest volume of agricultural imports occurred in 2021, totaling N2.4 trillion, followed by 2023 (N2.2 trillion) and 2022 (N1.8 trillion).

The principal products imported were durum wheat (non-seed) from the United States, Canada, Argentina, Lithuania, and Latvia. Furthermore, crude palm oil and palm olein were imported from China and Malaysia, respectively. Furthermore, herring (fish) were brought from the N

etherlands.

Nigeria exported agricultural products worth N3.4 trillion over a seven-year period, resulting in a N8.1 trillion trade deficit.

This substantial trade gap happened despite the distribution of N1.1 trillion in loans to farmers through the Anchor Borrowers scheme.

Former President Muhammadu Buhari inaugurated the Anchor Borrowers' Programme on November 17, 2015. It aimed to connect anchor firms, who played an important role in selecting major agricultural commodities, with smallholder farmers.

The Anchor Borrowers' Programme (ABP) aims to establish economic links between smallholder farmers and processors, with the primary goals of increasing agricultural output and maintaining food price stability.

The initiative targeted both smallholder farmers and medium to large-scale farmers who produce a variety of agricultural commodities around the country. Smallholder farmers were represented by groups, cooperatives, associations, or through out-grower arrangements.

The program covered cereals like rice, maize, and wheat, as well as cotton, roots and tubers including cassava, potatoes, yam, and ginger. The program also covered sugarcane and tree crops like oil palm, cocoa, and rubber.

Others included legumes (soybean, sesame seed, cowpea, etc.), tomatoes, animals (fish, poultry, ruminants, etc.), and any other commodity as determined by the Bank from time to time.

Years of controversy surrounded the programme, including procedures for selecting applicants and nonpayment of issued loans.

Approximately N1.12 trillion was disbursed to 563 anchor companies, yielding in approximately N670.4 billion in repayment, leaving an outstanding amount of N450.90 billion. The program has been canceled, and the central bank is actively working to recover the monies.

Notably, major beneficiaries included the Rice Farmers Association of Nigeria (N283 billion), AFEX Commodities (N169.27 billion), MAAN (N92.42 billion), Thrive Agric (N92.07 billion), and Nacotan (N57.87 billion).

In total, the initiative benefited roughly 4.67 million farmers active in maize, rice, or wheat growing.

Despite these huge investments, a large share of the agricultural products imported throughout the ABP's goal period were the same commodities for which the program planned to increase local production in order to meet domestic demand and enhance export capability.

A early examination of loan disbursements under the program found that the majority of beneficiaries were involved in wheat growing. However, despite these efforts, wheat imports into the country have increased, according to data from the National Bureau of Statistics.

It is worth mentioning that between 2015 and 2022, the Muhammadu Buhari administration budgeted N12.9 billion for wheat value chain training, promotion, and development, according to budget allocation statistics from the Federation's Budget Office.

According to a 2021 report on wheat production in Nigeria by the National Bureau of Statistics (NBS), which conducted a survey that covered the 2020/2021 farming season across 13 states, wheat production in Nigeria was 36,943.80 tonnes, a 23 percent decrease from 60,000 tonnes as captured in the Agriculture Promotion Policy's 2016 strategy document.

In 2016, wheat demand was predicted to be 4.7 million tonnes. However, seven years later, despite a notable increase in demand, production has declined.

Nigeria's wheat imports soared to N1.3 trillion in 2021, up 71% from N756.9 billion in 2020. Similarly, wheat imports in 2020 increased by 89.1 percent, from N400.3 billion in 2019. According to government figures, Nigeria's wheat imports totaled N375.1 billion in 2018, and N941.5 billion in 2022.

The ongoing increase in wheat imports has aroused worries among stakeholders. Musa Shehu, national head of Nigeria's Wheat Farmers Association, has urged the federal government to declare a wheat import emergency.

Shehu said: “The question about Nigeria's wheat importation is a political one - and an international issue. There's an agreement between Nigeria and some other international countries, especially the US, that if we are going to sell oil to them, they're going to sell wheat to us. I doubt that agreement has been reviewed.”

In 2023, Agriculture Minister Abubakar Kyari worried that wheat imports were depleting the country's foreign reserves.

Kyari stated that attempts were being made to halt wheat seed importation within the next four to five years, and that the Federal Government was providing a 50% subsidy to wheat farmers during the forthcoming dry season to assure significant grain output in the country.

He said, “We are fully committed towards massive wheat production in the upcoming dry seasons farming for local and foreign export actions.

“In the next four to five years, with the programmes set out, Nigeria will completely stop the importation of wheat seeds and be self-sufficient, which would enhance food production and security.”