Agriculture: The New Goldmine, Nigeria Beyond Oil

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“Diversifying the Nigerian economy is the pathway to achieving economic stability” – Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA)

“Nigeria must take decisive steps to plan beyond oil so as to reposition the nation’s economy for international competitiveness” – Gen. Yakubu Gowon

“No better time to diversify than now” – President Muhammadu Buhari

FACTS

NIGERIA-BRITAIN TRADE RELATIONSHIP
Nigeria’s Top 5 Trading Partners in 2017
UK ranked 4th in Nigeria’s leading suppliers (imports)

Imports by Country of Origin            Exports by Country of Destination
China 20.3 India 38.3
USA 8.3 US 10.2
Belgium 7.6 Spain 6.7
UK 4.4 France 6.5

 

Agriculture
Nigeria – Britain Trade Relationship

UK is Nigeria’s 4th largest import trading partner and 9th export trading partner.
Total value of imports from the UK – N96.6bn ($266.85mn) constituting about 4.11% of the total import trade.
Total value of exports to the UK – N108.7bn ($300.28mn) constituting about 3% of the total exports.
Crude oil accounted for 99% while non-crude oil accounted for only 1%.
Cocoa butter, fat and oil exported to the UK worth N190.79m ($530,000) in Q3’17.

Nigeria-UK Bilateral Trade

The Nigeria – UK bilateral trade was signed in December 1990
Trade volume between Nigeria & U.K was about £8bn in Feb 2016 and projected to exceed £20bn in 2020
Nigeria receives £400m per annum in UK aid annually
Nigerians in Diaspora remitted $19bn in 2016
UK accounted for 41.89% of the total capital inflows into Nigeria in Q3’17 – ($1736.58m)
Humanitarian aid for the 4 year period is projected at (2018 – 2022) amounts to £200bn a 50% reduction from the £100bn given in 2017.

NIGERIAN ECONOMY
Current State Assessment
Nigerian Economy – Embattled but Recovering

2018: A pre-election year, Economy is performing sub-optimally. Real GDP growth rate of 0.83% lags growth in potential GDP of 1.9%. Commodity dependent economy – relies heavily on oil & gas, Oil contributes approximately 83% of export earnings, Gas contributes 9.6%.
Agriculture remains the largest contributor to GDP at 25.08%. Also the largest employer of labour – employs above 40% of labour force. Structure of the economy is tilted towards services than production- 53:47.

Nigerian Economy – Policies Ahead of Economics

Still a highly import dependent economy – Marginal propensity to import: 0.68
Major import commodities: machinery & transport equipment, manufactured goods and chemicals. Unemployment+ Underemployment at 40% (Q3’17), Misery index currently at 55.13.
Increasing due to rising unemployment, No minimum wage adjustment since 2011 despite currency devaluation. One of the lowest minimum wage level at N18,000 ($1.25 per hour).
Leading commodities: cocoa, tubers, rubber, cashew, soya beans.

Download the below link for the comprehensive report on Nigerian Agriculture by Bismarck Rewane:

AGRICULTURE THE NEW GOLDMINE, NIGERIA BEYOND OIL


 

By Bismarck Rewane
Financial Derivatives Company Ltd