Nigeria’s agricultural sector grew by 1.30% in Q3 2023 in real terms compared to the 1.34% growth recorded in the corresponding period in 2022. On a quarter-on-quarter basis, the sector grew by 1.3% in Q3 2023 compared with a growth rate of 1.50% recorded in Q2 2023.
The data also revealed that the sector’s contribution to GDP shrunk in Q3 2023 to 29.31%, lower than its 29.67% contribution in the corresponding period of 2022. The agricultural sector comprises four sub-sectors: crop production, livestock, forestry, and fishing. Crop production remained the major driver of the sector, accounting for 92.24% of the overall value of the sector in the third quarter of 2023.
Nigeria’s agricultural sector growth has slowed again recently mostly due to lower production levels caused by increasing production expenses such as fuel prices and logistics, which have resulted in higher food prices. Nigeria’s agricultural sector has long been touted as the sector that can drive economic growth and development if adequately supported.
However, challenges such as the Ukraine invasion, floods, surge in input costs, and worsening insecurity continue to lower the output of farmers. These challenges have exacerbated food inflation. Food inflation rose to 31.52% y/y in October 2023 with significant price increases across items such as cereals, yam, meat, fish, and fruits, etc.
In our view, to enhance productivity in the agriculture sector, Nigeria must address the structural and institutional obstacles that have hampered the growth of the sector over the years, chief of which is insecurity. Other issues affecting the sector include inadequate infrastructure, limited access to finance and markets, low adoption of technology and innovation, inadequate extension services, climate change, and environmental degradation.
Insecurity has been the most serious of the sector’s problems and we believe a holistic approach is needed to tackle this menace. Till date, farmers, even those in the southern region complain of attacks on their farms by herdsmen. Many farmers have been hacked to death on their farms while trying to stop the herdsmen from destroying their crops, making others afraid to go to their farms. This has significantly reduced food production.
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