Report Raises Hope for Nigeria Exiting Recession

The Foundation for Partnership Initiatives in the Niger Delta (PIND) and Market Development in the Niger Delta (MADE) have identified strategic investments in agriculture as a veritable tool to
address the current economic challenges confronting Nigeria, create employment and boost industrialization.

This is contained in the report of a joint study conducted by the PIND and MADE.

In the report which was released on Thursday in Abuja, by the organisations, the development partners said deliberate strategies being employed by them and other critical stakeholders and the concomitant effects are a major signal that the country was neutralizing the harsh effects of the devaluation of the Naira.

The report said the devaluation of the Naira which was occasioned by the drop in crude oil price from above $100 per barrel in early 2014 to below $30 per barrel by the beginning of 2016 has been positive for most farmers and market actors, especially in the Niger Delta region where PIND and MADE are intervening.

“The devaluation has also led to significant increases in costs of major inputs over the last two years which influence costs across all the value chains, forcing farmers and processors to look in wards to make ends meet,” the report said.

In the Aquaculture value chain for instance, the report said, “Catfish prices have increased as consumers turn to it as an alternative to more expensive imported fish and poultry, meaning that the farmers who have stayed in business have seen their revenues increase”.

In the Cassava value chain, the study found that the increases in the prices that market actors in the Niger Delta receive for their products is higher than the increase in input prices, meaning that the Naira’s devaluation has been positive for most market actors.

The report explained that demand from the food sector has increased as the price of imported rice, a major substitute for cassava food products, more than doubled between 2015 and the beginning of 2017, and imports have dropped by about 2 million tons since the devaluation. Even with the increased industrial demand, the price for cassava on the food market is still higher than on the industrial market leading producers and processors to allocate even more cassava to producing cassava derivatives
for the food market.

Similarly, the study noted that the palm oil subsector has also seen increased demand for both Technical Palm oil (TPO) and Special Palm Oil (SPO) as imports of refined palm oil are banned while crude palm oil
imports are subject to combined import tariffs of 35%, and are invalid for official foreign exchange access.

“The increase in demand has led to increased prices for palm oil and the fresh palm fruit which has been higher than the increase in prices that producers and processors have faced when purchasing inputs,” the report observed.

The report said the adoption of mechanized and commercialized agriculture would maximize the nation’s agricultural potentials to earn foreign exchange from exports, produce raw materials for the industries and as well as create massive jobs for the teeming unemployed youths.

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