How Nigeria’s policy leanings impact agriculture

Nigeria's agricultural sector is facing a period of uncertainty as the Central Bank of Nigeria aims to curtail inflation and promote sustainable growth. President Mohammed Buhari recently instructed the Central Bank to halt foreign exchange issuance for food and fertilizer imports. The move has significant implications for the agriculture sector, which contributed 24.65% to the second-quarter GDP. Kola Masha, Managing Director of Babban Gona, shared insights on the implications of these policies on CNBC Africa. Masha highlighted the importance of government support in providing protection for the agriculture sector to boost productivity and competitiveness on a global scale. One of the key concerns raised by Masha is the need for farmers to have access to knowledge, credit, and high-quality inputs such as seeds and fertilizers. While the government has made efforts through initiatives like the Presidential Fertilizer Initiative to improve access to fertilizers, challenges remain in importing raw materials like phosphate and potash. Masha emphasized the critical role of these inputs in driving the sector's growth and productivity. The decision to halt foreign exchange for food imports is not new, as a similar policy was implemented in 2019. The government's focus on promoting self-sufficiency and reducing reliance on imports has been a consistent trend. Masha highlighted the progress made in achieving self-sufficiency in rice production and the renewed efforts in the wheat sector. The administration aims to empower Nigerian farmers to meet local demand and potentially become major exporters. With the Central Bank pledging to increase capital flows to the agriculture sector, there is optimism for growth and development. The bank's initiatives, such as the Anchor Borrowers' Program, have shown positive results in supporting smallholder farmers. However, Masha emphasized the importance of policy continuity and consistency to build confidence in the private sector and ensure sustainable progress. The agriculture sector in Nigeria plays a vital role in the country's economy and food security. As the government navigates policy changes to promote self-sufficiency and boost domestic production, stakeholders in the agriculture sector are closely monitoring the implications of these decisions. The success of these policies will hinge on the effective implementation of support measures for farmers and the availability of essential inputs to drive growth and productivity.