Nigerian consumers feeling the brunt of government policy to restrict food imports

Nigerian consumers feeling the brunt of government policy to restrict food imports

On the 14th of August 2019, Nigeria announced that there would be restrictions on food and agricultural imports in the country. President Buhari took to Twitter to explain his rationale behind this step (see here). In summary, President Buhari wants to improve Nigeria’s agricultural production. His theory is that “restricting food imports, in the face of solid domestic demand will be a catalyst for domestic production”.

This was a bold move considering Nigeria being a notable importer of agricultural and food products. Over the past five years, Nigeria’s agricultural and food imports averaged US$4.7 billion, as shown in Exhibit 1 below. The products on top of the imports list are wheat, sugar, milk, palm oil, sauces and seasonings, bottled water, apples, pears, maize and vegetables oil.

Exhibit 1: Nigeria’s agricultural trade
Source: ITC, Agbiz Research

There is a potential to reduce the imports of some of these products, but this won’t be an overnight event like the Nigerian government had hoped. This will take years of investment in agricultural production and value chain, something that seems to be lacking as far as I can tell.

So, introducing a ban on imports of food might have been an oversight, perhaps the Nigerian government should have introduced import quotas and adjusted them along with improvement in production (to be clear, this is not something I particularly desire, but it could have worked for achieving the government goal).

Nevertheless, the negative impacts of the drastic policy of restricting food imports have now come to light. Bloomberg, a news organization, reports that staple foods’ prices, such as Jollof rice, have increased by 70% since the introduction of this policy in August 2019. What’s more, Nigeria’s overall food price inflation accelerated to a 20-month high in December 2019, reaching 14.7% y/y.

Nigerian farmers might be happy with these measures and adjusting production somewhat – something that government aims for. But this is coming at a heavy cost to Nigerian consumers.


Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

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