The fragility of the reserves being used to support the naira and it's revalued rate shows that Nigeria needs to find new ways of earning foreign currency. In the first story of our series on the impact of COVID-19 on Nigeria, we look how its economy considers strategies to reduce the naira’s dependence on volatile oil prices.
Nigeria VS Coronavirus: Improved infrastructure a necessity for farmers
In the sixth story of our series on the impact of COVID-19 on the Nigerian economy, we look how the pandemic has affected agriculture.
This is part 6 of a series.
At the Oke-aro pig farm just a few kilometers away from Lagos, Oladimeji Adeniyi stands just a few meters away from his pig farm which is now decimated by African swine flu. At the farm, the first few pigs began showing symptoms of the swine flu just as fears of the coronavirus were rising up.
Coronavirus hits farmers hard
“I had a buyer for my pigs a few days after the lockdown, but the police did not allow the trucks to travel outside the state. But the government had said that essential services were exempted. The pigs finally came back to the farm and eventually caught the disease. All of them died.” Adeniyi tells The Africa Report.
What was intended to just be a few pigs the farmers thought they could isolate, has now turned into the entire farm being decimated. Dead pregnant sows litter the ground and other farmers with live pigs await the inevitable.
“Some of us had buyers and safe pigs but the police not allowing them move in the name of lockdown has spoiled our business.” Adeniyi explains.
The declining value of the naira, the inability to move produce, and challenging work conditions for farmers are compounded by Nigeria’s larger problems of economic instability and insecurity resulting in a lot of farmers leaving the agricultural sector.
Agriculture already hit pre COVID-19
There has been a renaissance of some sorts in Nigeria. After facing frequent shocks to the global pricing of oil it has adopted a more agriculture friendly outlook to deal with the deeper revenue problem.
More recently, the government closed down its land borders particularly with Benin Republic in a way to boost local production of food and reduce dependence on foreign food products.
But that has brought on its own problems. The country has since experienced food inflation rates which stood at 15.3% as of April of 2020. Experts warned that the country did not have the capacity to fulfill local demand by itself. Nigerians have had to endure rising food prices and the government has seen an increase in food smuggling.
Domino effect of the pandemic
In an attempt to stem the spread of the coronavirus that has since infected 24,567 people and killed over 500 in the country, the Nigerian government announced a lockdown. Primarily aimed to stop the movement of people in Abuja, Lagos and neighbouring Ogun state, other state governments also issued their own lockdown.
But as the number of people out on the street came to a near halt, the price of food soared, creating a difficult situation for many Nigerians.
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For many people, the price of food unfairly jumped by 50% from their pre-COVID value. The effectiveness of the lockdown has particularly been called into question because Nigeria’s informal sector was hit hardest during the lockdown and Nigerians complained that farmers were looking to make undue advantage of an unfortunate situation.
But Adeniyi disagrees.
To comply with the lockdown order, commercial transportation in Nigeria was also shut down. Roadblocks littered the streets and overzealous security operatives made the movement of food and agricultural produce difficult.
“The government said that food providers would be exempted from the lockdown, but the police on the road said otherwise. We could have paid them off to allow us pass, but that would eat into our profits,” says Adeniyi.
Farmers speak up
Farmers inside and outside Lagos have been quick to stress that the problems come mostly from the demand side and not from their end. For people living particularly close to farms, the price of food has gone down because farmers are looking to avoid wastage.
“The ban of transportation has affected the poultry industry probably the most. We have more than enough to supply, but we have no demand. Now, we are having to throw away some of our produce.” Mayowa Oyinkanola, the director of QMFarms in Ogbomosho tells The Africa Report.
Coronavirus has had longer lasting effects on the economy. Because the government closed up the Nigeria-Benin Republic border, agriculture was seen as a new area of investment in the country. Several agri-tech companies had partnered with digital finance companies to expand the investment.
“Moving to social media to find buyers”
But Oyinkanola explains that a lot of those investments might be lost. “With the restrictions on transportation, there has been a problem with linking farmers and markets. Farmers have been moving to social media to find buyers. Production is centered mostly in the South West, but it is a problem getting produce of sometimes 3000 crates of eggs per day to other sections of Nigeria.”
“There is a downward spiral that the government will need to plug quickly. The economy slowed down with a lot of people losing their jobs and in turn their purchasing power. Farming investments have been lost and there is a problem with where the funding for the next season will come from. If farmers are unable to plant, there will be a famine in the country. These problems are intertwined,” says Oluwatosin Ajani, a Lagos-based economist.
Oyinkanola agrees: “The food on Nigerian tables are there because they were planted. Low income farmers that planted with their savings are unable to plant for the next season and the price of food will definitely go up.”
“This current crisis in our food industry will last until the middle of next year if we are optimistic,” adds Emmanuel Maduka, the co-founder of an Akure-based food processing company.
“When the border was closed, it was supposed to end importation, but we have still imported over 900 billion naira worth of food produce since September 2019,” explains Maduka. To him, the government is not proactive with its agricultural policies. Several programmes to provide loans to farmers are riddled with claims of nepotism, others are mere announcements by the government without any significant investment.
Beyond loans and onto infrastructure
Just like Maduka, Oyinkanola believes that the government is not doing enough to support the agricultural sector. “The government needs to move beyond providing loans to building infrastructure that protects farmers and improves research to make the processes easier and reduce the barrier to entry. All we have are statements and policy ideas that look nice but will never be implemented,” adds Oyinkanola.
For Adeniyi, there is an uncertainty to his return as a pig farmer. With losses estimated around 25 billion naira and over 145,000 pigs in just the Oke-aro farm, there is still no end in sight. Experts say that the farm will need to be shut down for at least six months to prevent any recurrence of infections.
“I’m a little lucky, I still have savings and will look for another business. But, what happens to the other people that collected loans?” he asks.
For part 1, click here.
For part 2, click here.
For part 3, click here.
For part 4, click here.
For part 5, click here.