Dependence On Crude Oil Costs Nigeria N3 Trn Annually
So, one of the world’s top professional services firm, PwC has been releasing research reports on key sectors of Nigerian economy for the past week.
The reports have shown nothing less of a feeble and struggling economy.
In the report released on Friday, the company beamed their searchlight on the agriculture sector and the revelations are saddening, to say the least.
First, it showed the heavy reliance on crude oil made Nigeria’s agriculture related products being exported reduce by 41% to 143 billion Naira between 2011 and 2015.
These exports, which accounted for an estimated 20% of Nigeria's non-oil exports in 2015, were mainly leather and processed skin, alcoholic and non-alcoholic beverages, tobacco and cocoa derivatives.
And this is particularly bad for Nigeria because as the population expanded, the agricultural production is not meeting up with consumption.
The report noted that across most key crops, the rate of consumption has far outstripped production.
This deficit has been met largely by importation, making the country a net importer; a trend evident since 1975.
That is why you keep reading from NPA’s shipping position about ships lining up to discharge food items at Apapa port.
This has cost Nigeria huge sums. On the average, between 2011 and 2015, 1.4 trillion Naira has been spent on food imports with wheat, milk, rice, sugar and malt extract, constituting the bulk of the country's food import bill.
According to the report, “Nigeria, as a result of this, has become vulnerable to changes in the global agro-commodity prices, with significant impact on inflation and foreign reserves.”
But the implications are far wider. Nigeria’s finances are bleeding as a result of this negligence.