Miller Magazine Issue: 140 August 2021

78 Country Profile MILLER / august 2021 2021 was ushered in with the second wave of COVID-19, implementation of the African Continental Free Trade Area (AfCFTA), a rise in oil prices, an upsurge in insecurity (terrorism, kidnapping, and banditry) and an increase in clashes between herdsmen and farmers. The pandemic worsened inflation, which has been over ten percent since 2016. Given the low-growth and high-in- flation backdrop, the Central Bank of Nigeria (CBN) is im- plementing a policy to reverse galloping food inflation by purchasing grains produced by farmers financed under the 2020 wet season Anchor Borrowers Program (ABP). Currently, the CBN is sitting on thousands of metric tons of grains in strategic grain silos and warehouses. The CBN is also trying to resuscitate the moribund Nigeria Commodity Exchange (NCX) to facilitate price stability for grains. Nigeria's agricultural sector is not well organized and developed. Over the decades, the Government of Nige- ria’s policies and measures including the current Agricul- tural Transformation Agenda (ATA) and Agricultural Pro- motion Policy (APP), the Anchor Borrower Scheme; etc. remains unsuccessful for improving and protecting do- mestic agriculture and food processing. The government also adopted various types of trade protectionist mea- sures including hindering importers of many food and agricultural commodities access to foreign exchange despite membership of pro-free-trade bodies. Land bor- ders with neighboring countries, which are major sourc- es of food supply to Nigeria through gray channels, were closed in August 2019 to prevent the entry of food and agricultural products were re-opened in the middle of December 2020. Nigeria relies on imports to meet its food and agricul- tural product needs (mostly wheat, rice, poultry, fish, food services, consumer-oriented foods, etc.) worth about $10 billion. This makes trade in food and agricultural prod- ucts an important component in achieving the country’s food security needs. Europe, Asia, USA, South Amer- ica, and South Africa are the major competitors. How- ever, low oil prices and the continuing consequences of the COVID-19 lockdown restrictions have continued to increase Nigeria’s government debt. Currently, the economy is in a recession. To survive the recession, the government continues to borrow more as the economy struggles. This situation is unlikely to change in the short to medium term. Major grain staples in Nigeria comprise maize, wheat, sorghum and rice. Grain farming is predominantly un- dertaken by smallholder farmers who face challenges regarding access to funds and the availability of quality inputs to improve yield. The country primarily exports co- coa beans, feeds and fodders, cashew/tree nuts, spices as well as seafood products to the world. Nigeria’s agricultural policy prioritizes domestic food and agricultural production through protective trade pol- icies amid low productivity. In September 2020, Presi- dent Buhari called for a ban on dollars for food imports and added fertilizers to the restricted items list. Current- ly, this action is forcing wheat and soybean importers to source dollars at higher rates through the parallel mar- kets. The high foreign exchange rates are increasing the cost of flour and leading to rising prices and declining consumption of bread and other wheat flour-based prod- ucts during the out-year.