Miller Magazine Issue: 156 December 2022

88 COUNTRY PROFILE MILLER / DECEMBER 2022 Nigeria has the most substantial arable land in Africa yet re- lies on imports to meet its food and agricultural needs (primarily wheat, rice, poultry, fish, food services, consumer-oriented foods, etc.) - worth about $10 billion annually. Europe, Asia, the United States, South America, and South Africa are significant sources of agricultural imports. The National Bureau of Statistics (NBS) reports that price vol- atility has continued since the beginning of the year. Increases in the prices of bread and cereals, food products, potatoes, yam and other tubers, meat, fish, oil, and fat caused a rise in food inflation. The escalated inflation rate is also due to increased en- ergy prices – higher prices for gasoline and diesel lead to higher transportation costs. Currently, there is a general surge in insecurity as Nigeria pre- pares for the upcoming 2023 general election. Kidnapping for ransom and bandit attacks continue throughout the Northwest, disrupting the agricultural season. However, the Northeast Gov- ernors’ Forum (NEGE) underscores that normalcy is returning to the Northeast region, which is the epicenter of the Boko Haram insurgency. The government’s counter-insurgency operations have reduced the insecurity perpetuated by armed extremist groups. On the other hand, the prolonged armed conflicts and instability have negatively impacted access to farms and disrupt- ed agricultural production. This year, rainfall at the start of the rainy season was normal, which resulted in favorable crop conditions. However, excessive floods in parts of the Northwest, Northcentral, and Abuja affected upland rice production significantly. WHEAT PRODUCTION Wheat is the third most consumed grain in Nigeria after corn and rice. The country’s population growth is driving wheat con- sumption. Nigeria is a net importer of wheat. It only managed to produce just about two percent of all the wheat it consumed. The country imposes a 5 percent tariff on wheat imports, plus an additional 15 percent levy (earmarked for the national wheat development program) for a total 20 percent duty. Despite the preferences of Nigerian millers for imported wheat, there is a constant government focus on reducing wheat imports by 50 percent. Notably, the Ministry of Agriculture and the central bank have underscored their commitments to reduce wheat imports, enhance food security, and conserve foreign exchange. The central bank is working closely with flour millers on backward integration projects to enhance wheat self-sufficiency. The United States Department of Agriculture (USDA) estimates wheat production to be 110,000 metric tons for MY2022/23. The yield remains flat at 1.1 metric tons per ha. Nigerian farmers and policymakers face severe challenges to increasing production and area under cultivation. Government policies and programs to boost production are ineffective. The programs failed to reach their targets due to a lack of funding for regular seed production and multiplication, insurgency in the wheat growing areas, lack of input supply to farmers, and limited area under cultivation. USDA forecasts wheat consumption at 5.8 million metric tons for MY2022/23. The Russia-Ukraine war situation and the COVID-19 pandemic have exposed Nigeria’s vulnerable food system. Before the war, the country imported significant wheat from Russia and other Black Sea countries. Bread is a staple for millions of Nigerians. However, millers are currently facing severe business challenges amid the increasing cost of freight and energy. Wheat-based product consumption is related to the econ- omy’s performance and the purchasing power of consumers – both are under increased inflationary pressures. Rises in the price of bread and other wheat-based products have made consumers increase demand for substitutes/other staple foods like maize, yam, and sweet potato products that are relatively affordable. USDA estimates 2022/23 season wheat imports at 6 million metric tons, 3 percent decrease compared to the last season. Ukraine- Russia war contributed to the decline in wheat imports. In 2021, Nigeria imported 51 percent of wheat demand from Rus- sia, Lithuania, Latvia, and other Baltic countries.