Story highlights
- In Q1 2024, Nigeria spent $689.88 million on food imports, representing 17% of total foreign exchange (FX) expenditure on imports and a 40% increase from the previous quarter.
- The Central Bank of Nigeria (CBN) data reveals that overall imports totalled over $4 billion, with the industrial sector leading in FX spending at $1.94 billion.
- Amid escalating food prices and a 25% rise in imported food inflation, government officials and organizations debate between immediate food importation and bolstering domestic production to achieve self-sufficiency.
The import of food products gulped about $689.88 million in the first quarter of 2024, which is about 17% of the total foreign exchange (FX) spending on imports.
This is according to the sectoral utilization of foreign exchange data contained in the quarterly statistical bulletin of the Central Bank of Nigeria (CBN).
Based on the data, Nigeria spent slightly over $4 billion on imports in the period under review.
What the data says
The CBN data shows that there was a 40% increase in the amount of FX spent on food import, from $493.24 million in the last quarter of 2023 to $689.88 million in the following quarter, which is Q1 2024.
Year-on-year, there was a slight increase of 2% from $677.61 million recorded in the same quarter of the previous year.
The data further shows that firms in the food product sector were the second-highest spenders of foreign exchange for imports.
Leading on the list are firms in the industrial sector, which spent the lion’s share of $1.94 billion.
While firms in the manufacturing sector spent $594.63 million, those in the oil and gas spent $522.90 million on imports in Q1 2024.
The agricultural sector spent the lowest FX for imports at $35.52 million in the period under review.
Imported food inflation rose by 25%
Within the first quarter of 2024, Nigeria’s imported food inflation rose by 25%, according to the Consumer Price Index (CPI) data by the National Bureau of Statistics (NBS).
Nigeria’s imported food inflation increased significantly from the 26.29% recorded in January 2024 to 32.89% in March of the same year.
A month-by-month analysis shows that January starts the year with a high imported food index and a significant inflation rate of 26.29%, indicating that the cost of imported food is already elevated.
In February 2024, the imported food inflation increased to 29.81%, marking a notable jump of 3.52%-points in the inflation rate from January.
The trend continues upward in March, with the imported food inflation rate climbing to 32.89%, an increase of 3.08%-points from February.
Also, within the same period, general food inflation rose by 13%, from 35.41% in January 2024 to 40.01% by March of the same year.
What you should know
In response to the mounting pressure of escalating food prices, the Trade Union Congress (TUC) recently urged the Federal Government to initiate the immediate importation of essential food items as a mitigative measure.
Corroborating this sentiment, Mohammed Idris, the Minister of Information, disclosed the government’s contemplation of food importation as a temporary remedy to alleviate the burgeoning prices of food commodities.
Contrarily, President Bola Tinubu took a stand against the importation strategy, advocating for Nigeria’s potential to achieve self-sufficiency and emphasizing the administration’s commitment to nurturing domestic food production capabilities.
The International Monetary Fund (IMF) also weighed in, pinpointing the acute food crisis in Nigeria and other sub-Saharan nations as a consequence of an excessive reliance on imported foods.
In an effort to curb rising food inflation in the country, the federal government recently approved a 150-day duty-free window to allow the importation of maize, husked brown rice and wheat.
However, the President of the African Development Bank (AfDB), Dr Akinwunmi Adesina, raised concerns over the federal government’s plan to import food, stating that the policy is depressing. According to him, Nigeria cannot rely on food imports to stabilize prices, and resorting to it could destroy the country’s agricultural policy.
Also, the National President of the All Farmers Association of Nigeria (AFAN), Kabir Ibrahim said that the duty-free importation for food items will lead to the erosion of gains made in local production of maize, rice and wheat. He called on governments to invest through the provision of subsidies on inputs such as machines, fertilizers and chemicals in order to have a sustainable food system in the country.
The total imports for Q1 2024 stood at N12.64 trillion, according to a report by the NBS. This reflects a 39.65% increase from N9.05 trillion in Q4 2023 and a 95.53% rise from N6.47 trillion in Q1 2023.
China was Nigeria’s top trading partner on the import side, contributing 23.18% to the total imports. Other significant import partners included India (8.46%), the United States (7.98%), Belgium (7.56%), and the Netherlands (4.68%).
Key imported commodities included motor spirit ordinary, gas oil, durum wheat, cane sugar meant for sugar refinery, and other liquefied petroleum gases.
The NBS report also showed that Nigeria’s food and beverage import bill increased by 30% from N1.21 trillion in the fourth quarter of 2023 to N1.59 trillion in the first three months of 2024.
When compared to the first quarter of 2023, there was a 115% increase in food and beverage imports.
According to the report, food and beverage imports constituted about 12.59% of total imports between January and March 2024, a marginal increase from 11.4% in the corresponding quarter of 2023.
