In the first quarter of 2024, food product imports accounted for approximately $689.88 million, or almost 17% of all foreign exchange (FX) expenditures on imports.
This is based on data on the sectoral use of foreign exchange that is included in the Central Bank of Nigeria’s (CBN) quarterly statistical bulletin.
Nigeria spent a little over $4 billion on imports during the time under review, according to the data.
What the data states
According to CBN data, the amount of foreign exchange (FX) spent on food imports increased by 40% between the final quarter of 2023 and the first quarter of 2024, from $493.24 million to $689.88 million.
The amount increased by 2% year over year from $677.61 million in the same quarter of the prior year.
The information also reveals that companies in the food product industry spent foreign exchange on imports at the second-highest rate.
Businesses in the industrial sector top the list, having spent the majority of $1.94 billion.
In Q1 2024, companies in the oil and gas industry spent $522.90 million on imports, compared to $594.63 million spent by manufacturing enterprises.
During the study period, the agricultural industry spent the least foreign exchange ($35.52 million) on imports
Imported food inflation increased by 25%.
Nigeria’s import food inflation increased by 25% in the first quarter of 2024, according to National Bureau of Statistics (NBS) data on the Consumer Price Index (CPI).
Nigeria’s inflation rate for imported food rose sharply from 26.29% in January 2024 to 32.89% in March of the same year.
According to a month-by-month analysis, January has a high import food index and a notable inflation rate of 26.29% at the beginning of the year, suggesting that the price of imported food is already high.
The inflation rate for imported food rose to 29.81% in February 2024, a significant increase of 3.52% points from January.
March’s imported food inflation rate increased by 3.08% points from February to 32.89%, indicating that the trend is still rising.
Additionally, general food inflation increased by 13% at that time, going from 35.41% in January 2024 to 40.01% in March of the same year
What to note
The Trade Union Congress (TUC) has requested the Federal Government to start the immediate importation of necessary food goods as a mitigating step in response to the growing pressure of rising food prices.
Minister of Information Mohammed Idris confirmed this opinion when he revealed that the government was considering importing food as a stopgap measure to address the skyrocketing costs of food supplies.
President Bola Tinubu, on the other hand, opposed the importation policy, highlighting the administration’s dedication to fostering domestic food production capabilities and arguing for Nigeria’s capacity to attain self-sufficiency.
In its analysis, the International Monetary Fund (IMF) identified an overreliance on imported goods as the primary cause of the severe food crisis that is currently plaguing Nigeria and other sub-Saharan countries.
The federal government has allowed a 150-day duty-free window to allow the importation of maize, husked brown rice, and wheat in an attempt to reduce the nation’s soaring food inflation.
The federal government’s intention to import food has drawn criticism from Dr. Akinwunmi Adesina, President of the African Development Bank (AfDB), who called the idea “depressing.” He asserts that Nigeria cannot depend on food imports to keep prices stable and that doing so would undermine the nation’s agriculture strategy.
Additionally, Kabir Ibrahim, National President of the All Farmers Association of Nigeria (AFAN), stated that the advances earned in local maize, rice, and wheat production will be eroded by duty-free food imports. He urged governments to make investments by giving subsidies for commodities like chemicals, machinery, and fertilizer so that the nation might have a sustainable food system.
In Q12024, N12.64 trillion worth of imports were made, according to an NBS report. This is an increase of 95.53% from N6.47 trillion in Q1 2023 and 39.65% from N9.05 trillion in Q4 2023.
With a share of 23.18% in total imports, China ranked as Nigeria’s main trading partner. India (8.46%), the US (7.98%), Belgium (7.56%), and the Netherlands (4.68%) were among the other major import partners.
Among the main imports were liquefied petroleum gases, durum wheat, motor spirit ordinary, petrol oil, and cane sugar intended for use in sugar refineries.
The NBS study also revealed that from N1.21 trillion in the fourth quarter of 2023 to N1.59 trillion in the first three months of 2024, Nigeria’s import bill for food and beverages climbed by 30%.
The imports of food and beverages increased by 115% in the first quarter of 2023 compared to the previous quarter.
The research states that between January and March 2024, imports of food and beverages made up around 12.59% of all imports, a slight rise from 11.4% in the same period in 2023.
