…Growth forecast to settle at +2.16% y/y in 2024FY
WED, DEC 27 2023-theGBJournal|After the rebound from the negative growth induced by the Central Bank of Nigeria’s (CBN) naira redesign in Q2-23, the Agriculture sector’s growth slowed in Q3-23 as various challenges, including persistent insecurity in the food-producing belt of the country, higher input costs, and rainfall deficit, weakened the sector’s performance.
Parsing through the breakdown, the slow growth in the Crop production (+1.35% y/y vs Q2-23: +1.82% y/y) sub-sector and negative growth in the Fishing (-2.33% y/y vs Q2-23: +0.29% y/y) sub-sector contributed to the slow growth in the Agric sector.
Elsewhere, the Forestry (+2.21% y/y vs Q2-23: +1.88% y/y) and Livestock (+1.18% y/y vs Q2-23: -2.30% y/y) sub-sectors grew higher in the period. Consequently, the Agricultural sector grew at a slow pace by 1.30% y/y in Q3-23 (Q2-23: +1.50% y/y).
Coming from the very challenging year (2023FY) for the Agricultural sector, analysts at Cordros Securities tells theG&BJournal that they expect the industry to improve in 2024FY, primarily driven by the low base effect from the prior period induced by the CBN’s naira redesign drive amidst lingering productivity challenges.
Cordros believes that the sector’s growth will remain under pressure as the underlying challenges in the sector- the unsettling state of security in the northern region of the country, pests and diseases affecting crops and livestock, irregularities in climate conditions which leads to flood incidences in food-producing states, and higher input
costs – are still intact.
On the positive, we acknowledge that the federal government has declared a national food security emergency to ease the pressure on food prices by providing fertilisers and grains to farmers.
We also highlight other measures the government is taking to improve agriculture output in the country, such as improving the road infrastructure, addressing food wastage, and subsidizing farm inputs.
All told, Cordros forecast the Agriculture sector’s growth will settle at +2.16% y/y in 2024FY (2023FY: +0.96% y/y).
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