Nigeria Agribusiness Report Q1 2013Published by: Business Monitor International Published: Dec. 5, 2012 - 79 Pages Table of Contents
AbstractThe 2012/13 cocoa harvest has suffered a serious setback as bad weather in September and October 2012delayed harvesting of the main crop while also increasing the likelihood of a repeat of the outbreaks ofblack pod disease and mould that damaged the previous year’s harvest. Nevertheless, we still expect aslight increase in output for the 2012/13 season. Heavy autumn rainfall in October led to serious floodingin parts of the country, although the impact on the field crops covered in our report remains uncertain.Sugar production growth to 2016/17: 61.7% to 105,100 tonnes. Increased private sectorinvestment as well as increasingly punitive tariffs on imports will provide the fundamentals forthe pace of recovery in the sector to pick up. Cocoa production growth to 2016/17: 57.6% to 331,000 tonnes. Increased investment and thedistribution of more resilient hybrid pods will spur the sector’s revival. Wheat consumption growth to 2016/17: -10.3% to 3.2mn tonnes. Tariff hikes imposed by thegovernment have already reduced imports from the US by 20%, and there is little prospect ofdemand recovering as long as this policy remains in place. Real GDP growth 2013: 7.1% year-on-year (y-o-y), up from 6.8% in 2012. Unemployment rate 2013: 23.6% (down from 24.4% in 2012) Inflation (annual average, % chg y-o-y) 2013: 10.3% (up from 12.1% in 2012) Industry Outlook The government has further developed its programmes to boost domestic production of commodities thatare costly in foreign exchange. We have doubts regarding the wisdom of increasing tariffs on imports ofwheat and rice at a time when food prices may well come under pressure from tightening global supplieson the back of drought in the US, since public disorder and increased smuggling are likely to be shortterm consequences of these policies. We would also question the workability of the policy to force flourmills to include increasing percentages of cassava flour within a very brief time period to meet a target of40% inclusion by 2015. There are signs that governments at local and national levels have stepped up efforts to link protectionistpolicies with genuine efforts to provide assistance to producers. In particular, tax breaks and waivers ofduty on machinery are likely to help sugar to continue its recovery and begin to make inroads into thecountry’s overwhelming dependence on imports. Rice has also begun to receive more attention as a sectorwith the securing of a soft loan of US$105.2mn from the International Fund for AgriculturalDevelopment. Over the course of 2013 we will begin to receive a clearer picture of the government’slevel of resilience in maintaining politically unpopular tariffs and its willingness to follow through ongood intentions and eye-catching initiatives with coherent and sustained support. Get full details about this report >> |
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