Hi farmily,

2022 was a particularly turbulent year for the Nigerian agriculture sector, and this led to unfavourable outcomes like the recent hike in food prices.

But why should this be a cause for concern and what role does foreign exchange play in all this?

First off, Nigeria relies on imported food products, and this list ranges from fertilizers, pesticides and machinery like tractors to staple foods like wheat used to make bread, pasta, noodles, and cereal. However, based on this reliance, when prices rise in the global market, national inflation is also bound to happen. 

Secondly, Nigeria is a net importer, and sadly, we currently spend more on imports than we derive from it. This means that as a country, we constantly put ourselves in a position to be open to shortage in foreign reserves aka dollar shortage; and subsequently, the naira’s continual loss of value.

In addition, the naira-dollar spiral is a causative factor. The lower the value of the naira, the more a food importer spends. Therefore, the volume of food products are reduced to match the budget available, in turn creating a demand gap, or the price rises to match the increased cost.

Ultimately, the consumer bears the brunt! 😩😩

What can be done?

The short version? Reduce or eliminate the need for foreign exchange in Nigeria’s food supply by finding both policy and technological solutions to increase domestic production for both large and small-scale farmers. 

This is the one of the reasons why ThriveAgric is farmer obsessed and has recently launched its own marketplace and locally made maize fertilizer blend, in collaboration with OCP Africa.

We can continue but it's best if you read our latest topical article which gives more details and further proffers solutions to encouraging more local production in Nigeria.