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PwC Identifies Poor Infrastructure as Major Barrier to Agricultural Trade in Nigeria

Poor infrastructure has been identified as one of the major barriers to agricultural trade within and outside Nigeria.

An Associate Director at PricewaterhouseCoopers Nigeria, Taiwo Oyaniran, while speaking at an AfCFTA workshop organised by the National Action Committee on African Continental Free Trade Area Agreement stated that Nigeria had significantly poor transport infrastructure and services, particularly in the rural areas.

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According to him, the lack of cold chain logistics also contributes to a decreased trade capacity through losses from spoilage and impact on time to reach the market.

He noted that Information and Communications Technology and e-commerce infrastructure play a critical role in the availability of market information and rapidity of reaction.

Oyaniran said despite recent improvements in the state and quality of digital and telecommunications technologies, ICT infrastructure in Nigeria still required significant improvement to enable trade efficiency.

He identified bottlenecks at the seaports as one of the factors affecting cross-border trade.

He said, “Nigeria’s six seaports are limited by capacity constraints and aging infrastructure.

“In addition to this, customs and border administration processes are relatively inefficient, with multiple bottlenecks.

“These negatively impact the cost, and the ease and efficiency of cross-border trade.”

Highlighting the state of agriculture and agribusiness in Nigeria, he noted that Africa’s food import bill stood at about $35bn in 2016 and it is expected to rise to $110bn by 2025.

In addition, Oyaniran explained that Africa’s agribusiness sector was projected to reach $1tn in 2025, driven by the continent’s rapidly growing middle class.

According to him, weak inter-regional integrations and poor output growth have dampened the prospect of intra-Africa trade, which stood at 16.6 per cent in 2017 relative to peers such as Europe (68 per cent) and Asia (59 per cent).

“Africa’s agricultural sector is bedevilled with a weak value chain. For instance, out of the $62bn in agricultural products exported by Africa in 2017, only $12bn were classified as processed goods,” Oyaniran added.

Despite all these challenges, he said some government policies had been introduced by the government to encourage cross-border agric trade.

According to him, agriculture promotion Policy was introduced by the government to improve access to international markets by enhancing access to market information through a National Agricultural Information System.

Oyaniran said the policy aimed to create specialised export market support teams to enhance export capacity.

He added that economic and export promotion incentives such as trade barriers on select agric goods would protect local producers and stimulate the growth of the industry.

In addition, the PwC director said several economic incentives were being offered to agric investors in Nigeria, including income tax relief, zero import duty on equipment and VAT exemptions, among others.

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