Wheat imports cost Nigeria $3.3bn as self-sufficiency challenges linger
October 7, 2024326 views0 comments
Onome Amuge
Nigeria’s wheat consumption, production, and importation represent a dynamic narrative, one that reflects the interplay of various social, economic, and political forces that influence a nation’s culinary landscape.
With its rapidly growing population and a burgeoning appetite for foreign-inspired foods, Nigeria finds itself increasingly dependent on imported wheat, spending an estimated $3.3 billion annually to satisfy the country’s insatiable demand for this staple grain.
From 2000, when Nigeria consumed about two million metric tonnes of wheat, the country’s appetite for wheat has grown steadily over the years, reaching over six million metric tonnes (MMT) in 2023, according to the United States Foreign Agricultural Services, a three-fold increase that reflects the intricate interplay of forces that drive the country’s dietary preferences.
While wheat may not be the most extensively cultivated crop in Nigeria, it certainly holds its own as the third most consumed grain in the country, trailing only behind rice and corn.
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With roughly 13 states in Northern Nigeria serving as major wheat cultivation hubs, the crop is considered a vital element of the country’s agricultural sector.
Notably, Kano and Jigawa states are the preeminent wheat-producing regions in Nigeria, not only boasting the largest wheat-cultivated land areas but also the highest-quality wheat varieties in the nation.
Despite consequent efforts made in boosting local wheat production, Nigeria’s reliance on wheat imports continues to pose a significant challenge in the country’s food industry, reflecting the disparity between the local wheat production of 420,000 metric tonnes and the country’s annual wheat consumption, estimated at about six million tonnes.
Business a.m. gathered that nearly 90 percent of the wheat imported into the country is converted into wheat flour, which serves as a fundamental ingredient in the production of staple foods such as bread, pasta, and noodles. The ongoing popularity of these foreign-inspired dishes has only intensified Nigeria’s reliance on wheat imports, posing a pressing challenge for the country’s self-sufficiency in the food sector.
Amidst the growing appetite for convenience foods and baked products, Nigeria now spends an estimated $3.03 billion annually to import wheat, a figure that indicates the extraordinary rise in demand for the cereal grain.
The wheat industry in Nigeria has undergone notable transformations in recent years, with prominent companies undergoing consolidation and restructuring.
In 2019, Flour Mills of Nigeria, a major player in the Nigerian wheat market, acquired its leading rival, Honeywell Flour Mills.
Olam International, another prominent player, also made strategic acquisitions in the sector, with Crown Flour Mills and Dangote Flour Mills joining the company’s portfolio in 2010 and 2019, respectively.
Dufil Prima Foods, owned by Singaporean consumer foods giant Tolaram Group, has also made a dominant presence in the Nigerian market, accounting for at least 10 percent of the wheat importation needed to manufacture its flagship product, Indomie Noodles.
While these large millers have consistently accounted for a significant share of wheat imports into the country, market analysis shows that their impact extends beyond the mere volume of wheat imported.
These companies represent key stakeholders in the Nigerian economic landscape, with their substantial production capacities and their combined employment of over 25,000 workers, thus reinforcing their critical role in the country’s economic and industrial development.
The current discourse in Nigeria’s food industry revolves around the idea that the country’s continued reliance on wheat imports from key suppliers, including Latvia, Canada, Lithuania, the United States, Poland, and Argentina, is detrimental to the country’s food security and sovereignty.
Given the pressing nature of Nigeria’s reliance on wheat imports, experts in the field have strongly denounced the country’s exorbitant spending on wheat importation annually, highlighting the need for sustainable measures that focus on bolstering local wheat production.
Recently, stakeholders from the West and Central Africa Collaborative Wheat Network (WECAWheat) convened for a two-day summit, aiming to address the issues that have hampered domestic wheat production in the region, while simultaneously exploring ways to bridge the gap between local wheat production and the ever-growing demand for the grain.
In recognition of the urgency to strengthen regional agricultural capacity and collaboration, the summit welcomed a diverse group of key stakeholders from across West and Central Africa. This included seed scientists from numerous universities, representatives from the private sector, wheat farmers, processors, the African Development Bank, the Technologies for African Agricultural Transformation (TAAT), and agricultural research institutes that have wheat as their mandate crop in the region.
Stakeholders at the event pointed out that a widening food gap stemming from factors such as population growth, urbanisation, dietary shifts, and increased demand for wheat-based products, including bread, pastries, noodles, and innovative wheat-based products, is among the primary reasons for the widening demand-supply gap for wheat in West and Central Africa.
In his keynote address at the conference, Akinwumi Adesina, the president of the African Development Bank (AfDB), emphasised the urgent need for increased investment and innovation in wheat production to bolster food security in Nigeria and the African continent.
With concern over the region’s heavy reliance on wheat imports, Adesina warned that this dependence puts food security and economic stability at risk.
The AfDB president also emphasised the immense potential for sustainable food security and economic growth that could be unlocked through the transformation of Nigeria’s wheat sector.
Adesina, represented by Abdul Kamara, the AfDB’s director general for Nigeria, underscored the critical role that technological advancements could play in boosting agriculture and food security in West and Central Africa.
Adesina highlighted the example of the Cerrado Savannah of Brazil, a region that has successfully embraced innovative technological advancements in mechanization, farming techniques, irrigation systems, and high-yield crop varieties, leading to significant increases in crop yields over the past two decades.
Adesina presented a compelling case that, with the implementation of appropriate policies, technology could prove instrumental in addressing some of the most pressing challenges faced by farmers in West and Central Africa, including those related to the effects of climate change, lack of access to financing, and significant post-harvest losses.
Adesina called attention to the growing consumption of wheat in Africa, which has witnessed a threefold increase from 25 million metric tonnes two decades ago to over 75 million metric tonnes in recent times.
He also used India’s agricultural success as a compelling point of comparison, pointing out how modern agricultural practices have facilitated the transformation of small-scale farmers into successful agricultural entrepreneurs in the country.
In his presentation, Benjamin Ewa Ubi, regional coordinator of West & Central Africa Wheat Development Network and a plant breeding and biotechnology expert, noted the alarming disparities in Nigeria’s wheat production and consumption, highlighting that while the country’s annual wheat consumption amounts to around 6.06 million metric tonnes, its 2023 wheat production figures are projected to be a mere 200,000 metric tonnes, necessitating the importation of approximately six million metric tons of wheat at a cost of approximately $3.03 billion.
In his remarks, Ubi proposed a potentially game-changing solution to Nigeria’s wheat import dependence, suggesting that if half of the $3.3 billion currently spent on wheat importation is allocated to wheat research, Nigeria would not only be able to achieve self-sufficiency in wheat production but also generate a surplus for export.
“Imagine if we allocated half of this amount ($3 billion) to research and development; we could sustain our wheat production and even export surplus.
“We must work together to avoid vulnerabilities in our food supply chain and ensure food sovereignty,” he stated.
Ubi also underscored the critical importance of a coordinated, multi-pronged approach towards achieving regional self-sufficiency in wheat production, calling for the implementation of national wheat strategies across West and Central Africa.
Also speaking at the summit, Baba Gana Jugudum Kabir, the executive director of the Lake Chad Research Institute in Maiduguri, Borno State, also called for swift action to boost wheat production in Nigeria and the broader West and Central African region.
Kabir emphasised the scale of the challenge facing Nigeria’s wheat sector, revealing that the country’s current wheat production levels are only capable of meeting five percent of the nation’s domestic demand.
According to Kabir, achieving self-sufficiency in wheat production would require concerted efforts to improve several key aspects of wheat cultivation, including productivity, arable land availability, and the efficiency of wheat breeding programs for the development of new, high-yielding wheat varieties.
“The federal government has expressed commitment to reducing food importation and achieving self-sufficiency in food production. We urge them to speed up the implementation of the wheat roadmap and support research efforts,” he stated.
Kabir suggested various interventions necessary for the success of Nigeria’s wheat sector, including the development of an effective extension system to facilitate the dissemination of research findings to farmers, the promotion of agricultural mechanisation to enhance productivity, and increased funding for agricultural research.
During the event, speakers from Chad, Cameroon, Sudan, Benin Republic, and Niger Republic, discussed the urgent need for the region to re-evaluate its current wheat production and trade strategies to address the pressing issue of food insecurity.
The event’s agenda also focused on discussions around policy reforms that could strengthen the region’s wheat value chain, promote sustainable wheat production, and foster wheat commerce within West and Central Africa.
The experts at the West and Central Africa Wheat Summit placed particular emphasis on the crucial role that climate-smart practices, environmental conservation, and sustainable agriculture play in ensuring long-term food security and economic stability in the region.
They also underscored the importance of strengthening regional collaboration, partnerships, and networking between diverse stakeholders, such as governments, international organisations, regional crop networks, research institutes, agribusinesses, farmers’ associations, and others, to promote collective action and innovation in the wheat sector and address the challenges facing the industry.