AfDB worry over Nigeria’s agric growth
The African Development Bank, AfDB, has described growths recorded in Nigeria’s agriculture sector in 2018 as lack luster and uninspiring.
AfDB, in its latest African Economic Outlook 2019 and West Africa Economic Outlook 2019 report, attributed the situation to clashes between farmers and herdsmen, flooding and activities of the Islamist terror group, Boko Haram.
The bank also described Nigeria as an economy with a moderate risk of debt distress.
According to AfDB by June 2018, “the stock of public debt stood at $73.2billion, up from N71billion in 2017, representing 17.5percent of Gross Domestic Product.
“Despite the increase, Nigeria remained at moderate risk of debt distress. In November 2018, the government issued a Eurobond of $2.9billion which reflects its new debt management strategy of prioritising foreign debt to mitigate the high financing costs of domestic borrowing.
“Furthermore, relatively strong oil receipts solidified the current account surplus to an estimated 3.7percent and bolstered improvements in the terms of trade by about 13percent in 2018 alone.”
The report added, “The growing importance of services has bolstered growth in the economy. The sector accounts for about half of GDP, dwarfing the 10 percent from oil and 22percent from agriculture.
“Real GDP growth was an estimated 1.9percent in 2018, reflecting a recovery in services and industry – particularly mining, quarrying and manufacturing. The recovery benefited from greater availability of foreign exchange.
“Growth in agriculture was lacklustre; due partly to clashes between farmers and herders coupled with flooding in key middle - belt regions and continued insurgency in the North -East.”
The continental body also expressed worry over the rising external debt profile of African countries as it is increasing the burden of debt servicing.
Speaking during the launching of the reports Mr. Ebrima Faal, Senior Director, AfDB noted that “the issue of external debt is back on the radar in many countries. Average external debt is rising in the region and has nearly doubled over the past six years to 23.6 percent of GDP at end February 2019 compared with 13.5 percent in 2013. This has increased the burden of servicing external debt.”
AfDB thus advised African countries to watch their debts commitments going forward.
Faal also expressed worry over rising insecurity across Africa and the impact on unemployment as investments in the region dwindle.
“The delicate security situation in some parts of the region also continues to impede economic performance and social stability in the West African region,” he said.