An analysis of the National Bureau of Statistics’ (NBS) Gross Domestic Output figures has shown that Nigeria’s agro-allied industry has continuously been on the decline for most of the past thirty-eight years. The output from the industry has fallen from N5,100 billion in 1981 to N4,598 billion in 2018. These figures show that the capacity of the agro-allied industry to process agriculture produce has been reducing even though agricultural production is increasing.
According to the NBS classification, the agro-allied industry comprises of four main categories, namely: food, beverage and tobacco; textile, apparel and footwear; wood and wood products; pulp, paper and paper products.
In the food, beverage and tobacco industry, there was a decline in production amount from N3,278 billion in 1981 to N2,900 billion in 2018. Another sub-sector – the textile, apparel and footwear manufacturing also declined from N1,746 billion worth of product in 1981 to N344 billion in 2010. Renewed efforts to revive the industry but raised its levels of output to N1,443 billion by 2018. All the same, this latest improvement in production by 2018 is still less than the level of production in 1981.
| Year/
Sub-sector |
Food, Beverage and Tobacco | Textile, Apparel and Footwear | Wood and Wood Products | Pulp, Paper and Paper Products | Sum of Agro-allied Industry |
| 1981 | 3,278,235.86 | 1,746,096.23 | 53,315.21 | 22,673.29 | 5,100,320.60 |
| 1982 | 3,042,925.81 | 674,266.04 | 50,311.12 | 24,171.33 | 3,791,674.30 |
| 1983 | 2,096,317.31 | 722,403.16 | 54,749.58 | 21,933.68 | 2,895,403.73 |
| 1984 | 2,139,263.63 | 624,224.21 | 59,579.60 | 19,903.18 | 2,842,970.62 |
| 1985 | 2,114,211.61 | 532,798.30 | 53,641.16 | 22,322.46 | 2,722,973.53 |
| 1986 | 2,009,529.95 | 363,279.44 | 48,294.61 | 25,035.81 | 2,446,139.81 |
| 1987 | 2,376,363.12 | 661,798.87 | 53,333.78 | 22,387.54 | 3,113,883.31 |
| 1988 | 2,965,980.32 | 612,276.50 | 58,898.74 | 20,019.41 | 3,657,174.98 |
| 1989 | 2,405,888.71 | 460,592.62 | 55,458.83 | 21,366.12 | 2,943,306.28 |
| 1990 | 2,684,145.09 | 519,465.36 | 52,219.82 | 22,803.41 | 3,278,633.68 |
| 1991 | 2,752,143.43 | 762,748.30 | 49,169.98 | 24,337.39 | 3,588,399.11 |
| 1992 | 3,220,079.39 | 795,474.62 | 50,921.52 | 23,411.39 | 4,089,886.91 |
| 1993 | 2,560,674.41 | 630,457.79 | 52,735.45 | 22,520.61 | 3,266,388.27 |
| 1994 | 2,251,997.73 | 484,488.03 | 54,614.00 | 21,663.73 | 2,812,763.48 |
| 1995 | 1,893,217.00 | 385,096.99 | 53,658.14 | 22,083.94 | 2,354,056.07 |
| 1996 | 1,928,110.89 | 440,333.47 | 52,719.01 | 22,512.30 | 2,443,675.67 |
| 1997 | 1,988,951.51 | 433,060.96 | 51,796.32 | 22,948.97 | 2,496,757.76 |
| 1998 | 2,029,213.68 | 392,888.97 | 50,889.78 | 23,394.11 | 2,496,386.54 |
| 1999 | 2,098,106.74 | 388,386.93 | 49,999.10 | 23,847.89 | 2,560,340.67 |
| 2000 | 2,102,580.32 | 391,157.42 | 50,665.68 | 23,617.67 | 2,568,021.08 |
| 2001 | 2,079,317.73 | 383,538.59 | 51,341.14 | 23,389.67 | 2,537,587.13 |
| 2002 | 2,630,462.18 | 378,690.25 | 51,907.54 | 23,065.67 | 3,084,125.64 |
| 2003 | 2,183,104.67 | 390,811.11 | 87,673.09 | 23,049.66 | 2,684,638.53 |
| 2004 | 2,133,000.63 | 384,577.52 | 90,018.26 | 22,883.46 | 2,630,479.87 |
| 2005 | 2,158,947.36 | 387,694.31 | 94,478.74 | 23,933.20 | 2,665,053.61 |
| 2006 | 2,169,683.94 | 361,547.89 | 99,380.50 | 23,623.03 | 2,654,235.37 |
| 2007 | 2,111,527.47 | 385,443.30 | 104,371.88 | 23,608.16 | 2,624,950.81 |
| 2008 | 2,165,210.37 | 374,015.06 | 115,254.91 | 23,425.66 | 2,677,905.99 |
| 2009 | 2,268,102.60 | 344,059.22 | 121,363.68 | 23,510.42 | 2,757,035.92 |
| 2010 | 2,298,522.91 | 352,543.82 | 123,384.10 | 24,355.21 | 2,798,806.04 |
| 2011 | 2,466,513.33 | 571,846.10 | 130,265.97 | 28,516.20 | 3,197,141.61 |
| 2012 | 2,628,306.89 | 815,285.85 | 157,343.70 | 30,348.04 | 3,631,284.48 |
| 2013 | 2,938,606.11 | 1,096,388.66 | 171,312.06 | 44,017.16 | 4,250,323.99 |
| 2014 | 3,104,004.91 | 1,438,342.87 | 193,065.36 | 50,243.71 | 4,785,656.85 |
| 2015 | 2,937,062.39 | 1,423,019.65 | 205,212.33 | 53,671.22 | 4,618,965.59 |
| 2016 | 2,752,898.95 | 1,407,504.32 | 196,929.27 | 51,431.11 | 4,408,763.66 |
| 2017 | 2,817,563.62 | 1,419,074.45 | 197,977.82 | 51,490.58 | 4,486,106.48 |
| 2018 | 2,900,145.02 | 1,443,029.85 | 201,348.53 | 53,259.90 | 4,597,783.31 |
Unlike the two former categories, wood and wood products increased from N22,673 in 1981 to N201,349 in 2018. Likewise, the value of pulp, paper and paper products rose from N22,673 billion in 1981 to N53,360 billion.
While the country may have a comparative advantage in primary agriculture, the negative implication of growth in primary agriculture without commensurate growth in the capacity of the country’s agro-allied industry is that the chunk of the products will be sold at cheaper value, with the country losing much of its potential gains on investment in the primary agricultural sector. The agro-allied industry has contributed only an average of 0.08% to the entire manufacturing sector in the past thirty-eight years.
For eighteen straight years (1981-1998), the value of Nigeria’s industrial output surpassed other sectors of the economy until 1999, when the growth in the services sector began to outpace it until now. For the primary agricultural sector which produced the lowest value of output for seventeen straight years (1981-2007), the year 2008 was its own time to catch up and outpace the slow growth in the industrial sector. The primary agricultural output has surpassed the industrial output in its Naira value ever since then. (See chart 2 below).
This has been the situation since the year 2008 when primary agricultural production surpassed industrial production for the first time in the period under review, with N11,645 billion. This was a moderate margin of N286 billion over the N11,359 billion worth of industrial output in that year.
From that period until now, the gap has widened. By 2018, the margin of the primary agricultural sector over industry has widened by 1,656% further to N5,031 billion, with 2018 primary agriculture product value being N17,544 billion and Industrial product valued at N12,513 billion.
Nigeria’s industrial sector has also experienced a consistent decline in its level of contribution to the country’s economic growth over the years. Its output fell from 55.76 per cent of the Gross Domestic Product in 1981 to its lowest value of 17.76% of gross output in 2016. Yet, the sector began to show signs of recovery in 2017 and 2018 with 17.99% and 22.24% levels of contribution to the country’s value of production (see chart 3 below).
The lack of skill and innovation with the industrial sector may not completely be a challenge. The fact that the Services sector has been growing over the years shows that is not always the case. The major problem bedevilling the industrial sector’s capacity for growth is the failure of electric energy, besides other vital infrastructure deficits for storage, processing and transport. Until the government fix the electricity problem, the country’s capacity for economic growth remains undermined.
Thus, the restriction on imports of processed foods will only lead to scarcity because the few agro-allied industries cannot meet the demands of a teeming population. As demand exceeds supply, the price of processed produce becomes higher. The local agro-allied industries also have to sell at higher costs due to higher costs on energy and other production inputs compared to their foreign competitors. This only adds to the already high inflationary pressure.