There is no gain saying that Nigeria’s food sector can be singled out as one of the most vivacious industries, with its contribution of over 6% in the employment of labour.
Just any one can be a food vendor or retailer, with hundreds of thousands of restaurants or canteen as popular known in the Nigerian context scattered across the country. One can say Nigeria stands out among its contemporaries on the continent in the area of food, which is worth over one billion Naira.
The growth in the food sector has no doubt been a key contributor to the Nigerian economy through the creation of employment opportunities for Nigerians according to a report released recently by the National Bureau of Statistics, focusing on the job generation, the food sector created well over 1,190 jobs in the Q3 of 2015; making it about 2.9% of total formal jobs.
This is despite the downturn in the economy and the Naira-dollar predicaments that have sent some companies in most sector of the Nigerian economy packing.
Last year the sector grew by 2.3% y/y compared with 18% in 2014. The slowdown in growth reflects the current macro challenges which have negatively impacted consumer spending.
The inflation data for March show that prices in the Restaurant and Hotel sector rose by 8.7% y/y compared with 9.0% recorded in February. This component has a 1.2% weighting in the index.
The Oxford Business Group reported that as of 2014, there where over 600,000 workers employed in the food industry.
The food industry has grown rapidly due to affordability and convenience. Furthermore a fast-growing overall population and an increasing urbanisation are other catalyst encouraging this growth.
A recent survey carried out by an indigenous Credit Rating and Risk Management Company disclosed that close to 80% of reservations are made by corporate entities.
It would be recalled that the Central bank of Nigeria had in 2015 place a ban on the importation of 41 items which is expected to ease pressure on Nigeria’s import bill over time.
In the fourth quarter of 2015, food products accounted for 11% of sectoral utilisation of foreign exchange compared with 13% recorded in the previous quarter.
It is believed that with the banning of importing food inputs, it should drive restaurateurs or canteen owners to source inputs locally which could boost growth in the agriculture sector.
BY IMOH EDET | CONTRIBUTOR