56-year-old farmer and father of five Mohammed Abdulsalam is concerned as he sees his livelihood eroding over time.
Due to the ongoing naira shortage in the largest economy in Africa, Abdulsalam’s 10 hectare tomato farm in Karu Local Government of Kano State has been reduced to a ghost of its former self.
He was left with roughly 200 baskets of fresh tomatoes that he was unable to sell before the country’s currency swap’s initial deadline of January 31 because of the dearth of naira and his lack of a bank account.
Since most businesses, especially those in the food industry, are informal and highly reliant on cash, the country’s cash scarcity has decreased demand for goods and services as cost-conscious consumers struggle to fulfill their daily cash transaction demands, leading many to restrict their spending.
Abdulsalam stated, “The company through which I have made my living is practically crumbling. “People were not willing to buy because I had to sell each basket of tomatoes for half of what it cost to produce,”
He claimed that because his fruit is so perishable, he had to lower his prices in order to sell his products.
He lacks a bank account, thus he cannot receive money online. He said in a voice devoid of optimism, “I have incurred a significant loss owing to the scarcity and am yet to gather enough finances to go back to the field again.
Because tomatoes have a limited shelf life, he has lost an estimated N1.5 million in earnings.
The Central Bank of Nigeria’s naira redesign policy has caused catastrophic losses for many farmers who raise perishable goods around the nation, like Abdulsalam.
Many of them closed their enterprises as a result of the crisis, which had a detrimental impact on their way of life. Post-harvest losses have increased significantly, with a current estimate of $9 billion.
Additionally, it poses a threat to the recent gains in agricultural industry employment. In December, President Muhammadu Buhari claimed that his administration’s agricultural revolution had resulted in the creation of nearly 13 million new employment.
Many employment in the agriculture sector will be lost if the currency shortage lasts until May, when the Buhari administration will take over to the new president, according to Abiodun Olorondenro, operations manager at Aquashoots.
He claims that while farmers mourn their losses and reduce production, many jobs are being destroyed. According to the most recent job data available from the National Bureau of Statistics, Nigeria’s unemployment rate as of the fourth quarter of 2020 was 33.3%.
The currency redesign initiative was introduced by the Central Bank of Nigeria (CBN) in December 2022 to combat inflation and absorb surplus money outside the banking sector.
But, the CBN’s mismanaged strategy has failed to combat inflation and is now posing a threat to farmers in Africa’s largest economy who are already contending with high input costs, logistical challenges, and a changing climate.
The naira redesign strategy, according to Kabiru Fara, national president of the Agro Inputs Dealers Association, has had a negative impact on the agriculture industry because the majority of rural farmers do not have bank accounts.
How can you implement a cashless policy in Zamfara, a key agricultural producing state, where there are only two local governments with banks? he questioned. “I hope the policy is investigated and, if possible, reversed.”
Due to the cash shortage, farmers have continued to record losses, and they are concerned that when production falls in the second quarter of the year, there may be a developing food crisis in Africa’s most populous country.