Question

C - There is a high level of uncertainty in the global economy as a result of COVID-19, which has negatively affected global trade. The impact of this pandemic has left even the most developed economies crippled.

In the absence of COVID-19, would Nigeria have made it to South Africa’s list of the top 5 trading partners by exports in the Agricultural sector. Use the CAGE framework to answer this question and provide a well substantiated answer.

[25 marks]

Answer 1

The unprecedented outbreak of COVID-19 presents a disturbing crisis that the entire world is struggling with. The pandemic has not only impacted the human capital, but also there is a major financial, business and commercial effect being felt all around. Consequently, SME (Small and Medium Enterprises) businesses in Nigeria have been adversely impacted and are already witnessing COVID-19 disruptions.

For a nation like Nigeria that is highly dependent on its agriculture sector for foreign exchange and employment, Covid 19 has posed a major threat as it is a source of food and raw materials for industries.

CAGE Framework:

· Cultural Differences: Due to desertification and water exhaustion in Northern Nigeria, herd owners have moved to Southern Nigeria in search of grazing fields and water for their livestock. This has led to conflict and violence with the crop farmers. Increasing violence is leading to decline in Nigeria’s food production output. Moreover, there has been a disruption in the farming season due to imposition of lockdown. Migration of labour, raw material has become difficult as supply chains have been disrupted.

· Administrative Differences: As a consequence of Covid-19 in the northern Nigeria which is the center of food produce, labour scarcity can defer some of the agrarian practices such as planting and harvesting, fertilizer supply, irrigation and pest control. In addition, the cost of products has soared an all-time high.

· Geographic Differences: Nigeria is going to face a few difficulties in exporting agriculture produce such as grains, wheat, rice, etc. from the country to other neighboring and European nations mainly because of the constraints of interstate and international transportation among states and countries respectively. Logistic constraints at ports causes more hindrance to the agribusiness exports.

· Economic Differences: Many nations have taken stringent steps to control the spread of infection such as home quarantine, lockdown, travel bans and business closure. Since agriculture produce is perishable in nature, farmers are bound to hold their unsold produce for a longer period of time which ultimately goes to waste when markets do not open up. Essential products such as water and food doubled in price because of panic buying and storing.