Nigeria’s agriculture insurance industry has the potential to produce a premium of over $US600million due to its approximately 70 million hectares of agricultural land and variety of agricultural markets.
The deputy managing director/chief operating officer of African Reinsurance Corporation (Africa Re), Mr Ken Aghoghovbia, stated this at the 3rd Africa Re Agriculture Insurance Workshop for Nigeria in Lagos.
He asserted that crop insurance had enormous potential to improve the fortunes of Nigeria’s agricultural sector.
“In the last five years, agriculture insurance has received considerable attention from the insurance market players in Nigeria, who have been attracted by the opportunities that stem from the need to commercialise and modernise agriculture production and the quest of successive governments to diversify the economy.
“However, the current market reality paints a different picture. While gross market agriculture insurance premium grew to a peak of $US15million in 2021, this figure has declined significantly. This dismal performance is attributed to several factors that include non-renewal of the government- supported Anchor Borrowers Programme, the misalignment of business goals between various industry players and the lack of investment needed to help industry players design and develop agriculture insurance products that respond to the needs of farmers and realities of Nigeria’s agriculture landscape,” he said.
Mr Aghoghovbia said that in spite of its contribution to the gross domestic product, the agricultural sector had been hurt by several shocks, such as flooding, desertification of crop and grazing land, conflicts between herdsmen and local farmers, inadequate access to financing and low use of modern technology, adding that these challenges have stifled the sector’s productivity and created a huge gap between local food supply and demand leading to increased food imports.
On his part, Mohammad Aliyu, the International Finance Corporation (IFC) country officer for Nigeria, said the country, inclusive of insurance project, was a significant component of the organisation’s Africa inclusive insurance programme launched in 2022.
The central objective of the Nigeria project was to enhance the resilience of at least 300,000 smallholder farmers through expanded access to climate and agriculture-focused inclusive insurance products.
The two-day event organised under the IFC technical assistance provider mandate for the Nigeria Climate Insurance project, aims to bring together key stakeholders from the agriculture insurance industry in Nigeria.