Amidst several challenges in the agriculture sector of the Nigerian economy, insurance industry expert has hinted that an annual premium income estimated at $600million is lost to inadequate investment in the sector.
Disclosing this at the Africa Re’s Agriculture Insurance Workshop for Nigeria in Lagos, Deputy Managing Director/Chief Operating Officer of African Reinsurance Corporation, Africa Re, Mr. Ken Aghoghovbia, said that agriculture remains a key contributor to Nigeria’s gross domestic product, GDP, but is undermined by limited investments in the sector.
Aghoghovbia stated: “Agriculture remains a key contributor to Nigeria’s GDP, and like in many emerging economies, accounts for 30% of the country’s total economic output; providing employment to at least 35% of its over 200 million population.
“With sustained pressure on food security, arising from the increasing population and the government’s push to diversify the economy, agriculture will continue to be a key area of focus for many years to come.
“Sadly, this undertaking is undermined by the limited investments in the sector, and the uncertainties resulting from the effects of climate change.
“Since 2017, the agriculture class of business has generated a lot of interest from several market players, and currently, at least 16 insurance companies have received NAICOM’s approval to underwrite the business, thus complementing the efforts of the Nigeria Agriculture Insurance Company (NAIC).
“Owing to the richness of farming in Nigeria, it is projected that the market has a potential to generate at least USD 600 million worth of agriculture insurance premium in a year, against the USD 10 million reported during the year 2021.”