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Agriculture Helping to Wean Nigeria’s Economy Off Oil


Mohammed Momoh

Tue, 29 Oct 2019 13:09 GMT

Nigeria has earned more than $600 billion from oil since it gained independence in 1960 and the sector provides 95% of its foreign exchange earnings and supports 80% of budgetary revenues.

However, the long years of dependence on oil revenues have caused a steady decline of investment in – and thus output of – the agricultural sector, which prior to the discovery of oil had been the primary foreign exchange earner.

With the slow decline of agriculture, Nigeria became a nation incapable of rising and adapting to industrial challenges. The nation became a massive importer of food, with only oil as the sole export product.

With more than 200 million mouths to feed, Nigeria started feeling the heat in 2014 as a glut hit the oil market causing a crash in the price and a decline in exports. The minimum earning of $110 per barrel of crude dipped below $60 and dropped further in 2015, sparking a recession. 

Besides the oversupply in the oil market, activities of militants in the oil-rich Niger Delta caused a fall in production from 2.3 million barrels per day (bpd) to below 800,000 bpd. On top of this, vandalism to the oil and gas infrastructure by the militants caused further supply problems.

Nigeria was in a major crisis, stoking up trouble for the future. Apart from turning to loans to complement its depleting foreign reserves, the country lacked the industrial capacity and the ability to face social problems in education, healthcare, and employment, while its political management provoked anger among its young people.

Today, extreme violence is exemplified by the Boko-Haram insurgency, although this is now in decline in the Niger Delta region. But increasing banditry, kidnapping and general hopelessness have resulted in a crisis of migration from rural to urban areas and even across international borders.

As the country struggles to survive the recession and solve its myriad of problems, Nigeria has resolved to diversify, with agriculture identifiable as the frontline economic powerhouse for growth, a provider of jobs and income as well as a potential cure for violence. As well as addressing chronic food insecurity, a focus on agriculture could also serve as an engine of transformative growth, generating significant export revenue. 

Nigeria’s current Agriculture Promotion Policy, tagged as “The Green Alternative,” has set an agenda to create wealth and added value through crop, livestock, timber and fishery production. It involves multiple stakeholders – from farmers’ groups, investors, processors and lenders to civil servants, academics and many more who provide detailed input, commentary, and support. 

The Green Alternative is driven by five planks - the Anchor Borrowers Programme, the Presidential Fertilizer Initiative (PFI), the Youth Farm Lab, the Presidential Economic Diversification Initiative (PEDI) and the Food Security Council.

It holds key stakeholders to build an agribusiness economy capable of delivering sustained prosperity by meeting domestic food security needs, generating exports, and supporting sustainable income and job creation.

Nigeria has also declared food a human right, thus focusing the policy instruments for agricultural development on the social responsibility of regional governments with respect to ensuring food security, social cohesion and equity.

Outlining this policy last year, Nigeria’s then Minister of Agriculture and Rural Development, Mr Audu Ogbeh, stated that “We want to take steps to make sure that our children do not continue to live a life of hopelessness. Nor do we continue to dream that arriving in Europe means instant wealth and comfort. We want to teach our children to work, to earn a living and not continue to be a burden to our European friends and partners.”

“We envisage that by embarking on a meaningful agricultural programme, we would begin to immediately reverse migration first from the cities to the villages, and even from the cities in Europe, back to Nigeria. Because it is not for lack of what to do, but lack of will to do what is right,” he said.

Ogbeh, who retired as minister in May 2019, said that the steps already taken to take Nigeria into agriculture have started yielding desired results. He pointed to rice production, which has already achieved import savings of $5 million a day and added that the Central Bank of Nigeria (CBN) confirmed savings of $21 billion in the food imports bill alone within the thirty-four months up to May 2019.

Some crucial issues remained, he said. “We are the world’s largest producer of cassava, but no local value is added through converting this product into ethanol, industrial starch, syrups, glues, and even shopping bags as is currently promoted in today’s sustainable agenda.” 

“There is a vast opportunity in cassava to convert the leaves and peel into livestock feed for large ruminants, especially. We intend to achieve this and more, in the current Livestock Transformation Agenda, we have promoted significant investment in the upstream value chain of cassava in the last four years.’’

The agenda includes massive investment in rice production as well as in other produce such as palm oil, groundnuts, tomatoes, cotton, sugar, cashew nuts, cocoa, jute bags, sorghum, pineapples, pawpaw and passion fruit, bananas, and yams. Fish, livestock plus hides and skins are also included.

The main driver of the agenda is the mobilisation of young people in different parts of the country, creating awareness and organising them into geo-cooperatives in the various states of the federation.

Aside from liberalising land acquisition, the government has introduced an Anchor Borrower programme with the support of the CBN to help with the supply of fertilisers and create a ready market.

According to the policy of the Ministry of Agriculture and Rural Development, Nigeria’s goals are the provision of adequate food for an increasing population; supply of adequate raw materials to a growing industrial sector; preservation of a major source of employment; provision of a major source of foreign exchange earnings; and expansion of a market for products of the industrial sector.

Besides providing cheaper credit for agricultural initiatives and mechanisation, the government has embarked on training for young people on best practices and standardisation.

At the Agriculture Summit for Africa, organised by the Sterling Bank in Abuja in August 2019, Vice President Yemi Osinbajo, said that agriculture remained the solution to the dwindling economy and has been one of the cardinal points of the Economy Recovery Growth Plan (ERGP) of the government, with emphasis on developing an export-led economy.

Asue Ighodalo, Chairman of the Sterling Bank, said agriculture formed a significant sector of the economy in eradicating poverty and hunger but also boosted trade and investment.

Dr John Isemede, Lecturer in Business Administration at the University of Benin, said that banks played the lead role in growing the agricultural sector and creating wealth for the nation.

“It is imperative to give stakeholders, universities and research institutes among others the target to see how to export Nigeria’s goods and services as Nigeria has a lot to benefit from agriculture.”

Daniel Okafor, the National President of the Potatoes Farmers Association (POFAN) told 7Dnews of the need for adequate credit lines for agriculture and for involving the right people. 

“We must start treating the nation’s farmers with respect and not relegate them.”

Aminu Goronyo, the National President of the Rice Farmers Association of Nigeria (RIFAN), also told 7DNews that the closure of Nigeria’s land borders with Cameroon, Benin, Niger and Chad in August was not to enrich rice farmers but to encourage patriotism.

“We have realised many successes by the border closure resulting in the saving of about $1 billion from the annual rice importation to Nigeria. Today, we are no longer dependent on the import of rice.

“Before 2015, Nigeria spent nothing less than $1.2 billion on rice importation yearly but today that same money is in circulation within the country’s business community.’’

Prof Kolawole Adebayo of the Federal University of Agriculture, Abeokuta, said that Nigeria should invest more in the necessary infrastructure to provide an incentive for agriculture development.

“Infrastructure like electricity, water, health services and education are very important because if the local farmer has these infrastructures in his neighbourhood, he will perform better in production.’’

Nigeria’s new Minister of Agriculture and Rural Development, Sabo Nanono, said on October 17th, 2019 that Nigeria has achieved 80% of its potential performance in the agricultural sector.

At the public presentation of the Executive Summary of Wet Season Agricultural Performance in Nigeria by the National Agricultural Extension and Research Liaison Services (NAERLS) in Abuja, he said, “We are not doing badly. I hope that next year we will reach the real mark.”

In a tweet on August 14th, 2019 on Nigeria’s plan to rekindle its agriculture and expand national output, President Muhammadu Buhari said, “We are taking our focus on agriculture to the next level.” 

Sworn-in on May 29th this year for a second term, President Buhari said that within the next four years there will be the introduction and implementation of “policies that will support cultivation and consumption of locally produced food items.”