Revamping the image of Nigeria’s agricultural sector to ensure consistent sustainable growth 1
With the waning price of oil, Nigeria’s pressure to find other sources of revenue for government spending as well as stabilising the economy from future external shocks has been heightened. As almost 90 per cent of government revenue comes from oil, the former Finance Minister Dr. Ngozi Okonjo-Iweala aimed to structure the 2015 budget as if Nigeria was not an oil-producing nation. In the agriculture sector, evidence of this diversification may be seen. Food imports declined from ₦1.1 trillion ($6.7 billion) in 2009 to ₦684 billion ($4.35 billion) in 2013 and there are recent government efforts to boost the interest in the agricultural industry to youths and other interested parties through the launch of the Agricultural Transformation Agenda (ATA), a major structural reform of the Nigerian agriculture sector. Billions of naira and millions of dollars have been pledged to support financially small and medium scale farmers and facilitate the access to agricultural equipment hiring enterprises. Efforts are commendable but are they enough?
World Bank shows that compared with its African peers, the Nigerian government’s expenditure on agriculture as a share of total government expenditure and in proportion to agricultural GDP, are well below average. World Bank statistics show for the period 2000-10, agricultural spending as a share of total spending averaged only 3.8 per cent. This figure is less than the continental average 5.4 per cent, the West African average of 7.4 per cent and it actually was woefully halved in 2014 to 1.8 per cent. How can the ambition for a transformed agricultural sector be achieved with such little government input?
Agriculture contributes between 30 per cent and 40 per cent of Gross Domestic Product. In addition, despite the fecundity of Nigeria’s land, only 40 per cent of the 75 per cent arable land is cultivated. With such a gap existing, the underutilised potential shows that there is still vastly more to do. Ten per cent of the present population still are unable to meet their daily calorific needs due to affordability, effective mass food production, storage and distribution. Nigeria tops the list of 11 Economic Community of West African States (ECOWAS) countries that have over one million people affected by hunger and under-nourishment. With Nigeria’s population projected to grow to about 259 million people by 2050, the issue with Nigeria’s agricultural development is that the sectors rate of growth and productivity, relative to other sectors of its modernizing economy, is not accelerating quickly enough. This issue must be solved to ensure that citizens and investors are attracted to solving issues in this sector instead of flocking to other higher growth/return industries.
Changing the image of agriculture
How can this be done? Firstly, a simple way is by changing the current image and adjectives associated with agricultural related jobs and careers from “rural”, “backward” and “peasantry” to “vibrant”, “entrepreneurial” and “creative”. These are buzzwords used for other booming sectors of Nigeria’s economy so why not for agriculture? The wandering eyes of the youth, for this the highest unemployed demographic of the Nigerian economy, must be trained to focus on the potential that exists in the agricultural sector. Vast opportunities exist in an integrated agriculture value system in areas such as processing, marketing, logistics, Information Technology, strategy, investment planning and finance. The private or public sectors need to be become more active through partnerships with Information Technology sectors, creative industries to develop marketing techniques and manufacturing sectors to produce labour saving and processing techniques. This will ensure that agriculture is not just seen simply as “farming” but as an aspect of the economy that is integral to all areas of growth.
Ecologically and economically viable agricultural technology
An essential condition for success in achieving sustained productivity growth in agriculture in a developing country is the capacity to generate ecologically adapted and economically viable agricultural technology. This means ideally, technical innovations, which reduce the inherent inflexibility of inelastic factors of production, such as land or labour. This may enable agricultural producers realise relatively more profit and therefore, achieve sustainable growth. How does this ecologically adapted viable agricultural technology occur? It happens when farmers, being induced by the prices and costs of production, search for technical alternatives, which save on their limited factors of production. Farmers or “Nagropreneurs” (young Nigerian entrepreneurs in agriculture), to use the terminology coined by the Ministry of Agriculture, press public research institutions to develop new technology and demand that agricultural supply firms supply reasonably priced modern technical inputs which substitute scarce factors of capital, land and labour.
Perceptive actors in the economy, such as other local or international farmers, scientists, agricultural entrepreneurs and public administrators, respond by making available new technical possibilities and new inputs which enable farmers to profitably substitute the increasingly abundant factors for current scarce factors. These fresh technical possibilities and innovative inputs are solutions, which Nigeria’s Ministry of Agriculture, should promote in addition to the amount of finance and programmes allocated to farming. Increasingly agricultural opportunities are seen only for farmers to solve but the ministry should call upon engineers, scientists, marketers, supply chain experts and finance professionals. Their actions enable the inelasticity, which exists in the agricultural sector, to be lessened.
An example of both ‘land saving’ and ‘labour saving’ new technology is a company that takes advantage of bringing together innovative technology, digital media and social organisations to improve agriculture, health and nutrition in sub-Saharan countries in Africa. For instance, sharing farming techniques and weather updates via text message can enable small scale farmers to share best practices reducing the amount of loss to the farmers through inefficient farming techniques, maximising the land mass they have in possession and expert knowledge on particular crops. It is also pivotal as it involves digital media, which is another flourishing part of the economy. On a larger scale, in academic studies, irrigation and annual average rainfall have been shown to have a positive relationship with agricultural output. Involving irrigation experts, domestic (or international partners) agric-engineers and agric-logistics companies in farm and seed research, farm planning, planting, harvesting to processing may reduce the costs associated with the lifecycle of production and as a consequence, increase profitability through enabling all-year-round production. Other industrial actors may involve themselves in preparing the goods for export, marketing, business strategy and product placement to ensure that the final goods are appealing to foreign buyers.
• To be Continued