Agric revolution: Time to make a bold move
Renowned physicist and Nobel Laureate, Albert Einstein once quipped, “In the middle of difficulty lies opportunity.” A careful consideration of Nigeria’s current economic meltdown reveals the truth behind this aphorism and why serious attention must be paid towards diversifying the economy. In recent times, the country’s forex reserves have dropped below $30 billion as at January, 2016 and the currency has continued to lose value as the gulf between the parallel market and official window of the Naira to the dollar widens further.
Crude oil accounts for over 90 per cent of Nigeria’s foreign exchange earnings, 35 per cent of GDP, 75 per cent of government revenue and has become the sun around which everything revolves. With the fall in oil prices, and with no commensurate cut in production, Nigeria now finds itself in an economic alley. How did we get here? The reasons include: overdependence on oil and non-diversification of the economy. But this was not always this case; agriculture used to be the nation’s principal foreign exchange earner in the early 60s.
The current state of agriculture in Nigeria is only a shadow of what it used to be but it can be said that there are encouraging signs of improvement. It is common knowledge that about 80 per cent of land is arable and has produced major crops, including beans, sesame, cashew nuts, cassava, cocoa beans, groundnuts, kolanut, maize (corn), melon, rice, millet, palm kernels, palm oil, plantains and rubber, among others. For many decades, the sector has been underfunded and neglected. As such, small holder farming forms a large percentage of the sector within Nigeria. Poor farming methodologies, lack of access to finance, post-harvest losses due to lack of storage facilities, unreliable power supply, poor transport infrastructure and unattractiveness of farming in terms of returns for many young people are some of the reasons why agriculture has remained on the back burner of our national life.
However, with its status as the largest employer of labour in the country, its huge potential to become a major foreign exchange earner and help boost the nation’s revenue base, now is the time for stakeholders to take a serious look at the sector, even as the nation moves away from over-dependence on oil.
It is heartwarming to see that corporate bodies such as the Dangote Group, Guinness Nigeria Plc, British American Tobacco Foundation, have picked up the gauntlet in the drive to give agriculture the oxygen it needs to thrive. During the company’s pre-annual general meeting briefing in Lagos, Peter Ndegwa, Managing Director of Guinness Nigeria had said that the company has a target of sourcing over 80% of its raw materials locally in the coming years.
Apart from driving down costs for the manufacturers and ease the pressure on the nation’s dwindling foreign reserves, local raw materials sourcing will also play an important role in creating employment opportunities, boost income levels and empower farmers along the agriculture value chain as well as small and medium enterprises who serve as suppliers to big businesses thereby resulting in such benefits as application of modern technologies, improved quality control, higher output, product marketing and self-sufficiency.
Similar initiatives by other private sector entities will decidedly trigger a huge impetus towards diversifying Nigeria’s economy and reclaiming its primacy as a leading agricultural economy.
Some of the strategic quick wins which all stakeholders must participate in include building the capacity of farmers, as skills development has been recognised as a critical factor to help farmers increase yields and boost productivity. Also enhancing the value of farmers via closer collaboration and association to facilitate the uptake of new technologies, such as warehousing and transportation, and identify better market intelligence solutions. Lastly, easy access to finance is an important fulcrum for the agricultural revolution we desire. As such, the legal and institutional framework which these farmers need as leverage to obtain finance must be firmly entrenched.
“Agriculture is the future of Nigeria. And agriculture that is modernised, that is productive, that is competitive. We must be a global player,” said former Minister of Agriculture and the current President of the African Development Bank, Dr. Akinwunmi Adesina. This is a lofty ambition. Now is the time to make the bold move.
Smart is a policy analyst and resides in Lagos
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