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Agriculture has always been a major source of revenue to the Nigerian economy, second only to oil resources which, in the past few decades, have received more attention as a commodity.
Experts have suggested that development in the agricultural sector is a major key to improving Nigeria’s economic situation, especially as citizens grapple with the crunching effect of recession brought about by the sharp fall in oil prices.
Ironically, the sector is unfortunately not reaching its full potential, which experts blame on decades of over-dependence on oil.
For instance, despite the fact that Nigeria is responsible for producing over 65% of tomatoes in West Africa, the country is one of the largest importers of tomato paste. Similarly, despite being the largest producer of cassava in the world, recent reports have revealed a rise in import of popular cassava by-product- Garri – into Nigeria from countries like India.
However, the fluctuating prices of commodities, untapped human and other resource; and demand in the wider economy now call for a shift from the heavy reliance on crude oil resources, and a diversification to wider economic interest. The result is that many governments across Africa are now shifting from traditional exports like commodities and oil, towards forging new broad-based investment partnerships in areas like manufacturing and agribusiness.
In terms of viability, strategies around agriculture are sustainable and will lead to long term economic stability.
The agricultural sector, which contributes up to 24% of Nigeria’s GDP, is however not without its challenges. Issues affecting the agricultural landscape span across lack of adequate infrastructure especially transportation, storage, energy and telecommunications/ ICT; climate change, due to unpredictable weather and temperature conditions; issues of land ownership and tenure; lack of adequate funding; high bank interest rates; lack of access to credit; and most importantly, the constant rural-urban migration which has depleted the population of required farmhands, especially young people.
Challenges notwithstanding, the agricultural sector is not one that can be overlooked. The President of the African Development Bank, Akinwunmi Adesina, has warned that agriculture should not be looked at as a social sector but as a business.
The sector still holds a lot of promise for African economies in the wake of the global recession. Benefits to be attained in investing across the agricultural value chain include reduction in the rate of unemployment, reduction of food importation; improved ranking on a global competitiveness scale; and development of food processing facilities for greater self-sufficiency and value added exports. Improvements to this sector will also encourage young people to venture into agriculture and become self-reliant.
In order to remain sustainable in a global market, governments must pioneer this change by investing more in the development of the sector.
According to Andrew Skipper, Partner and Head of Africa at global law firm Hogan Lovells, “African governments can position the sector to attract millions of dollars of investor monies looking for a home in Africa’s agricultural sector.”
According to him, “world economies are becoming uncertain and agribusiness is one of the larger sectors of opportunity. There are a lot of multi-national companies looking to invest in agriculture related infrastructure and the provision of agronomy expertise.”
Agriculture is considered to be one of the two areas of greatest promise for investors in Africa, and with oil prices remaining low, investors are being attracted to alternative sectors such as these, he said.
