Despite laudable policy interventions, from governments across board, the Nigerian agricultural sector is still largely underdeveloped. Scaling up production and enhancing value addition across value chain segments have also proved difficult.
Nigeria’s agricultural sector requires massive structural reforms and investments to increase production, and to create needed value addition across the most profitable segments of the value chain.
The financial service sector has not done enough to encourage agribusiness development and this has given impetus to fintech companies who are now investing massively in the sector.
Celullant, Africa’s leading payment service provider recently raised $47.5 million and, according to its Co-founder, Bolaji Akinboro, that money has been focused on providing service delivery and investment in agribusiness sector.
At an event to mark the 2018 world agriculture day, Akinboro noted that with the advent of commodities exchange in the country, agriculture has evolved into a tradeable asset and so must be seen as a business for the value chain to grow across the nation.
“The agric value chain in Nigeria is an untapped potential. The private sector is trying to harness this potential but the strategy is not right. The approach usually is from developed world perspective as against that of a developing country” said Africanfarmer Mogaji.
Yields of key crops produced in Nigeria have dwindled over the last 4 decades (in particular, cassava, cocoa beans and wheat). This is a reflection of low utilisation of improved seedlings, agrochemicals and particularly poor adoption of technology to drive production and create value.
Nigeria is the largest producer of cassava in the world, with about 50 million metric tons annually from a cultivated area of about 3.7 million hectare. The country accounts for up to 20 percent of the world’s cassava production, 34 per cent of the entire African continent and about 46 percent of West Africa.
The national average yield of cassava is estimated at about 13.63 MT per hectare, as against potential yield of up to 40 metric tons per hectare. This is possibly a reflection of poor utilization of improved inputs and technology to drive yield and production levels.
Agriculture in Nigeria remains the single largest and most important economic sector. The sector employs two-thirds of the entire labour force and its contribution to GDP has remained consistent over time.
For 2016 as whole, Agriculture increased its share contribution to GDP relative to 2015, to 24.43 percent, while contribution for 2017 was recorded as 25.08 percent up 2.6 percentage points due to its relatively strong growth rate.
According to the Food and Agriculture Organization (FOA), the overall level of agricultural infrastructure development in most countries in Sub Saharan Africa (SSA) is lower than that of other regions of the world; making it the lead impediment to agricultural productivity and scaling up yields.
The FOA noted that over the past 20 years, value-added per capita in agriculture has risen by less than 1 percent annually. It is estimated that Nigeria has lost $10 billion in annual export opportunity from groundnut, palm oil, cocoa and cotton alone due to continuous decline in the production and value addition to these commodities.
The rural farmers who accounts for the bulk of output, have continually faced difficulties in accessing input and output markets due to insufficient and poor quality rural infrastructure.
Agricultural infrastructure comprises a wide range of public services that facilitate production, procurement, processing, preservation and trade.
In Nigeria, transport cost account for a large share of retail price of goods. Farmers have limited access to reliable road connectivity, transport, storage, processing, and preservation all of which results to massive post-harvest losses.
Efficient transport and logistics service foster economic and social opportunities as well as gains with multiplier effects such as increased regional and international market access.
In today’s global economy, economic opportunities are linked to the mobility of goods, people, information, services, and investment; emphasizing the need for increased access to adequate, quality and efficient soft and hard infrastructure.
Strong institutions in Agricultural research, technology, information & communication services, financial services, implementable and deliberate government policies are necessary requirements to increase productivity and increase value in the sector.
