Cassava has also been found to be a huge foreign exchange earner; China buys lots of cassava chips and pellets from Thailand and more recently Nigeria. Nigeria is the world’s largest producer of cassava. The new policy stating that companies must add 10 percent cassava flour to all wheat flour has also made it more lucrative locally.
The good news is that the current administration realizes that the development of the agriculture sector is important to the economy. For starters, the government has indicated it will focus on rice production. Between January 2012 and June 2015, Nigeria spent $2.41 billon importing rice. Imagine half of that going into the hands of our local farmers. The president stated recently that about N1 trillion is spent on importing food yearly and added that this was unsustainable; he is right.
Apart from providing food for local consumption, agribusiness remains a platform for effective job creation, wealth creation and leapfrogging our economy. For Nigeria to truly develop, it must be efficient and competitive in its area of comparative advantage. Our area of comparative advantage is agriculture. Unfortunately, we are not efficient in it. We are yet to maximize our potential in this sector.
The sector is fraught with many challenges chief among which is funding. The former CBN governor, Lamido Sanusi, stated that the annual demand for agribusiness financing over the next 40 years is about $6.5 billion per annum. That’s a huge financing gap. Other challenges are lack of access to basic farming inputs, like seedlings, fertilizers, resource scarcity, technology and infrastructure inadequacies.
There are countries and states that have become self-sufficient in food or have jumpstarted their economy with agriculture. One of such is Turkey, a country with similar weather and arable land like us, where agriculture is still their mainstay. It’s one of the few self-sufficient countries in the world in terms of food. 76 percent of its total agricultural production is vegetable products. Based on recent statistics, it’s the world’s biggest producer of hazelnuts, figs, apricots and raisins, 6th biggest producer of tobacco, 8th biggest producer of wheat and the 10th producer of cotton.
Saskatchewan, a province in Canada, has become an international player in agribusiness. The province is a world leader in all the crops it cultivates. In 2014 the province exported almost $14 billion in agricultural products cementing its position as Canada’s top agri-food exporting province. Today China is the largest importer of Saskatchewan’s peas.
This did not come easy; the government of Saskatchewan did its part to create a competitive environment for the companies to thrive, working with the industry to remove red tape and initiating new incentive programmes to help agribusinesses. Now this can be replicated in most states in Nigeria, making them economically viable as well as putting money in the hands of farmers.
Ethiopia is another great example. It has witnessed rapid economic growth in the last 10 years with real GDP growth averaging 10.9 percent. This growth is lifting the country from being the second poorest in the world in 2000 to becoming a middle income country by 2025, if the current growth is sustained. According to a new report, services and agriculture were the main contributors to this accelerated growth. Initially, agriculture was the main contributor but aided by a construction boom, the services sector has taken over.
To get to where it is today, Ethiopia implemented various reform policies as well as massive infrastructure investments. Turkey’s agricultural strategy included the establishment of a farmer’s registry system where farmers enrolled for direct income support from government. Chemical fertilizer support, diesel fuel support as well as training for new agricultural techniques are also done directly through the registry.
With the right polices and political will, Nigeria and Nigerians can become great through agribusiness. For this to be achieved, agribusiness financing and training must become an integral part of the government’s economic policy.
All relevant agencies and institutions – the Bank of Industry (BOI), Nigerian Export Import Bank (Nexim), Bank of Agriculture (BOA), CBN, Nigerian Investment Promotion Council (NIPC), Nigerian Export Promotion Council (NEPC), federal and state Ministries of Agriculture, commercial banks, microfinance banks (MFBs) and other stakeholders – should as a matter of urgency come up with a truly practical and workable solution to our agriculture development. Top on this should be innovative financing and funding solutions for agribusiness. They should also work in collaboration with relevant international agencies like the International Finance Corporation (IFC), International Fund for Agricultural Development (IFAD), African Development Bank (AfDB) and the Afrexim Bank.
They should come up with a framework that affects the farmers directly as well as encourage the teeming youth to start engaging in agribusiness. This will be a great start.
When this happens, then the declaration by the president of the AfDB, Akinwunmi Adesina, that Africa’s future billionaires and millionaires will make their money from agriculture may be on its way to fruition.
Olajide Olutuyi writes from Calgary, Alberta.
