Nigeria is a mono product frontier economy where crude oil accounts for 80 percent of foreign exchange earnings.
But for several decades, long before it gained independence in 1960 and discovered oil in commercial quantities, agriculture was the major revenue and foreign exchange earner for the country, providing millions of jobs.
The oil boom of the 1970s led to the neglect of agriculture, which was once the mainstay of the economy.
However, since the collapse of global oil prices at the international market which plunged the Nigerian economy into its first recession in 25 years in 2016, there has been a renewed focus on the agricultural sector as the country attempts to diversify its economy away from oil.
Experts say Nigeria can survive without oil and move from being a mono-product economy if the right policies and actions are taken to boost agriculture and revive its glory days.
Nigeria’s agricultural fundamentals remain robust and include an estimated 84 million hectares of arable land, out of which only 40 percent is cultivated with only zero percent cultivated optimally.
Two of Africa’s largest rivers (Niger and Benue) flow through and within the borders of the country. There is adequate annual rainfall, a large young workforce, and over 200 million consumers that offer a domestic market to support increased food production and processing.
The country is among the top growers in various crops such as yam, cashew, palm oil, cocoa beans, pineapple, and sorghum.
But despite these potential in agriculture, the sector is yet to play a key role in the country’s quest for economic and revenue diversification.
Africa’s most populous country is still falling short of its non-oil export owing to low agro processing and lack of competitiveness.
Nigeria exported over 30 agricultural products valued at N560.6 billion ($1.12 billion) in the first half of 2023, according to data from the National Bureau of Statistics.
Brazil, a country whose population is just nine million larger than Nigeria, and with similar agricultural potential, earned $1.4 billion from sugar alone in June 2023, according to data from the Observatory of Economic Complexity.
The South American country’s one month sugar export is $28 million higher than Nigeria’s earnings from its total agricultural export in six months. About 1.2 million Brazilians work in sugarcane plantations, and this number triples when the processing and refining segments are considered.
Brazil earns so much from sugar and this is partly owing to value addition. Its success in making its agriculture market-oriented and earning trillions of dollars holds many lessons for Nigeria in diversifying its revenue through the sector.
Ikechukwu Kelikume, director of agribusiness at the Lagos Business School, at the July BusinessDay 2023 AgreX Summit, said the greatest opportunities in boosting foreign exchange earnings through the agricultural sector lies in processing.
He noted that the higher the value chain that is closer to the consumer, the greater the revenue to be earned. “Most of the things we export raw, we virtually import them back as finished products,” he said, adding that it has made the country unable to get value for its export.
Also, low technology use, ineffective credit model, worsening insecurity, low farm yield and lack of competitiveness in the agricultural sector, among others, are hampering the country’s quest to fast-track economic diversification through the sector.
Experts say Nigeria is yet to record any improvement in its agriculture after its discovery of oil because key issues limiting production remain largely unsolved.
Critical infrastructures such as motorable rural roads and storage facilities are still absent in Nigeria’s food supply chain, thereby reducing farmers’ profit and negatively impacting their capacity to increase productivity.
“We must address lingering infrastructural challenges that have continued to hinder us from developing the agriculture that can create jobs and earn foreign exchange,” said Kola Adebayo, a professor at the Federal University of Agriculture, Abeokuta.
The shortages in food production have made the country dependent on food imports. Nigeria’s food imports hit N926.25 billion in the first half of 2023, an amount which surpasses the total exports for the period (N560.6bn) by N365.8 billion.
“Imports are surging despite continuous government support. We still cannot grow enough to feed ourselves,” AfricanFarmerMogaji, CEO of X-ray Consulting, told BusinessDay.