The economic diversification drive anchored on repositioning the non-oil sector through the development of agriculture is one policy experts and stakeholders agree has been effective in boosting robust participation in the sector in the first four years of President Muhammadu Buhari.
With the government flashing messages that oil revenue would not continue to be reliable for desired sustainability, agriculture has gained traction among corporate and individual entities who have picked on different value chains to extract value.
A higher number of Nigeria’s farming population has been active in farming via the widening of financial window facilitated by government’s signature scheme, the Anchor Borrowers’ Programme. Even while it is not near self-sufficiency yet, Nigeria has now been touted as the largest producer of rice in Africa in a latest overtake of Egypt.
Also, through proxy farming concepts introduced by agric-tech platforms, more farmers have had access to investments from individuals with idle funds, while the international community has also signalled interest in Nigeria’s agric business space with MoUs signed to commence investment.
These are the little wins that experts and stakeholder want President Buhari to consolidate on in the next four years so that underlying issues besetting self-sustaining production capacity are addressed holistically.
Taiwo Olaniran, associate director and agric-business lead, PwC Nigeria, who commended the continuity of the Agricultural Transformation Agenda of former President Goodluck Jonathan’s administration under the Agricultural Promotion Policy (2016 to 2020), said the government needs to pursue the APP more vigorously with a view to correcting the defects.
“The government needs to do a thorough assessment of the APP to determine how far we have gone to achieve the set-out policy. And for areas where we have not made progress as expected, we need to examine what went wrong. We need to come up with action plan to remediate those areas with setbacks,” he told BusinessDay in an exclusive interview.
The quest for an agricultural sector that can conveniently vie with oil in terms of revenue generation, Olaniran said, will only be feasible with increased budgetary allocations to facilitate the provision of infrastructure and following through on friendly agric policies that boost investment confidence.
He placed a primary stress on the need to tighten policies that discourage importation of commodities that Nigeria has comparative advantage to produce, citing the unbridled smuggling of rice as an issue that will continue to mar production efforts.
“Increasing budgetary allocation should not be just about money on the paper,” Olaniran explained.
“It is ensuring we bring money down to build agricultural-related infrastructures that will jumpstart the whole ecosystem such that people will be able to tap into the opportunities available in agriculture and begin to create positive effects on the economy, whether in terms of revenue generation for people in the value chain, employment, export opportunities or empowerment of farmers,” he added.
Agriculture in Nigeria still suffers from dearth of infrastructure, input supply, quality seedlings, poor storage facilities, structured market linkage and uncompetitive pricing, among others.
Critical among these issues is the poor yield of crops per hectare, arising from poor access to improved seedlings and the low rate of mechanisation.
While developed countries produce more on little stretch of land, Nigeria continues to rely on the wideness of the area of cultivation to achieve more, which remains weak at addressing demand.
The UK and Netherlands can boast of tomato yield per hectare that is approximately between 400 and 500 tonnes when Nigeria still struggles with just 4 tonnes. Due to this, locally-produced crops lose competitive power to imported variants, which come cheaper for industrial consumers.
The industrial sector, especially food and beverages, utilised 20 percent or 1.3 million metric tonnes of sorghum as raw materials in 2015, according to a Nigerian Breweries (NB) plc report.
NB currently sources 43 percent of its raw materials locally, with a target of 60 percent local sourcing of malting grains as part of its local content strategy.
Guinness Nigeria plc has also been committed to raising the use of its locally-sourced raw materials – sorghum and maize – from 43 to 87 percent.
Malting grains, including barley sorghum and maize, account for 40 percent while sorghum constitutes 7 percent of raw materials amongst major beer-makers.
Due to local content strategy, a 5 percent import duty is imposed on barley importation. Imported barley, however, still makes up 50 percent of consumption among brewers in Nigeria.
This is majorly because prices as well as quality of local produce still remain uncompetitive for producers, as off-take successes are achieved mostly on government’s promises of tax reduction.
Experts believe the problems of production cost need to be addressed alongside production volume for competitiveness, noting that relying on charity-buying from industrial consumers may not be sustainable.
“In almost every produce, we are getting the least tonnes compared to any other country. So, if government is serious about making sure that industries are not buying from our farmers as a sort of CSR, then they have to incentivise the sector such that agric inputs are made available with seedlings of higher breed, then give them the capacity to buy them through financing cooperatives,” Sanni Dangote, president, Nigeria Agric-Business Group (NABG), told BusinessDay.
“Once we have higher yields and availability, our price will be so competitive that our industries will also, but that will not happen if we first do not force that on ourselves,” he said.
Babafemi Oke, chairman, All Farmers Association of Nigeria (AFAN), Lagos chapter, believes the Anchor Borrowers’ Programme is laudable but still needs to be extended to crops other than rice to achieve overarching results.
The farmer, who complained about the low budgetary allocation, said significant shift in agriculture may remain a dream if poor attitude to investment continues.
“From what we have seen from the budget so far, it has not yet improved. We can’t be satisfied. We don’t think more can be done with that for the whole country in the area of agriculture. We still want it to be jacked up,” Oke said.
Jacquelyne Yawa, Guinness Nigeria’s head of agribusiness, said that grant giving in agriculture must end to contain the culture of reliance and for farmers to treat activities as business.
Supportive efforts must focus on capacity building, training of agronomists as well as backing extension agents, she told BusinessDay.
“We don’t need aid. We need investments. We need roads and small silos,” she said.