The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) has begun advocacy for the operationalization of a Secured Agricultural Commodity Transport & Storage Corridor (SATS-C) which is expected to combat post-harvest losses, create jobs, and boost the contribution of the Agriculture Sector to Nigeria’s Gross Domestic Product (GDP).
This comes as concerns heighten on the continued border closure, which experts say is rather hurting the overstretched economy.
Speaking at a meeting on the development of SATS-C in Abuja, Aliyu Abdulhameed, NIRSAL’s Managing Director/CEO, said the new initiative is to address the supply-side and trade-related constraints of agricultural commodities in the country by facilitating the movement of goods safely from the primary source to the domestic consumer, Industries, and Export market.
Abdulhameed believes that a fully operational SATS-C which is currently a policy document being prepared for executive consideration by the Federal Ministry of Industry, Trade, and Investment (FMITI) can directly lead to a 5% increase in the agriculture sector’s contribution to national GDP by halving annual post-harvest losses of $12 Billion.
Further benefits, he noted, lie in the lowering of food prices, creation of 125,600 direct and indirect jobs, and the heightened possibility of adhering to standards for improved access to export, industrial, and consumer markets.
“I am confident that the implementation of the SATS-C policy will provide benefits which include but not limited to strengthening the agricultural supply chain to drive an agro-industrial renaissance; facilitating the emergence of a functional supply chain system and commodity exchange; ensuring that a single Secured Commodity Aggregation Zones (SCAZ) of a 100,000mt annual capacity will create 25,600 direct jobs, 100,000 indirect jobs and save about the US $37 million in foreign exchange due to an improved supply chain system.
“It will also create the necessary platform to support various agricultural commodity-focused intervention; introduce standards for agricultural commodities for export, industrial and consumer markets; increase efficiency in commodity handling, leading to a reduction in haulage cost; as well as reduce post-harvest losses,” Abdulhameed listed among other benefits.
He said this is critical as it will enhance our capacity to improve on the implementation status of the WTO Trade Facilitation Agreement in which Nigeria has only achieved 18.9%.
At the meeting, Doyin Salami, Chairman of the federal government Economic Advisory Council said that border closure is not sustainable and that government must take steps to reduce the costs of production to ensure competitiveness.
He said without competitiveness, Nigeria will lose out on the implementation of the Africa Continental Free Trade Agreement (ACFTA) and become a dumping ground for goods from other African countries.
His words, “It is important to bear in mind this issue of ACFTA and the reason is very simple – upside and downside.
“The upside is the access to a larger market and that is only available if we, as a country, are prepared. As I am looking at it, Nigeria needs to be careful. If we are not careful, our output may even diminish on the back of ACFTA.
“Why? Because other countries with better and lower production costs will take advantage of our market which will become a disincentive to our farming community. Shutting borders does work to a point but it is not a long-term sustainable venture. Routes to market and infrastructure that drive trade are very important.”
He said it is worrisome that agriculture accounts for more than 20 percent of the GDP, with more than 30 percent of the population engaged in the sector, but that only a small percentage had access to the market.
According to him, “Opportunities are there but the structural challenges are where we need to pay attention. Our export of agriculture produce is very small compared to our import”, making the nation a bet importer.”
