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The Buhari Legacy Series: Buhari boosts agric investments but old problems persist

The Buhari Legacy Series: Buhari’s boosts agric investments but old problems persist

In 2015, when Muhammadu Buhari took over power in Africa’s biggest economy, diversifying the Nigerian economy away from oil was a dominant theme in his conversations.

His government aimed at self-sufficiency in food production and increased foreign exchange earnings through agriculture.

The 2016 collapse of the global oil prices that plunged the Nigerian economy into recession further necessitated a renewed focus on the agricultural sector, which was once the main driver of the country’s economy before the discovery of crude oil.

Agriculture became an option for diversification owing to its vast potential that can drive more sustainable economic growth in Africa’s most populous nation in terms of job creation and revenue diversification.

As a result, the Buhari led-government devoted a lot of energy to revamping agriculture with initiatives such as the Anchor Borrowers Programme, Presidential Fertiliser Initiative, FX restriction for importers of some agro commodities, border closure policy and targets for the attainment of self-sufficiency in some major crops.

The initiatives created opportunities across the various value chains and spurred investments as farmers, millers, and agro-allied firms ramp up production to meet the ever-growing demand for food, experts say.

Investments into the sector have grown consistently at an annual average of 82 percent from 2016 to 2022, BusinessDay’s analysis of data from the National Bureau of Statistics shows.

The sector became attractive to youths as several young people began changing the narrative and image of farming in the country while initiating innovative solutions to address challenges.

However, there is still no significant impact of increased investments in the sector as the country still has a huge demand-supply gap in most of its staple foods, even as the population growth rate stands at 2.6 percent per annum, according to the World Bank.

It has led to a persistent rise in food imports since the administration took office.

In 2022 and 2021, the country imported N2 trillion worth of food products for the respective years, according to data from the country’s trade report.

In 2020, Nigeria imported N1.2 trillion worth of agricultural products, and in 2019, the country imported N959 billion worth of food.

It imported N857.6 billion and N886.8 billion worth of food products in 2018 and 2017 respectively.

Budgetary allocation to the sector has been abysmal in the percentage of the total budget during his administration.

In 2015, the Buhari-led government’s allocation to agriculture was 0.9 percent. Although this increased between 2016 and 2019, it was 1.26, 1.82, and 2.32 percent in 2016, 2017, and 2018 respectively.

The highest proportion of the national budget allocated to agriculture during his eight years tenure was 3.61 percent in 2019.

In 2020, it dropped to 1.51 percent. It increased in 2021 to 1.92 percent but dropped again to 1.25 percent in 2022.

However, the various percentages are still lower than the country’s highest of 5.41 and 5.38 percent in 2008 and 2009 during President Umaru Yar’Adua’s administration.

Experts say that Nigeria is yet to record any improvement in its agriculture since 2015 despite the increase in investments because key issues limiting production remain largely unsolved.

“The data is evidence that we still do not grow enough food and we are left with no option than to import,” said AfricanFarmerMogaji, former group head of agribusiness, Lagos Chamber of Commerce and Industry, said in a response to questions.

“Imports are surging despite continuous government support. I think it is time we start addressing lingering issues that are limiting productivity,” Mogaji said.

Critical infrastructures such as motorable rural roads and storage facilities, among others, are still absent in Nigeria’s food supply chain, hence reducing farmers’ profit and negatively impacting their capacity to increase productivity.

“Our food supply chain is not better prepared for any inevitable disruptions,” Victor Olowe, a professor and agronomist at the Institute of Food Security, Environmental Resources and Agricultural Research, told BusinessDay in 2022.

“There are no measures in place to address any urgent food crisis and long-term sustainability of the country’s food system,” Olowe said.

Nigeria is still one of the least mechanised farming countries in the world, with the country’s tractor density estimated at 0.27hp/hectare, which is far below the Food and Agriculture Organization (FAO) recommended tractor density of 1.5hp/hectare.

Also, the lack of access to adequate financing by farmers and other actors in the sector has remained a major impediment to agricultural growth.

As a result, yields have failed to increase significantly, leading to pervasive hunger and poverty.

Similarly, agro entrepreneurs seeking to build businesses that could boost food production have continued to remain at a subsistence level in the country.

“Funding is the biggest problem we have in Nigeria’s agriculture and we need it to put all the factors of production together to drive growth in the sector,” said Olorundenro.

“The interest rate on agricultural loans from money deposit banks in the country is unsustainable and no agribusiness can survive with it,” he said.

Apart from the impact of Boko Haram in the North-East, which has displaced thousands of agrarian communities, farming activities have also come under threat in the middle belt region and other regions in Nigeria due to conflicts between farmers and herdsmen during the Buhari led-government administration.

The recent attacks by herdsmen in Benue, Ondo, and Kaduna among others have impeded agricultural output in the affected states and market development.

“These crises have implications for the agricultural sector and employment generation. It is a major risk to the growth of the sector,” said Muda Yusuf, chief executive officer of the Centre for the Promotion of Private Enterprise.

Yield per hectare is low in Nigeria compared with other emerging economies.Nigeria’s yield per hectare for rice is 3.4, whereas it is 6.3 in Brazil, 3 in Ethiopia, 2.8 in South Africa, and 4.2 in Kenya, according to FAO.

Also, Nigeria has 6.4 yields per hectare for tomatoes, 71.9 in Brazil, 6.2 in Ethiopia, 75.5 in South Africa, and 21.2 in Kenya.

“We must address lingering infrastructural challenges that have continued to hinder us from developing the agriculture that can create jobs,” said Kola Adebayo, a professor at the Federal University of Agriculture, Abeokuta.

Read also: Buhari called subsidy fraud, but outspends predecessors

The annual income of farmers in Nigeria is $9,815, according to FAO, but this is lower than Brazil’s $11,472; Ethiopia’s $14,952, South Africa’s $20,193, but higher than Thailand’s $6,346.

Growth in the sector has been inconsistent all through the eight years. The sector recorded 1.8 percent growth in 2022, the lowest. In 2015, 16, 17, 18, 19, 20, and 21, the sector grew by 3.72 percent, 4.11 percent, 3.45 percent, 2.12 percent, 2.36 percent, 2.17 percent, and 2.13 percent respectively.

The various challenges have made food production in Nigeria insufficient to satisfy 200 million people.

Experts in the country have urged the incoming government to ensure addressing fundamental issues in the country to leverage the potential in the agricultural sector, diversify the economy and place it on the path of sustainable growth and development.