Kaye Whiteman
Agriculture and solid minerals development hold the ace for reducing unemployment as has been the case before the advent of oil in 1956. Corruption and neglect have now rendered these sectors seemingly impotent to serve as the nation’s growth pole for economic diversification. This should not be the case. The potentials still remain immense and unscratched. At present only 31.2 million of 71.2million hectares (about 44%) of arable farmland is cultivated. In similar veins, the potentials in acquaculture, forestry and solid minerals remain largely untapped. Regrettably, about 80% of what we consume of some of these natural endowments particularly fish and solid minerals are imported. Imagine that the agricultural sector alone which still accounts for 41.84% of the country’s GDP and employs approximately 70% of total labour force mostly producing at a subsistence level is given needed boost through mechanization. At least one will expect that additional twenty percentage points will be added to the employed.
Basic statistics shows that groundnut production stands at 180,000 tons against 300,000 tons produced 25years ago. Current fish production is about 505.8 metric tons, while poultry output equal 18million birds from a high of 40 million birds in 1985. Timber totalled 70million cubic meters for round wood and 2million cubic meters for sawn wood. Compared to agriculture, solid minerals played a leading role in sustaining the Nigerian economy before the discovery of oil and gas. That is no longer the case. The sector contributed a meagre 0.38% to National output in 2009 and employs less than 10% of total labour force.
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Performance of the two sectors from 1960 – 2007, indicates a steady decline. From 75% of the GDP in mid 1960’s, combined sectoral contribution dropped to less than 50% of the GDP in mid 1990’s. Commercial exploration of oil/gas in the 1970’s scaled down government’s emphasis on the growth of the two sectors. Funding was, and remains a major problem for both the government and farmer investor as is seen in declining budget for agriculture.
Agriculture and solid mineral development are the easiest routes to Nigeria’s desired level of macroeconomic diversification. This is true for four primary reasons. The first is that the two sectors are large scale natural endowments that confer automatic economic advantage to the country. The processing is easy and do not require sophisticated technology and to that extent permits the ease of entry of many willing participants. Thirdly, the two sectors are basically traditional and are in congruent with our current stage in developmental evolution which is not yet scientifically sophisticated. Fourthly with appropriate technology for variety improvements, preservation and favourable fiscal terms from the government the output of these sectors will most likely be highly valued and demanded in international markets.
Dwarfed by the contribution of oil to the nation’s GDP, the solid minerals sector has been characterized more by its economic potential than its ability to deliver tangible wealth in recent years. Nigeria’s solid minerals are in many cases a much underutilized national resource. A good example is iron ore. Although the country has an estimated 3 billion tonnes of iron ore deposits, the country supports only a modest domestic iron and steel industry. The domestic mining industry is underdeveloped leading to Nigeria having to import minerals that it could produce domestically. African countries such as South Africa and Guinea have developed extensively the processing of the iron ore locally. Mauritania has capitalized on extensive iron ore deposits present within its territories. Benefits from the deposits were immediate and have spurred the gross domestic product (GDP) in the last couple of years.
Nigerian agricultural exports are very minimal- about 0.2% of all exports. The main crops sent abroad are cocoa and rubber. In the early 1970s, production of cocoa in Africa was concentrated on countries such as Ghana, Nigeria and Cote d Ivoire. Current trends indicate that these countries have maintained their market shares of its production while Nigeria now contributes only a miserly 5% of world cocoa production while not much has been done to develop the commodity locally.
Nigeria spends close to $10billion on food importation annually. Imagine how much employment that 50% of this amount will generate if invested in agriculture and solid minerals development. Similarly, also imagine if half of the $1,255billion spent on the importation of iron and steel is invested in the power sector what impact it will have on the cost of doing business. The economic potentials of these resources provide growth and development. This can only be achieved with the exploration of these resources to their full potential thereby diversifying the economy.
In the face of dwindling revenue accruable to the country from crude oil sales, Nigeria must accelerate the rapid transformation of the agriculture and solid mineral sectors of the economy. To achieve this, Nigeria must accelerate the use of modern science and technology to integrate indigenous knowledge into unique development initiatives that would leverage the country’s advantage of solid minerals abundance and a favourable agro-clime. Innovations from this integration process will provide the country with the much needed improved methods and techniques for producing agro-products and minerals that are globally competitive, appropriately priced and one that meets global acceptability.
The challenge for the Nigerian government is to put in place supportive structures and framework that can drive this envisaged innovation-led transformation of the agriculture and solid minerals sectors, towards actualizing its desire to diversify the productive base of the economy. Government must fund research, mineral exploration and agricultural support activities, fund and initiate fabrication of local technologies, provide appropriate policy environment that would enhance private sector initiatives and participation.
