The Nigerian government has yet to maximise the potential of the agricultural sector, which provides employment for 70 percent of the country’s population and contributes significantly to the GDP.
Despite the enormous potential in the sector, Nigeria is yet to leverage its opportunities to drive sustainable growth and development.
With only 44 percent of the total 79 million hectares of agricultural land being cultivated, the country is currently faced with inadequate food production, which led to the importation of N1.9 trillion worth of food in 2022.
A weak farming sector is a threat to the government’s food security agenda, as the country struggles to meet the nutritional needs of its growing population, experts say.
“A weak farming sector is a threat to the nation’s economic growth as agriculture’s decline contributes to unemployment and a decrease in rural incomes. This, in turn, can lead to social unrest and political instability,” Uchenna Daniel of Green Grain Nigeria Company told BusinessDay.
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He said a weak agricultural sector will impact the government’s ability to generate the much-needed foreign exchange in the country.
“As we have seen in recent times, Nigerian foods were rejected in foreign countries. This is because our farming system is weak, and our farmers do not follow the right procedures for producing food. No one is teaching them what to do and what not to do,” he said.
“But if we can produce quality foods that are healthy for consumption as well as exports, with the government establishing trade agreements to facilitate the export of agricultural products to other countries, the country will have more foreign exchange,” he added.
He noted that the weak farming system may further worsen the poverty levels of Nigerians as many rural communities depend on agriculture for their livelihoods.
Daniel said: “A decline in the agriculture sector can lead to increased poverty and migration from rural to urban areas, putting pressure on urban infrastructure and services.
“Agriculture is also very important to some industries, such as agribusiness, food processing, and transportation. A weak agriculture sector can affect these related industries, which will eventually impact the overall economic stability.”
Since the COVID-19 pandemic, Nigeria, which depends largely on crude oil proceeds, has been riddled with weak foreign inflows, resulting in a liquidity challenge in the country’s FX market.
The recent reforms by President Bola Tinubu’s administration have worsened the country’s FX challenges. As of November 22, the naira-dollar exchange rate closed at N1,145/$1 on Tuesday at the parallel market.
Africa’s biggest economy depends heavily on imports for almost everything, and this has continued to put pressure on the country’s exchange rate as importers would need dollars to import.
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The Tinubu-led government needs to boost the country’s agricultural exports to earn the much-needed FX amid an acute shortfall to diversify the economy.
The country’s agricultural position and potential put it in a strong competitive advantage that can be tapped for astounding economic impact and revenue diversification, especially through value addition.
Ensuring food security in Nigeria would require a deliberate effort because many factors have affected the agriculture sector, especially food production in recent years, experts say.
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“The Tinubu-led government cannot afford to have a failing agricultural sector. We can’t rely on oil for our FX revenue anymore; so we must make our agriculture work,” AfricanFarmer Mogaji, CEO of X-ray Consulting, said in a response to questions.
“Agriculture has the potential to be the country’s major FX earners as it was in the 60’s and 70’s. All the government needs to do is to address issues limiting productivity and value addition, while providing the enabling environment for agribusinesses to thrive,” he said.
