Economy

Growing National Sufficiency With Investment Funds

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It seems the Nigeria government has eventually realised that it must effectively reduce the current overreliance on foreign products, and reduce the outflow of funds if it must squeeze itself out of recession.

This must have led to the creation of various initiatives and programs, mostly focused on the agricultural sector in order to boost the economy. The investment funds are also designed to improve small scale manufacturing, and enhance food production.

In September 2020, the FG disclosed its intention to partner with the Food and Agricultural Organization of the United Nations (FAO). The partnership with the FAO which will 20 other countries seeks to boost agricultural transformation and sustainable rural development in the participating countries. The FG hopes to garner insights into new and evolving developments in Agriculture. It also hopes to partner with leading countries in agriculture to gain expertise in the chain of the agricultural business.  

Meanwhile, the FG has launched a myriad of programmes targeting specially the agricultural sector. The programmes include the National Economic and Sustainability Plan, and the Presidential Fertilizer Initiative (PFI). The former, as part of its goal wants to create new opportunities of cultivating about 20,000 to 100,000 hectares of farmlands quarterly, while the latter is investing N114 billion to improve the quality of fertilizers. The projects also caters for the establishment of start-up livestock farmers through the $200 Million World Bank Livestock Productivity and Resilience Project (L-PRES). Given that commercial banks have long been weary of lending to farmers due to high volatility, the Nigerian government has also set up the Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL Plc). The establishment of NIRSAL PLC was designed to create 16,000 Agro Cooperatives on 4 million hectares of farmland.

Still under this campaign, the Nigerian government has also invested in the rice mill industry to gradually erode the buoyant presence of foreign and imported rice in the country. The government has activated partnerships with various associations to boost productivity. The Rice Farmers Association of Nigeria (RIFAN) is one of the large communes of rice farmers supported by the government through such partnerships. The nation recorded about 3.7 million tons of production in 2017. In January 2020, the Economic Confidential Survey noted that the prevalence of foreign and imported rice reduced from 70% to 37% in the country. The growth of local rice can be largely linked to the Anchor Borrowers Program (ABP) and the Agricultural Transformation Agenda (ATA) Programme which has attracted more participation in Kano state. This led to a high level of interest and participation in rice farming coupled with an increase in demand.

Kano State is rising to become the rice-milling hub of the nation. Abdullahi Ganduje, governor of the state, disclosed that before the border closure, rice was being cultivated twice a year. However, with the rising demand, the farmers have to create a three-year farming cycle.

 The agricultural initiatives have recorded a breakthrough both in the country and Africa. Nigeria moved from being the largest importer of rice to becoming the largest producer of rice in Africa in 2019. The average production volume has risen from 3million metric tons in 2017 to 8 million metric tons in 2019. Nigeria became the 14th largest producer of rice in the world, while China leads as the top producing country. Although demand exceeds supply in Nigeria, the government continues to invest in the sector to increase production.

 In June, Sabo Nanono, the Minister of Agriculture and Rural Development, announced that the FG has set aside N600 billion to assist farmers in six states. The fund will provide financial assistance to about 2.4 million farmers. This was to help farmers make use of modern technologies in rice and cash crop cultivation. The FG’s initiative was in partnership with the World Bank and six participating states. The states are Kano, Kaduna, Cross Rivers, Enugu, Lagos, and Kogi. Almost 100 farmers from six rice farmers groups took part in the program which was held in Gabasawa, Kano.

 Many private manufacturing companies, motivated by the huge efforts of the Nigerian government are also getting involved in projects that will deepen and diversify the Nigerian economy. Olam Group, an international agro firm, has invested $150 million in the establishment of Nigeria’s largest integrated animal feed mill in Kaduna and Kwara States. The group also invested in poultry breeding farms and day-old-chick (DOC) hatchery, integrated poultry, and fish feed mill. 

 Another company, Promasidor will be investing 5 million dollars in Ekiti State to restore the desolated Ikun Dairy Farm. This will be in collaboration with the state government. The dairy farm is expected to produce over 10,000 litres of milk per day. This will lead to the employment of over 1000 workers. The Federal Government also disclosed the new construction of a rice mill in Ado Ekiti.

 The various initiatives by the Federal Government have been lauded for contributing to the progress of the nation. However, some analysts fell it will only boost national consumption, without increasing the export capacity of the nation. Exportation of agricultural produce remains minimal. Experts noted that the nation has the potential to boost its export GDP through the agricultural sector. Afioluwa Mogaji, Chairman, Agriculture, and Agro-Allied Group, LCCI, stated that ‘we are still heavily focused on the old syllabus; we are still focusing on commercial agriculture as against commercial production. He added that ‘there is a difference between commercial agriculture and commercial production; what is being sold to the government and others is commercial agriculture.’ 

 Agriculture contributed about 21.91 percent to Nigeria’s local economic growth in 2019. Although Agricultural export in 2019 was as low as 9.9 percent, it remained a powerful decimal within Nigeria. Prof. Shehu Garki Ado disclosed that the potentials for agriculture as an alternative source of foreign exchange is ‘obvious’ as it contributes more to the GDP in real terms than oil.

  Nigeria has the potential to become the hub of agricultural exports in Africa and the world. The COVID-19 pandemic has created shocks and lessons for nations who rely on a mono-economy. The nation, therefore, needs to diversify its export production by making sure that our agricultural products meet global standards, while it uses its international partnerships and its governance policies to create a seamless export system for farmers in the country. This will immensely boost an economy that has solely depended on oil for decades.

Peace Omenka

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Categories: Economy

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