Nigeria Economic Sustainability Plan: Agriculture!

‘ This venture will improve the Naira’s value, generate foreign revenue and bring about financial inclusion. Not to mention employment generation and economic empowerment especially for the women and the poor. It will provide the required stimulus for the muchtalked agricultural revolution

In the recently released Nigeria Economic Sustainability Plan, Agriculture was most interestingly named as the first key project that will be used to stimulate and sustain our economy. According to the report, it will be through “A Massive Agricultural Programme, that is expected to bring between 20,000 and 100,000 hectares of new farmland under cultivation in every state of the Federation. The aim is to create millions of jobs opportunities, directly and indirectly, over a 12-month period. A significant number of Nigerians will be incentivised to engage in farming and agro-processing, as that is a field in which Nigeria has a comparative advantage”.

While there is no doubt that agriculture is an area of our comparative advantage, what is in doubt is the seriousness of federal, state and local governments to patriotically pursue the immense direct and indirect growth opportunities we have in our agricultural sector. Sustaining the doubt is the way the flaunted importance of Agriculture normally dies down once our precarious economic situation improves. The most recent evidence is the limited agricultural achievement since the 2016 recession.

As it is very clear that we are in a very serious socio-economic situation, it is expected that we should pursue the touted Agricultural revolution with the seriousness it deserves. In the Economic Sustainability Plan, more details and focus are required. For instance, it will be important to properly identify and map out what will be cultivated in the planned 20, 000 to 100,000 hectares of land per state. In 2018, Indonesia made about about $23 billion from just two economic trees- coconut and palm trees.

To address the short-medium term revenue impacts, the focus for this agricultural season should be on crops with three – six months gestation period. Crops like maize, yam, cassava, sweet potatoes, beans, and others fall into this category. In a recent study on the business opportunities of some of these crops, it was noted that the gaps between demand and supply are huge. For instance, while the gap in the demand and supply of Garri in a year is over N430 billion, for Maize flour processing, it is about N240 billion. While the Netherlands makes about N285 billion from potatoes every year, the 2020 total budget of Plateau state is about N172 billion. In the same vein, Germany and Spain exported pork meat worth about $4.4 billion and $4 billion respectively in 2018.

Another way through which Agriculture can be used to diversify the economy is a strategy to supply food products consumed by Nigerians in the Diaspora. It will also provide short to long term foreign revenue in addition to jobs and other positive spillover benefits. The main reason why the foods that are in very high demand are not sourced from Nigeria is the lack of internationally accepted packaging centres in Nigeria. This is a challenge which the government can quickly address and which I had earlier asked the banks to provide possibly as part of their Corporate Social Responsibility. With about 15 million Nigerians in the Diaspora, it is a business with a potential annual revenue of over $81 billion (about N31 trillion).

A brief illustration will be helpful. A food expenditure of about $15 by each of the 15 million Nigerians in the Diaspora translates to about $225 million every day and about $81 billion every year. As only a very small quantity of the foods consumed by Nigerians in the Diaspora are sourced from Nigeria, the above is sadly the amount of money that Nigerians in the Diaspora send to other countries especially in South America and Asia every year. To further illustrate, the UK imports plantains and bananas from Argentina, Ecuador and Uruguay. However, the flight time between these countries and the UK is about 14 hours compared to six hours from Nigeria. As the limited food products supplied from Nigeria are inadequate to meet demand, they are very expensive.

So, this is a big opportunity for Nigeria to generate revenue. The benefits are endless! Nigerians will always prefer foods imported from the homeland so there will be little or no competition especially if these are sold at slightly lower prices compared to the products from Asia/south America. As a major problem is the absence of packaging centres that meet international standards, the government can immediately invest in this vital area by establishing packaging centres in major cities in Nigeria. To ensure prompt take-off and success, distribution centres in major European and American cities will be needed to ensure efficient distribution to all other cities with significant Nigerian/afro-caribbean populations.

This venture will improve the Naira’s value, generate foreign revenue and bring about financial inclusion. Not to mention employment generation and economic empowerment especially for the women and the poor. It will provide the required stimulus for the much-talked agricultural revolution. Not only will it lead to better revenue for Ozor Umahi of Abakaliki, it will also increase his lifespan due to the psychological satisfaction that his yams are sold and consumed in London and America (Obodo oyibo!). It will help Ohttom of Vandekiya village of Benue State to train her kids through the export of mangoes that are in abundance and wasting in her village.

Alhaji Abdulahi from Fagge in Kano State will live in peace with Joshua in Jos as they are both involved in the export of carrots and groundnuts to Canada. Gbadamosi will prefer to live in Ogbomosho than in Lagos due to his Amala processing plant which provides him with good income. With the above and the foreign revenue that will be generated, the agricultural revolution will be in auto pilot, requiring little or no push from the governments for youths to get involved. As our 2020 budget is about N10.8 trillion, imagine the yearly impact of N31 trillion on the economy especially the poor and less privileged Nigerians!

Dr. Ngwu, is an Economist/associate Professor of Strategy, Risk Management & Corporate Governance, Lagos Business School and a Member, Expert Network, World Economic Forum. E-mail- fngwu@ lbs.edu.ng