The Chief Executive, Agricultural and Rural Management Training Institute (ARMTI), Dr Olufemi Oladunni, sees export at the forefront of the nation’s improved foreign exchange. He supports discussions focused on maintaining Nigeria’s competitiveness within the global trade and export finance market. He shares his thoughts with DANIEL ESSIET
How can the nation’s agriculture sector take advantage of the US-China tensions?
United States in particular, is a market of great interest and opportunity for many Nigerian exporters. From the strong historical ties to the current and future opportunities, there definitely is lots of focus on that part of the world from Africa. If the current trade conflict continues, both countries will eventually look out for new trade partners. That therefore, offers a great market opportunity to the agricultural sector of the rest of the world (including Nigeria) in both countries. To compete at that level however, the nation’s agricultural sector needs to be more productive and meet set international standards.
In which export markets do you see the strongest demand for Nigeria’s agro products?
Nigeria’s agricultural products will do well in almost every export destination in as much as set standards are adhered to and the products are competitive in terms of price. Meanwhile, countries that host large population of Africans and Nigerians are most likely to have the highest demand for Nigeria’s agro products. Most agro companies remain solely focused on their domestic market, despite expanding global opportunities and a national campaign to promote exporting. As a result of this unrealised potential, these businesses forgo greater profitability, diversification, and other competitive advantages derived from engaging internationally. We lose a primary source of sustainable, high-wage job creation and economic growth. Our exporters have to undertake international market assessments to identify needs and opportunities. They then applied that intelligence to take actions that would generate the greatest return in helping their businesses increase exporting. Export is key to boosting foreign earning, so we need to focus on agro exports. Whether big or small businesses, the leadership should seek to increase revenues and employment and promote overall economic competitiveness, they must adapt to rapidly changing global realities that are shifting the focus of demand for Nigerian produced goods and services. Our biggest exports to the world, in volume terms, are products such as agri-foods.
Do you see Africa Continental Trade Agreement providing an opportunity for Nigerian food products to expand into the continental economy?
Yes, it does provide market opportunity for the Nigerian food products. Beyond that however, the perceived ‘chronic oversupply’ of food in Nigeria is only a periodic thing. This happens only at the harvest season of each commodity. The huge supply at the harvest of each commodity is not an all-year run thing because of poor/ low efficiency in the post-harvest handling of food commodities in Nigeria. To take advantage of the opportunities that the Africa Continental Trade Agreement presents, Nigerian agricultural sector needs to improve in value addition to food commodities and ensure strict adherence to global and regional food safety standards. I believe there are a lot of local firms with proven capacity for success in exporting a range of goods and services, but they underachieve as a whole. The continental trade agreement will provide an opportunity for Nigerian food products to expand into Africa.
Do Nigerian products have satisfactory access to international markets, particularly in Europe?
No. This is due to a number of factors including: low productivity, non-competitive pricing, and non-adherence to food safety regulations often leading to rejections. There should be increased investment further along the value chain to enable the development of value-added products that are more internationally competitive and respond to consumer demand. For exporters to Europe, the presence of pathogenic micro-organisms remains the single most notified food safety issue. We need to address issues such as chemical contaminants, mycotoxins and pesticide residues. We need to strengthening the capacities to meet international food safety requirements and in infrastructure to provide an enabling environment for value chain development. Ultimately, increased public expenditure in agriculture and agricultural research is needed to improve productivity and build the resilience of the agricultural sector so that producers are better prepared to meet international trade requirements.
What measures should be put in place to boost the market competitiveness of Nigerian agricultural exports?
The government and the private sector have made concerted efforts to keep trade volumes on a consistent upwards trajectory over the past decade. However, the country remains in trade deficit in some fronts with exports faltering in recent years as a result of external challenges such as low global commodity prices. The Government is explicitly targeting increased foreign direct investment (FDI) inflows, deploying a multi-pronged strategy to attract new investment. Measures include a wide-reaching tax reform programme, easing restrictions on FDI across several sectors. But we need to do more to boost agro exports.
Government should work with the private sector to help stimulate innovation for sustainable agri-food systems and produce better and safer food while preserving natural resources and biodiversity. Our growth will be propelled by prioritisation of agriculture as a key contributor to development and the fast-paced adoption of new technologies to boost the sector. But we have not seen growth in irrigation. We have to harness technology to expand irrigation to farmers who traditionally relied on rainfall to water their crops. This will boost productivity and income for farmers by helping them extend the growing season and become more consistent in their production.
One of the drivers of growth in the agricultural sector will be the expansion of irrigation. The area under irrigation has not increased significantly for a long time. Farmers need access to quality input, irrigation facilities, farm and processing machineries, functional infrastructure, including power, dam, roads and strict adherence to set global food export standards. It is time for Nigeria to become a strong exporter of food products.
How do you account for the lack of processing of agricultural raw materials on the spot in Nigeria?
Food processing has a huge potential to unlock economic growth. We have capacities to process meats, confectionary, canned fruits, vegetables, dairy products, noodles, bread, and other baked goods. While we domestically produce poultry, pork, and eggs we need for food manufacturing industry, we still smuggle poultry. The vast majority of dairy products are also imported. There is need to use the sub sector to help the industry accelerate progress towards food security and improved nutrition. We can be competitive and businesses flourish in the current ecosystem if investments are focused on acquiring processing machineries. The machines are costly. The processing industry face infrastructure challenges, such as power, water supply and roads. There is the issue of epileptic power supply, high cost of raw materials due to low productivity at the production level, inadequate technical know-how/ skills, short supply of low cost simple technology processing machineries, non-competitive product pricing compared with commodities traded internationally.
What challenges does the limited availability of water present to agricultural producers?
Enormous. It has largely limited agriculture in Nigeria to a rain-fed activity. Farmers therefore, have more idle time during the dry season. This brings about negative impacts/ outcomes on the productivity, competitiveness and overall profitability of the sector. Water resource management is a challenge for the sector. Nigeria relies on rain-fed land for 80 percent of its agricultural needs.
In what way is agricultural development crucial to the achievement of the SDGs?
The Sustainable Development Goals (SDGs) are a collection of 17 global goals set by the United Nations General Assembly in 2015 for the year 2030. The SDGs are part of Resolution 70/1 of the United Nations General Assembly, the 2030 Agenda. SDGs goals are: No Poverty. Zero Hunger. Agricultural development is a critical nexus to the achievement of a good number of the SDGs. Agricultural development is a sound strategy to combat poverty (Goal 1), eradicate hunger (Goal 2), ensure good health and well-being (Goal 3), promote industrial growth (Goal 9), reduce inequality (Goal 10), etc. The challenges to feed Nigerians sustainably are huge. With the Sustainable Development Goals, Nigeria and the rest of the global community has adopted a compelling vision with ambitious goals. I believe we need to reshape agriculture and food system to better feed Nigerians and deliver sustainable development.
In your opinion, what are the main obstacles for rural development policy?
There are many obstacles at different levels. The challenges of addressing rural poverty, whilst also feeding a growing population are profound. These include poor social amenities and infrastructure, inadequate access to market, rural-urban migration, non-participatory approach to development, insecurity, lack of provision of public goods and disabling business environments. Access to finance is a main bottleneck for rural development. We need to provide incentives for people to live and prosper in rural areas. We not only need to ensure that food production is a stable and profitable occupation, but also that other income generating activities exist in rural areas. The rural people should have access to basic services, such as schools, education and health care among others.
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How can Nigeria’s agriculture sector be made more attractive to foreign investment?
The Nigeria’s agriculture sector has been growing at a steady pace. For us to facilitate a strong agricultural sector means investing in the infrastructure and creating predictable regulations. If this is fully utilised, farmers could meet the food needs of the country. We need to embrace pro-private sector policies such as offering tax incentives to new agribusinesses. Such measures will go some way to making agribusiness an attractive investment prospect, for foreign investors. What investors need is a guaranteed market by controlling importation of food commodities; easy access to land (including acquisition of certificate of occupancy); functional infrastructure (power, roads, water, etc.)
How’s infrastructure and logistics affecting the ability of growers to compete in terms of exports?
Whether, small or big farmers-those using two acres and more, they all need infrastructure to pack and grade their produce in line with market requirements. That is why the government and the stakeholders like us are calling for investment in logistics. Increasing efficiency in logistics will make it easier for farmers and producers to access both local and international markets. It is costly right now because of wasted time and cost markups at each step along the way .This makes our produce uncompetitive by the time it reaches its destination. Poor infrastructure and logistics have largely limited the productivity of producers. These have increased percentage of post-harvest loss and impeded producers’ access to more profitable markets. Hence, they cannot compete favorably in the international market.
What recommendations would you make to policymakers in order to fully exploit agricultural resources?
The government and the private sector must work together to create stronger value chains in agribusiness. Stakeholders need funding to increase the scale of the entire value chain.
To achieve this will require funding the development of infrastructure, power, roads, and irrigation facilities among others. The other thing is to ensure the local market is protected from being used as a dumping ground for agricultural products from more developed economies. Our population is on the up. More people will need feeding. The agricultural industry is looking for researchers to drive growth in productivity. This will require increased funding for research to make the industry ready for the future. We must do everything to assist local producers to meet up with the requirements/standard of the export market.
Could you summarise the main work of the Institute?
ARMTI provides management training, consultancy and advisory services. The Institute also conducts applied management research, special and diagnostic studies; and disseminates management information. Overall, the Institute contributes to policy development which will enhance better management of the nation’s agricultural and rural sector.
Source: The Nation Online