As Stakeholders Move To Reposition Agriculture As Mainstay Of Nigeria’s Economy


Agriculture which was the mainstay of Nigeria’s economy before the discovery of crude oil, from 1960 to 1969, accounted for an average of 57.0 percent of Gross Domestic Product (GDP) and generated 64.5 percent of export earnings. JULIANA AGBO writes on the feasibility of the sector taking its pride of place as the mainstay of the nation’s economy.

Nigeria has been relying on revenue generated from crude oil and gas from late 1960s after it had shifted from agriculture which has been the mainstay of the economy.

In spite of federal government’s commitment to agricultural development, there is growing evidence of youth avoidance of participation in the agricultural sector evidenced by mass migration to urban areas.

Being one of the key sectors of the economy has been outlined in the Economic Recovery Growth Plan (ERPG) to help arrest the problem of food insecurity, generate employment, improve foreign exchange earnings and drive industrialization.

Despite the strategies adopted by various governments in Nigeria to address agriculture and rural underdevelopment problem, the story remains the same. There are still inequality and poverty particularly in the rural areas.

There are a lot of public complaints on the underdevelopment situations of many rural areas which constitutes a threat to Nigeria’s vision of becoming one of the twenty strongest economies by the year 2020 (vision 2020).

While experts are of the view it must be pragmatically supported to ensure the achievement of the stated goals, they also disclosed that doubling productivity in agriculture in Nigeria would reduce extreme poverty by 37 per cent.

However, several recommendations were made during the 2019 Agriculture Summit Africa in Abuja, organised by Sterling Bank in collaboration with the World Bank and other stakeholders with the theme ‘Agriculture: Your piece of the Trillion -Dollar Economy.’

An expert, Prof. Ndubisi Ekekwe said, with more than 60 per cent of Nigerians being employed in the agricultural sector, adopting newer technologies to boost productivity would go a long way in impacting positively on the economy in many ways.

Prof. Ekekwe while noting that adopting technology was the best way to achieve self sufficiency, expressed concern that Nigeria was not yet there.

According to him, “Agriculture is the place we can have the greatest impact because that is where we have majority of our citizens. So what can we do but that is where we have the problem.

As Stakeholders Move To Reposition Agriculture As Mainstay Of Nigeria’s Economy
As Stakeholders Move To Reposition Agriculture As Mainstay Of Nigeria’s Economy

“If we have the mechanism to reduce the information asymmetry so that farmers can actually have incentive to stay in the farms.

“I still believe that anything we do in Africa, if we do not make farmers to become business people nothing will work,” he said.

The Professor who is the Chairman of a technological company, FASMICRO Group, noted that the problem was largely how to get financiers to invest in agriculture, adding that for so long as farmers were not made businessmen the economy would not grow as expected.

“Although Africa is not there yet because we have not brought technology into one of the most important sector, agriculture,” he said.

Lamenting over the nation’s dependence on oil, the Senior Agriculture Economist, World Bank, Dr. Adetunji Oredipe, said if Nigeria had explored the potentials of some value chains like palm oil, cocoa, groundnut and cotton, the country would be earning at least $10bn annually from the four commodities.

Oredipe said the neglect of the agriculture sector when Nigeria’s economy became increasingly dependent on oil has proved to be a disaster.

However, he called for the overhauling of policies by articulating a clear vision to “achieve a hunger-free Nigeria, through an agricultural sector that drives income growth, accelerates achievement of food and nutritional security, generates employment and transforms Nigeria into a leading player in global food markets”

According to him, ,”Nigeria is now one of the largest food importers in the world.

According to him, “In 2016 alone, Nigeria spent $965m on the importation of wheat, $39.7m to import rice and $100.2m on sugar importation.”

“Nigeria’s vision should be to revive the rural economy by transforming Nigeria into an agriculturally industrialized economy, create wealth, jobs, and markets for farmers. We must adopt an ambitious agricultural promotion strategy, one that is focused on a combination of transformational policy reforms and private capital investments with a promise to expand the benefits to millions of Nigerians.”

He said spending $655m on fish importation appears like financial recklessness, considering the huge marine resources, rivers, lakes in Nigeria.

On why banks don’t lend money to farmers, the Managing Director and Chief Executive Officer of Nigeria Incentive-Based Risk Sharing System for Agricultural Lending(NIRSAL), Aliyu Abdulhameed said there was no proper structure along the various value chains, from the small holder farmers to the market that would give financiers the confidence that their money would not be at risk

Abdulhameed said in spite of agric loan opportunities, lack of structure along value chain is a major challenge.

He said until small holder farmers come together to form cooperatives that would on their behalf approach the banks for facilities, it would be difficult for them to do so individually.

Abdulhameed, who spoke on enabling the agricultural value chain, said banks were not charity organisations and as such would always check risks before obliging to release funds.

READ MORE: Africa failing to win hunger war, despite gains in Agriculture – AfDB

According to him, structuring the various value chains across different aspect of agriculture including pre-stream, mainstream, midstream and down stream in a manner that banks will be assured that loan repayment will not be a problem is the way to go.

On the aspect of lending to farmers so as to boost productivity, Kebbi State Governor Atiku Bagudu however advised banks to increase their loan portfolio to the agricultural sector, saying investing in agriculture is not as risky as other sectors that benefit up to 90 per cent loan facilities.

Bagudu expressed concern that besides Sterling Bank, which had dedicated 10 per cent of its total loan portfolio to the agricultural sector, other commercial banks only dedicate one or two per cent of their total loan portfolio to the sector.

As Stakeholders Move To Reposition Agriculture As Mainstay Of Nigeria’s Economy
As Stakeholders Move To Reposition Agriculture As Mainstay Of Nigeria’s Economy

The governor noted that if agriculture was only one or two per cent of a bank’s portfolio, the staff of such banks may follow same priority, with little chance for someone in the agriculture department having the opportunity to head such bank.

“It is important, we put pressure to improve loan portfolio in agriculture and encourage banks and other major stakeholders to put their best brains in agriculture.

“Many commercial banks do not realise that lending to agricultural sector will ensure safer banking and more prosperous society.

“Over the last three years I have interacted with Sterling Bank and it shows how much there is to do, how much value addition is there to achieve and how much money there is to make in the sector.

“We have good brains that can help us figure out how to fund agriculture and the evidence is out there that agriculture is not as risky as those sectors that benefit up to 90 per cent loans from banks,” he said.

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He congratulated Sterling Bank for organising the event, saying he was at the 2018 years summit and it was beneficial to both the Federal and state governments.

The governor said if properly harnessed, the sector had the capacity of helping in the recovery of Nigeria from recession, adding that “while other sectors were doing one per cent during recession in the country, agriculture was making up to 3 per cent.

“Agriculture is where to make money but there must be collaboration to support stakeholder to compete internationally and account and financial engineering that will help them compare with participants in other countries and compete favourably.

He however urged called Policy makers to come up with policies that would place the country at an advantage globally, noting that there were so many distortions caused by wealthy countries to continue to control the market.

The Managing Director, Sterling Bank, Abubakar Suleiman, said the bank has committed over N55 billion financial support to agricultural sector in the last seven years.

He also said the bank has set up farmer’s radio, to assist farmers’ access to information. The radio station he said is currently broadcasting in 13 stations.

The bank’s Chairman, Asue Igholalo, stressed that the revitalisation of the agriculture sector is a key project to ensure national development adding the sector has not attracted the funding required for its maximum productivity.

Igholalo further lamented the huge loss recorded in the sector due to unfixed infrastructure and finance deficit adding that efforts geared towards improving the sector should be promoted to ensure production of food for the people and for export.

However, Vice President Yemi Osinbajo while disclosing the federal government’s readiness to partner with development bodies and private sectors to establish, promote and support special industrial processing zones across the country, also highlighted plans to facilitate the review of the land act tenure, and implement the agro rangers project that will secure lives and investment of farmers across the country.

As Stakeholders Move To Reposition Agriculture As Mainstay Of Nigeria’s Economy
As Stakeholders Move To Reposition Agriculture As Mainstay Of Nigeria’s Economy

According to him, “It is heart warming that agriculture is fast becoming the most across trade and particularly in the face perennial dwindling prices and devaluation and attendant desire to diversify the economy to boast revenue base of the nation while endangering the food and agriculture production for local and international market for foreign exchange earnings.

“The need to get everybody in agriculture has been one of the cardinal points of the Economy Recovery Growth Plan (ERGP) of the Federal Government, with emphasis on developing and export led economy.


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