The COVID-19 pandemic came with its attendant oil price crash, as demand plummeted. With lockdown in China, which consumes about 14 per cent of the global crude oil daily and reduction in major economic activities globally, the price of the commodity went southwards. On March 9, 2020, Brent crude futures, the global oil benchmark, were down 22 per cent, last trading at $35.45 per barrel.
The crash has been attributed to two major factors – the Coronavirus pandemic and the oil war between Saudi Arabia and Russia. As the world grapples with the coronavirus, the economic impact is mounting – with the G20 Finance Ministers and Central Bank Governors on March 23, 2020 called for discussions on how to address the emergency. Kristalina Georgieva, the International Monetary Fund’s Managing Director issued a statement following the call, in which she outlined the outlook for global growth: “For 2020 it is negative – a recession at least as bad as during the global financial crisis or worse.” But she added: “We expect recovery in 2021. To get there, it is paramount to prioritize containment and strengthen health systems – everywhere.
” The Organisation for Economic Co-operation and Development warned on March 23,2020 that the shock from the virus is already bigger than the 2007-2009 global financial crisis. OECD Secretary General Angel Gurría said many countries would fall into recession and countries would be dealing with the economic fallout of the COVID-19 pandemic for years to come.
“Even if you don’t get a worldwide recession, you’re going to get either no growth or negative growth in many of the economies of the world, including some of the larger ones, and therefore you’re going to get not only low growth this year, but also it’s going to take longer to pick up in the in the future.
” This statement comes after the United Nations Conference on Trade and Development, the UN trade agency, warned of a slowdown of global growth to under 2% this year, effectively wiping $1 trillion off the value of the world economy. Nigerian economic future in a time like this is uncertain as we over depend on oil and other nations of the world. Very soon accusing finger will be pointing at the crash in global price of crude, Covid-19 and the nation’s dependence on imported goods to the detriment of producing for export.
Exploring opportunities in primary agriculture and agro-food sector for increased employment and export earnings is the way out, Agriculture and ancillary Agro-businesses are the magicwands that can save Nigeria.
For sustainability and food security, experts believe that Nigerian and the government needs to consider farming as serious business rather than an alternative to crude oil, if food security will be achieved ‘Hinging’ their arguments on the premise that there is correlation between food availability and security, stakeholders in the agrofood industry have stated that that the achievements of over five decades can be undermined by hunger and poverty if government does not address Nigeria’s food import bill.
The point is, Agriculture and the many offshoots are catalyst for job creation and opportunity to provide food rather than the serial importations of what Nigerians can produce and the associated waste of hard earned foreign exchange.
It is on record that Nigeria has over 84 million hectares of arable land, out of which only 40% is cultivated. Estimated at over 180 million people, it is also emerging as Africa’s largest agricultural market. Supported by nature, the country’s crops that could earn huge foreign exchange include beans, yams, sesame, cashew nuts, cassava, cocoa beans, groundnuts, gum arabic, kolanut, maize , banana, melon, millet, palm kernels, palm oil, plantains, rice, rubber, sorghum, soybeans and yams. These have potentials of commercial quantities.
Key findings indicate that Nigeria invests the lowest percentage of its budget to agriculture among sampled African countries and the provision for 2016 is a paltry 1.25% of the overall budget. Agricultural productivity is low in terms of yield per hectare production of cereals, meat, milk and vegetables.
Nigeria’s fertiliser use per hectare is also one of the lowest in Africa. Despite these, agriculture contributes much to Gross Domestic Product (GDP) growth and employment creation in Nigeria and should be recognized as a key driver of economic growth. Of course, in the past, Nigeria used to be a major player in the world’s agriculture industry- once recognized as the world’s largest producer of groundnut and palm produce, as well as the second largest exporter of cocoa and the country. This is now part of Nigeria’s history.
Currently, Nigeria has several policy frameworks and schemes that seek to promote agriculture and the full value chain approach in the utilization of its products. But we are still below par. At inception, the President Muhammadu Buhari-led administration promised to continue existing policies in the agriculture sector. This, it has done. It also pledged to improve on their efficiency and effectiveness. The administration also promised to subsidise funding for priority segments in the sector like equipping farmers with the right tools, technology and techniques. Surely, improvements in agricultural production are necessary for Nigeria to attain self-sufficiency in food and indeed meet the larger picture of the right to food of its citizens and residents in Nigeria.
This is especially important now that the country is in big trouble of recession. The right to food is a right recognised by the International Covenant on Economic, Social and Cultural Rights (ICESCR), ratified by Nigeria.
This ratification places Nigeria under the obligation to take steps, and at maximum, to ensure available resources for the progressive realisation of the right to food of Nigerians. The budget, a legislative measure, is one.
The fulfillment of the obligations has a lot in common with budgetary provisions to promote agricultural production. The extent to which the budget provides for the activation of the existing policies to ensure the realisation of these noble goals has been doubt. For one thing, the agriculture budget seems to be lacking in coherence with agreed international standards, such as the Maputo Declaration on Agriculture, particularly in efficiency and effectiveness of federal spending and the capacity of the Federal Ministry of Agriculture and Rural Development (FMARD) to implement budget programmes. Eze Onyekpere, the Lead Director of CSJ, said: “The overall budget for 2016 is higher by 21.52% when compared to the 2013 figures. The expectation would have been for increased allocation to the sector rather than a reduction.
Thus, the Federal Government has not lived up to its commitment under the Maputo Declaration. “The average percentage allocation to capital expenditure is 49.09% over the four years, while recurrent expenditure was on the average 51.07% over the study period. The implication is that government spent more on recurrent expenditure, made up of personnel and overheads, than it did on capital expenditure. On the average, while recognising that farming is mainly private sector driven, it is not a proper composition considering the demand for extension services, inputs and machinery for farming. “However, the 2016 budget allocated more to capital expenditure, which is a step in the right direction.
In 2016, the bulk of the recurrent expenditure went to personnel expenditure and this accounted for 94.7% of overall recurrent. This leaves overheads with a paltry 5.3% of the expenditure. This calls for caution so as not to underfund the non-personnel recurrent components of agriculture expenditure.
The capital component of the 2015 agriculture vote was very low and a paltry 21.62% of the sector’s total vote. The share of personnel in the recurrent vote of the sector in 2015 was 94.16%. Overall, there seems to be no consistency in the distribution of the allocation between recurrent and capital expenditure in the agriculture budget over the four years – it has been oscillating.”
“It was refreshing that the 2016 federal budget made distinct allocations to the various agriculture value chains. However, the total allocation to fertilizers including organic and inorganic fertilizers was N4.656 billion, which is inadequate for the needs of farmers. Granted, there have been some positive changes in the 2016 budget of the agriculture ministry when compared to previous years when the play on words- “seed, seeds, seedlings, fertilizers” was the order of the day.
However, the allocations still have some assessed unclear and apparently inappropriate expenditure heads. For example, the difference between the allocations to National Council on Agriculture and Annual National Council on Agriculture which got the sums of N70.5 million each is only known to officials of the ministry. For stakeholders and civil society groups, it is only one of the votes that merits inclusion into the budget.
“Again, while the ministry itemised all its projects and programmes and allocated the relevant sums to them, allocating another N141 million for “projects and programmes” is a budget head only understood by officials and remains incomprehensible to date. Under the duplication of budget heads, “Construction/provision of Agricultural Facilities” appeared twice under different codes gulping N626.037 million and N50 million each. It’s no gainsaid that these allocations would have been properly re-directed for more pressing needs of the ministry and economy at large