Agriculture was designed as one of the main driving forces for Africa's economic recovery, supplemented by a growing interest in the continent's natural resources.
More than 60 percent of the world's available and unused arable land is in sub-Saharan Africa, and in Nigeria, agriculture accounts for about 22 percent of its gross domestic product (GDP) and more than 90 percent of employment.
Unfortunately, about 90 percent of agricultural production falls on small farmers with less than two hectares under sowing, which creates huge gaps that can be used for the benefit and possibly put an end to the era of agricultural processing as a development program rather than a business venture .
Currently, ActionAid Nigeria (AAN) is implementing Phase 3 of the State Agricultural Finance Project (PFA). The project aims to stimulate an increase in the quantity and quality of public investment in agriculture through increased citizen participation in policy development to increase the productivity and well-being of farmer farmers, their families and communities in Nigeria.
This project is also aimed at continuing to strengthen farmers' platforms for smallholder farmers by addressing the low voice and participation of small female farmers in agricultural policy development processes at the local, national and national levels.
Issues of particular relevance to the project include low access and control over land and low agricultural costs by the government at all levels and little support to the governments of small-scale women farmers by the government, lack of access to agricultural credit / finance, business development / consulting services and market access, materials, technology, crop insurance, etc.
One of the results of the PFA Phase 3 project is the simplification of the Agricultural Promotion Policy (APP) for small women farmers in line with the Agricultural Development Framework of Africa (CAADP) in order to enhance the capacity of their organizations to support opportunities that need to be considered in increasing the number of and the quality of expenditure on agriculture in the framework of the policy of promoting agriculture in Nigeria (APP) and the components of agriculture in terms of economic growth (ERGP). Thus, the food and agriculture team of ActionAid Nigeria intends to introduce a technical editor to generalize the APP.
Since an economy that has only recently recovered from a forced recession has triggered it in not fully controlled situations, such as volatile oil prices, which have spoiled state revenues and, consequently, its costs, it has become inevitable to create an independent economy.
Consensus in all areas that there is no better time than now to use the potential of the agricultural sector to help diversify the economy and put it on the path of sustainable growth and development. Fortunately, in its Plan for Economic Recovery and Growth, the government defined agriculture as a key part of its diversification program.
The ban on the importation of goods that can be produced on site is one of the steps that the current government has taken to demonstrate a renewed focus on agricultural development in order to diversify the country's source of income from oil.
The Minister of Agriculture and Rural Development, the head of Audu Ogbe, speaking at the opening of the Technical Working Group on the Agricultural Road Map in 2016, stressed that the decline in world oil prices forced the country to diversify the economy and agriculture the main anchor.
"We need to diversify and that diversification has great prospects in agriculture," Ogbe said.
One of the factors impeding the development of the industry is the lack of access to financing, which is a serious obstacle to farmers to invest in basic resources, such as good seeds, fertilizers and small-scale irrigation, necessary to increase productivity and generate sustainable income. As a result, the yield did not increase significantly, which led to widespread hunger and poverty.
Similarly, in the absence of commercial financing or other incentives for entrepreneurs seeking to create enterprises that can increase food production, agricultural production remains at the level of the subsistence level.
"As for agriculture, the opportunities are huge," said Jerry Gushod, head of agribusiness at Stanbic Bank IBTC. "Although much is required, and the collective inertia is still there, there are more and more signs of how agricultural transformation can change the state of the country.
"The current economic situation, especially with strong government support, makes agriculture an attractive prospect for the country. We also note that the demand for products at the top level associated with the broader agricultural sector will flourish, creating new economic opportunities for a wide range of local and international enterprises, "he added.
So far, various governments and the Central Bank of Nigeria have introduced financial initiatives aimed at encouraging local banks to finance agriculture, as well as helping to reduce financing costs for investors / entrepreneurs in this sector. Some of these initiatives include the Nigeria system of incentives for risk based incentives for agricultural financing (NIRSAL), an initiative that provides a guarantee for access to a financial institution, and also provides a discount for the borrower.
Another is the Commercial Agricultural Lending Scheme (CACS), a CBN initiative that provides unambiguous financing through commercial banks at 9 percent per year for commercial farmers. The Real Sector Support Fund (RSSF), as well as the CBN initiative, which provides unambiguous financing for the real sector, including the agriculture sector, for up to 15 years with an interest rate of 9 percent per year.
The anchor borrower program, another CBN initiative, provides funding with an interest rate of 9 percent per year. Recently, a scheme has been created for smallholder farmers through the "anchor" platform, by creating markets / outlets for small farmers.
It was mainly in the search for ideas and strategies to unlock the sector and stimulate the growth of local production, that many agriculture-oriented forums have become commonplace.
The ultimate goal is to unlock the country's economic potential. Most of these forums usually reach a consensus that the requirements for Nigeria's economic recovery include the adoption of innovative strategies, appropriate policies and universal coverage and careful implementation.
The deployment of government influence and resources to implement such initiatives and projects should be a priority, building cooperation with the private sector to stimulate the growth of the agricultural sector.
In addition, agribusiness should be broad, including the mentoring of young people, to see attractive prospects in the field of agriculture. Agriculture should be practiced as a business and participate in the private sector along the value chain, which will help to restore Nigeria's place as the leading agricultural economy.
"The desire to unblock the agricultural sector in Nigeria, given its tremendous transformation potential, continues to receive interest and momentum from within Nigeria and abroad," Gushop said.
He noted that the developments in the agricultural sector also contributed to an increase in exports from Nigeria to other parts of the world. Some of the known export products are sesame seeds and shea butter.
To move forward, experts said that Nigeria should seek domestic solutions for local financing. Several local banks have become quite active in the agricultural area, providing both funding and other support for the industry.
For example, a few years ago, Stanbic IBTC Bank cooperated with Tata Africa Services and John Deere Financial, a division of John Deere from the United States, through which the bank provides a number of financial services to John Deere customers.
Thanks to better governance and policies, Nigeria will benefit from the economic benefits of having a large part of the population in the economically active sector. A large share of agriculture in Nigeria's GDP, according to experts, suggests that strong agricultural growth is necessary to stimulate overall economic recovery and growth.