Hon. Nkem Abonta represents Ukwa East/West Federal Constituency of Abia State in the House of Representatives. In this interview with Damilola Oyedele, Abonta explains that a vibrant commodity exchange commission would help revolutionise the agricultural sector for produce export. Excerpts:
You sponsored a bill on commodity exchange, which has passed through second reading. What is the major import of the bill?
Commodity exchange is basically agricultural. It is a commission where agricultural products and other derivatives will be traded upon. It is a platform through which agricultural products can be effectively harnessed to improve the input and export orientation for export promotions. It is similar to investment commission, security commission. In fact, commodity exchange is so wide that if Nigeria is talking about alternative revenue, then we must deal with agriculture properly and in dealing with agriculture we must talk about commodity exchange. There are several countries across the world that service through this strategy.
Former President Obasanjo introduced the cassava initiative and Nigeria today is the largest producer of cassava, and this is the best raw material for animal feed all over the world. Unfortunately, we are not the largest marketers or exporters of cassava because we do not have a platform through which it can be marketed. If we had commodity exchange commission it will be easier to have commodity brokers, warehousing and invoicing. Farmers would have the assurances and backing of a platform
For example, if a farmer produces corn or millet through the commodity exchange commission, he will be guaranteed that even if he produces a million tonnes, there is market to pick it up. He knows that he will get his money for the value of his produce. The farmer therefore gets to sell what he produces, and the buyer is guaranteed to get the product he wants at a pre-determined quality. The middle men also make money through warehousing and invoicing.
In fact, when the farmer takes his product to the warehouse, and he is given an invoice to the value, he can take the invoice to the bank and get like 70 per cent of the value of the product he has in the warehouse. This is a promissory note or instrument, which he can use to raise funds as the produce in the warehouse serves as collateral. It is a common practice in America.
So if President Buhari wants to succeed, I suggest he shifts his attention and energy to this. Yes, we need to catch the thieves, but some of the energy should be expended on those who also need to survive, the rich cannot sleep because the poor are awake and the poor cannot sleep because they are hungry. The government should try and provide sufficient food for everybody. We must revolutionise agriculture to ensure production. Above all we can also cure dollar scarcity by enhancing, normalising, legalising commodity exchange commission. It will run more than telecommunication; it will give us more money than the oil sector.
Ghana produces cocoa, but no one has the right to export the cocoa without going through the exchange commission, therefore their cocoa is highly priced. There are licensed brokers who go to the villages to get the cocoa and sell on platform of the Ghana Commodity Exchange, it therefore has a value; you cannot on your own fix the price.
Sadly the existing Abuja commodity exchange cannot even pay its rent. That is the extent at which it has been neglected; they exist, but not trading. I urge President Buhari to strengthen that commission, to develop and diversify our economy. If he wants to diversify our economy then we must look at agriculture. Commodity exchange will further impact directly or indirectly on the real sector that is deepening the capital market and enhancing capital mobilisation.
What is your view on the planned N5, 000 monthly stipend for the poor?
I support Buhari’s plan to do away with the N5, 000 thing because it was a bogus and deceitful promise. I knew they could not execute it and Nigeria should not be made a beggar nation. Let him group these unemployed people and channel this fund to farming. Through the exchange commission, the broker takes their products rather than giving unemployed youths N5000 a month. Instead, give them farms and provide start up packages for them; tractors, housing and others. It may be surprising to know that the number of tractors in Nigeria is not up to the number in just one state in India, or Malaysia, or Thailand. We will always buy rice from Thailand, but we have one of the best qualities of rice; we are yet to harness it. We can export rice; all we need is the platform and processes.
We must improve agriculture to become more attractive for more graduates. There is nothing wrong with graduates farming. I farm yam but I do not export it, I use it for subsistence. The only way to introduce our agricultural products into the global market is to hit the ground with commodity exchange commission. Ginger, for instance, is marketable, soya bean is marketable, all our seeds are marketable, they are being sold abroad, but through which platform? Individually and not regulated! So there must be a regulation to improve it.
But would this not encourage what experts suggest the country must avoid: exporting its produce in the raw form instead of agro-processing?
That is a long term issue. If we have quality cocoa and insist on fixing the price ourselves, chocolate companies will come to Nigeria to begin to invest. It is just like motor business, nobody will come to manufacture motor here as long as we keep dumping tokunbo here. If we make it a policy that to sell your car here, you must produce here, they will come. South Africa produces the best BMW because they forced Germans to start the firm there. So all the vehicles they use there are being assembled in South Africa. 50,000 pieces of Hilux were sold by Toyota last year, yet they don’t have any factory here. We have to use what we have to get what we want. The idea of this bill is to harness what we produce, guard it jealousy and give it out the way we want it.
From the 2016 budget, does it look like the government is ready for the massive funding that would be required to diversify the economy, particularly, in exploring the potentials of solid minerals and agriculture?
If we are to talk about funding and policy I will make bold to say the 2016 budget is a mess. It is a budget of change, change in the sense that it brought in a lot of confusion. I am sure though that Buhari must have learnt his lesson and will personally appoint people who will supervise budgeting.
Thankfully though, the legislature is a budget writing legislature and by next year he will budget according to our needs. We have needs to budget in, a sufficient need which is agriculture. So if we can diversify from oil then we must fund the area we want the diversification to come from. We need to work on agriculture very well and identify the areas. We also need to draw up a blueprint because it is not just about funding. After funding, what next? After production, what next?
Do you think the research institutes have the capacity to drive this agricultural and industrial revolution?
They are there but they are not funded. For example, an institute can provide the modalities from garri frying to the other processes involving cassava. That is why I make bold to say, patronise made in Nigeria, made in Aba and the rest of them. In Aba, you will see everything from calibration of fuel pump to engines. They used to manufacture shoes there. We tried to bring Made in Aba to Abuja here for people to see. In the 1950s people laughed at Japan, saying, “Na made in Japan you buy?” But now Japan is the ultimate. So we must look inward to explore our potentials and patronise local products.
There is the Abuja commodity exchange that can take care of the commodities in the northern region. What about other states?
Abuja commodity exchange, which is now changed to Nigeria Commodity Exchange, also has branches all over. They have platforms in the North. They also want to go into the geopolitical zones like Enugu, Port Harcourt, and Kaduna. If we are talking about palm oil you must go down to the East and so on, but gradually we will now get all the states on board so that the people will not travel far to the market.
They also have centres and warehouses that are maintained and built to standard. Right now the commodity exchange has the capacity, they have the personnel but they are not funded. They can hardly pay rent for where they are, not to talk of having their own property. They need to have secured environment, capacity building for their staff.