Nigeria Should Invest Heavily in Agriculture to Expand Economy



Alhaji Abubakar Atiku Bagudu, an economist by training, is the Executive Governor of Kebbi State and Vice-Chairman of the National Food Security Council, which is heavily involved in the hotly-debated Ruga policy. Bagudu speak with THISDAY on the nature of the Ruga scheme, how it fits into the country’s national development story and why he supports President Muhammadu Buhari’s economic policies. Solomon Elusoji brings the excerpts:

Recently, the federal government muted the idea of Ruga as a way of settling the farmers, herders crisis, which generated a lot of controversy. What do you think was responsible for the controversy?
A very interesting report from a UK commission that examined why Brexit happened was summarised and published in a book called Prosperity and Justice. The book summarised that prosperity and justice must go together, otherwise the economy not working for the majority will produce consequences one day, and that’s what led to Brexit.

For example many people found it strange when I say Ruga is not a Fulani word. So, why the controversy? The controversy happens because something more profound sociologically is taking place. We are a nation angry with each other because of the failures, because of the faultlines; we have refused to accept that we are a little economy; so how do we become big, so that we have an economy that works for all. Our sociological reasoning escapes even our historical realities.

Why were Ife and Modakeke fighting each other on land? They are not Fulanis and Yorubas. Why are Tiv and Jukuns killing each other as we speak now? It’s not Fulani versus Hausa. Why are thousands people dead between Cross River and Ebonyi as we speak. I’m sure if you go to any court system in the 36 states, land issues constitute a significant amount of complaints. So let’s stop getting angry with each other. Let’s solve problems, especially problems that have been created by climatic change, by natural progression as a result of our population.

The four year old child following an animal – believe me, some of them walk 20 kilometres a day – has an identity problem. My maternal grandfather is a cattle rearer. We used to tease him by asking him which village he was from. He didn’t have a village. So you can imagine that since as early as four years of age that was his life. He has not gone to Arabic school; they don’t. They don’t go to formal schooling. And what does he experience when he’s working with animals? It would rain on him and his clothes would dry on him.

That’s why when it created an insecurity problem, you have a hot potato, since you have infantry generals; these are people who have been trained by occupation in the most difficult terrain. What is prison to him? Somebody who follows an animal everyday, who is always afraid of snakebites, who it will rain on and his clothes will dry on him, somebody who maybe his meal is to stop a goat that is rearing and suck from it, you have taken him to a place where you are giving him a hot meal. I’m not justifying it. I’m just saying let’s understand the social contract. So for him, that social contract has broken down. I’m not just saying it has broken down only for him, or only for the Fulani; it has broken down for the fishing communities as well, and maybe some farmers too. And if we don’t deal with it, one day we will bear the rage of their anger.

Why do you think the federal government backtracked on Ruga?
Government should be sensitive to people; even if the policy is correct but misunderstood, a responsible government should be sensitive to the people. Ruga is an acronym created by the colonialists. It means Rural Grazing Area. In Birnin-Kebbi, at least we have 20 Rugas around. That’s where the Fulanis live.

The idea that was developed was that, for the states that have this anthropology, let us help those states, so that the Fulanis living in those settlements can have water, veterinary services, we can teach their women to make yoghurt out of the milk, rather than walk seven kilometres to the market to sell N600 worth of milk. This is so they can stay in one place. What does a Fulani do in the morning if there is no water? They would have to walk their cows somewhere. It might be 1km to 3km. In walking their cows somewhere, that’s where things go wrong, because maybe six months ago, a primary school does not exist, and they have to meander round it. And in meandering, things can go wrong. So population growth is making it impossible for me to help Fulanis. If you go to the prison here in Birnin-Kebbi, more than 60 per cent of its imamate will be Fulanis, because they have entered one farmer’s land or the other. Because I haven’t provided water for them to stay in one place and animals cannot stay without water. You may say, why do we care, after all, it is private enterprise. Yes, it is private enterprise, but a responsive society should care for its weakest link. And provision of infrastructure, ideally, should be for everyone. So it is part of governance for us to think for everyone. This is not a lifestyle that we should allow anybody to do. Any child waking up at 4am to follow an animal for 10 to 12 kilometres a day, the social contract between him and society has broken down.

What in your opinion is the difference between ranching and Ruga?
Every economic activity requires some space. It involves recognition that this economic activity is important to the economy. Whatever terminology we use, let’s start with that. Yes, Lagos or Ogun might not be the most ideal for livestock, that’s alright. But let those places which are ideal have them, so that our national prosperity can increase. And that’s why I always give the example of fishing. What does an Ijaw man like? He likes to enter his canoe, get some fish and take home.

Today it is not possible because that river has been taken over by seaweed which he can’t remove. So he can’t find fish from that river. That fisherman does not even like the thought of being a fish farmer, where he will own a pond. Just like the Fulani man thinks moving around gives me joy. So you have to help him, migrate him, teach him – say look, what you are doing years back was good and legal, but you can own a shrimp farm which will produce more money for you, take care of your family and send your children to school. That’s the obligation of society to him. What is our obligation as society to those people who are moving around with animals? And don’t even think about this as North versus South. Think about it within Kebbi.

What’s my obligation? It is to help them, because they are all victims; any cow that moves around in a day loses 70 percent of its milk. So no reasonable person will want to do that. So let me help them with water, teach them veterinary services, teach him artificial insemination, so rather than hold on to a cow that produces two litres of milk a day, he can have a cow that fetches him 20 to 30 litres a day. And society will be better off. His child would go to school. And the social contract between him and society will now begin to get restored; he feels responsible, you can appeal to his reasoning, to his morality, to his senses.

So about ranching, everyone is saying the same thing in different ways. The colonialists forecasted that it is a dangerous thing to have people wandering. So in any community there should be a rural area where they can stay and do their business. That’s Ruga. Sometimes I find it that these things are being used interchangeably, whether you call it ranching or Ruga, that economic activity requires some space which may be available to those who are undertaking the activity. And more than that, we should work with them, so that they can compete with the rest of the world in that activity, because that is what will contribute to our national prosperity. New Zealand exports about $5.2 billion worth of milk and cheese to the world market. Imagine a Nigeria that is beginning to tap into its potential, where we are not just exporting oil.

Many people believe Nigeria is a small economy. Do you share that opinion?
We are a very small economy. Many people have not come to the reality of that. We can be a big economy if we choose to, but we have to start with the acknowledgement that we are a very small economy. In 1999, when Obasanjo was sworn in as President, the budget for that year was $9 billion. With the increase in oil prices, the fortunes of the country improved. By 2013, we had our highest budget in recorded history, which was $33billion. But that was the budget. Budget performance in 2013, particularly capital budget performance was about 20 percent.

I was in the Senate then. Even assuming we had a 100 percent performance, how big is $33 billion for a nation of 170 million plus people. In 2013, the federal budget of Brazil was about $600 billion. Here you have President Goodluck Jonathan with 170 million plus souls to police and provide infrastructure for and at best you are hoping to get $33 billion to spend for them. But the Brazilian President has $600 billion, about 20 times more. Our budget this year is less than $30 billion. How do we compare to South Africa? So when are we going to come to terms with this reality, so that we make the choices, because they are not neutral. As long as we remain a small economy, the expectation of the large percentage of our population is unlikely to be met and for whoever is in charge, there will be frustration.

What comparative advantage does Nigeria have compared with the countries you talked about?
Comparative advantage is an imperial term. What do I mean? It is created. Somebody has spent the last ten years subsidising his farmers and I want to start today; and I offer an incentive to farmers, similar to that which he has provided three to four years ago, maybe much more smaller; and then he tells me you can’t do this under World Trade Agreement rules, because you are distorting trade. But that is even if you are talking about yesterday. What are European subsidies today? The OECD publishes an annual report on agriculture support.

These are subsidies that are given by governments for agriculture in OECD countries. This year 2019, the value of those subsidies was over 445 billion Euros. What is the agricultural subsidy of Nigeria? What is even the total budget or financing available to our agricultural industry? If you start with the 36 states, what is their agricultural budget? We did it last year and found that the total was under N400 billion. Federal government is another N100 billion naira. Anchor Borrower that has been very successful is less than N200 billion. So less than $2 billion goes to agriculture – we are not even talking about subsidies, but the total agriculture budget.

Greek shippers who have dominated shipping, how did they do it? They didn’t do it because they have steel more than other countries. They did it because their country decided that they are a trading nation and were going to subsidise the shipping industry so that they can dominate trade. So, comparative advantage, even as a student of economics, is just gimmickry. Because how is it that the Netherlands is sending milk to you?

What is the comparative advantage? Friesland Campina is a company owned by Farmers Cooperative. So their first objective is to sell that milk to the world. And they are the dominant players in our market. Milk is 70 percent water, so what do they do? If milk is produced in Europe, to lessen the cost of transportation, you remove the water. So it is now easy to transport. Then you move it to Nigeria, find water and reconstitute it. But yet, we are angry at each other because we have failed to develop our milk economy. We are angry at each other because we are foolish not to recognise that we have a bigger industry than the Netherlands.

Why are we not a fish-producing nation? We have people who are happy to be fishermen. We have them in Taraba, Rivers, Bayelsa, Bornu, Kebbi, they are ready to do that for us. But yet we would rather import smoked fish. The first step in solving that problem is for us to agree as a nation that this is crazy. That’s the starting point. Even if we are talking about catfish, why can’t we have a million catfish farms? There are people who are happy to do that? So what is our obligation?

Olaniwun Ajayi wrote a book. What he did very brilliantly was that he said for a long time we are under slavery, where the Europeans slave master put a chain around people and transported them across distances, sell them naked and debase our humanity. After that system, colonialism took its place, where they controlled our resources, our economy. Although they gave us independence, there was still some form of indirect control. So he wondered, where did their morality come from? For us to now assume that these are the sweetest people in the world; that they are trying to help us grow and develop. Where did it come from? Somebody whose grandfather was a slave owner, who has a stake in Shell or Mobil, which doesn’t mind owning the whole of Bayelsa as an oil bloc, where does his morality come from?

If a cow owner today in the Netherlands, in Belgium, in Germany, does not receive any state support for owning a cow; he cannot compete with a cow owner anywhere in Nigeria. That’s my message. If a rice or wheat farmer in the U.S does not receive subsidy from the U.S. state, there is no way he can compete with a wheat or rice farmer in Nigeria. He will be buying from me, as it ought to be. The World Trade Organisation has failed Africa, because up till now, it hasn’t gotten the industrialised world to exit subsidising agriculture. So that that 400 billion Euros it is subsidising agriculture with can come to Africa. So yes we are competitive, absent distortions created by countries that are wealthier than us.

How can Nigeria increase the size of its economy?
We have to act quickly enough and create an economy that will work for all or the majority; otherwise we will all pay a price. We don’t have that now. We are trying to develop it. Nigeria produces the same amount of oil as Brazil. But decades ago Brazil decided that yes, oil is good and thank God, but it doesn’t create as many jobs as we want. But Brazil did something: they invested some of their oil money and expanded agriculture. Today, they are the biggest in sugarcane. They export $30 billion worth of ethanol to the world market. Today, maybe 70 percent of the agricultural activities in Bayelsa has collapsed because of oil; Bayelsa has maybe more shrimp potential than some of the countries in the world that are exporting shrimp.

The Shagari government designed a place in Bayelsa to produce two million metric tonnes of rice. Our addiction to oil made us ignore that. This is the same in almost everything. It’s not the fault of any one government. It is a collective responsibility. And that’s why I say it is very important to come to the realisation quickly that we have a tiny economy; $25 billion is tiny for a population coming close to 200 million people.

So let’s quickly acknowledge that we have to compensate for the distortions that are being created by trade, so that we also do not penalise our participants in those activities; our agricultural sector is victimised because countries that are stronger than us are subsidising agriculture and dumping on us; so rather than buying from us, we are now the ones buying subsidised food from them; it’s the same thing in our fishing sector, our livestock sector.

What do we have that is very important? Economists use the term absorptive capacity. That means the capacity of an economy to absorb investment. That’s what Nigeria has in abundance. And that’s the potential that we should market, because not many countries have it. There are many countries that are too little. But here is a country whose domestic market itself is an engine for growth. If you put $2 billion today and improve fishing, maybe the Nigerian market will just absorb that produce, because we love protein.

If you do the same for agriculture, we love our meat, our milk. Not many countries have this potential. That’s the low hanging fruit for us as a nation. And that’s why President Muhammadu Buhari, at the National Security Council is drawing attention to it; that’s why he is encouraging the Central Bank. This is what we have. Let’s put money across the nation. If it’s our cassava farmers, let them get more yield per hectare so that they can be wealthy.

Luckily it’s something that a couple of seasons can change. In agricultural value chains, every season can change the story and create mass employment and have an economy that is working. And we have demonstrated it. Today we don’t import fertilisers, why?, just by thinking correctly. Today we have almost exited importing rice, why?, by thinking correctly. So we need to do more of that in all the sectors and unapologetically. And even realise the potential in each other and the value of those potentials.