Economic diversification is no longer an option for Nigeria, writes Oluchi Chibuzor
One of the central goals of every developing country is to reach high-income status and agriculture plays a critical role in transforming economies to reach such goal, along with achieving other essential development goals like ensuring food security and improving nutrition.
According to the Dean of the Institute of New Structural Economics and Professor at Peking University, Justin Yifu Lin, in order for any nation to end hunger and undernutrition while accelerating economic growth, agricultural transformation must become a reality.
“Nearly all countries started off poor, and only a handful have achieved high-income status. However, the ones that achieved it started with agriculture and went through an economic transformation that accelerated growth and reduced hunger and undernutrition.
“For example, China’s rapid growth in GDP per capita in current US dollars from $155 to $8,123 between 1978 and 2016 was due to this kind of transformation,” Lin pointed out.
Unarguably, the Nigerian agricultural sector has gone through a chequered history. The uninspiring performance of the sector in terms of its contribution to the country’s revenue has also been a source of concern to successive governments.
This had led to the creation of various initiatives aimed at taking the agriculture sector out of the doldrums.
Unfortunately, the sector’s contribution has remained insignificant because of Nigeria’s heavy dependence on food importation.
But with Nigeria’s dwindling revenue as well as emerging threats to global food security, more attention is being paid to agriculture.
With the country blessed with favourable climatic conditions, vast arable land and fertile soils, the significant role agriculture should play in the nation’s quest to achieve sustainable development has never been doubt.
Clearly, could have been one of the reasons why President Muhammadu Buhari recently disclosed plan by the country to stop providing foreign exchange for importation of food into the country.
A statement by a presidential spokesman, Mallam Garba Shehu, had quoted Buhari as saying the foreign reserves would be conserved and utilised strictly for diversification of the economy, and not for encouraging more dependence on foreign food.
“Don’t give a cent to anybody to import food into the country,’’ he said.
According to the president, some states like Kebbi, Ogun, Lagos, Jigawa, Ebonyi and Kano, have taken advantage of the federal government’s policy on agriculture with huge returns in rice farming.
He, therefore, urged more states to embrace the ongoing revolution in agriculture to feed the nation.
“We have achieved food security, and for physical security we are not doing badly,’’ he said.
Indeed, the CBN through its Commercial Agriculture Credit Scheme (CACS) as well as its Anchor Borrowers’ Programme (ABP) has continued to support genuine local rice manufacturers, in line with its development finance function.
The ABP programme was designed to assist small scale farmers to increase the production and supply of feedstock to agro-processors.
The programme is an initiative of the central bank aimed at creating an ecosystem to link out-growers (small holder farmers) to local processors, increase banks’ financing to the agricultural sector enhance capacity utilisation of agricultural firms involved in the production of identified commodities and as well as the productivity and incomes of farmers.
There are reports that it has reduced the level of poverty among small holder farmers and improved jobs creation, while assisting rural small-holder farmers to grow from subsistence to commercial production levels.
The programme was hinged on three pronged approach namely the out-grower support programme; training of farmers, extension workers and banks; and risk mitigation.
The ABP is currently operational in about 26 states.
In addition, the CBN Governor, Mr. Godwin Emefiele, in December 2018, had said Nigeria’s monthly food import bill fell from $665.4 million in January 2015 to $160.4 million as of October 2018; an implied savings of over $21 billion on food imports alone over that period.
He had stated that the reductions in food import were recorded on rice, fish, milk, sugar and wheat, adding that the policy would be maintained.
“Most evident were the 97.3 per cent cumulative reduction in monthly rice import bills, 99.6 per cent in fish, 81.3 per cent in milk, 63.7 per cent in sugar, and 60.5 per cent in wheat,” Emefiele had said.
The exclusion of 43 items from its list of items eligible for forex played a significant role in this regard.
Also, other fiscal policies had been making it increasingly unfavorable for the importation of rice. Rice imports through land borders are restricted, while imports that come in through the ports attract sizeable import duties and levies.
For instance, the National Security Adviser (NSA), Major General Babagana Monguno (rtd), recently said the federal government has decided to extend the partial closure of the country’s borders beyond the 28 days earlier slated.
Monguno, disclosed that the partial closure of the borders between Nigeria and Benin Republic has yielded results, adding that hundreds of bags of imported rice have been impounded.
Earlier the Comptroller General of Customs, Hammed Ali had said that Nigeria borders would remain closed until the neighbouring countries respect Nigeria’s policy on food ban and other contraband importation.