Nigeria Hopes to Expand Agricultural Sector

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ABUJA, Nigeria — Agriculture Minister Akinwumi Adesina has led an initiative to transform Nigeria from the second-largest importer of rice into one of the world’s greatest providers of the food. He has set a target: by 2015, an additional 20 million tons of food will be produced.

Why the focus on agriculture? In 2014, after re-basing its GDP, Nigeria now boasts the largest economy in Africa, no doubt a product of its role as the continent’s largest oil producer. Yet close to 70 percent of Nigerians still live in poverty.

Those who live in rural areas, in particular, struggle: up to 80 percent live below the poverty line. Boko Haram, the terrorist group that hopes to establish an Islamic state in northern Nigeria, has only further deepened the poverty of the rural north, robbing farmers of their produce.

Nigeria possesses 84 million hectares of arable land. But half is still uncultivated. Thirteen percent of the GDP is contributed by the agricultural sector. Growth in this area could potentially double and create wealth for small farmers and big agribusinesses alike, if handled correctly.

Adesina has said agriculture is important in creating wealth for the rural poor and building peace in regions plagued by Boko Haram attacks. But it is also a way to stabilize the heavily oil-dependent economy.

Oil is a good that is vulnerable to sudden changes in global commodity prices. Agriculture, however, is not so volatile. Everyone has to eat.

The biggest push in transforming Nigeria into an agricultural powerhouse has come from private investors.

For example, Aliko Dangote — Africa’s wealthiest man, with an estimated value of $25.1 billion from investments in cement, flour, sugar and agriculture — recently committed $1 billion to commercial rice farming and rice mills in Nigeria. The investment shows his support of the Nigerian government’s plan to become completely food-sufficient.

His company, Dangote Group, bought 150,000 hectares for rice production and plans on establishing two rice mills. Dangote’s undertaking is expected to create 8,000 jobs.

Similarly, Olam International Limited has invested $100 million into commercial rice productions, increasing the agribusiness’ acreage to 10,000 hectares. The company hopes to employ 16,000 farmers by 2018.

Ken Ukaoha, president of the National Association of Nigerian Traders, believes the government should invest in extension services, an information infrastructure that provides a link between farmers and markets in the agricultural sector.

Such services, he says, would help inform farmers as to which fertilizer and seeds to buy, thereby improving output efficiency.

Ukaoha also insists on increased funding, which could develop new agricultural technologies and cultivate more land.

While private investment has been strong and is on the rise, government spending is still too low. In 2003, African Union members signed the Maputo Declaration, agreeing to commit at least 10 percent of each of their national budgets to the agricultural sector. Nigeria, like many other African countries, however, has yet to consistently attain this percentage.

In 2011, the Nigerian government began the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending. Its goal is to diversify banking portfolios with increased agricultural investments — and the system has been a success.

Only 0.7 percent of the national bank’s portfolio consisted of the agricultural sector in 2011. By 2013, the number shot up to five percent. Experts expect agriculture to make up 7.5 percent of bank investments this year, with small and medium-sized agricultural businesses benefiting the most.

Adesina already sees growth in Nigerian agriculture as a result of government measures: “In the north in 2012, we produced an additional 1.4m tonnes of paddy rice. Last year, we expanded that by an additional 2.95m tonnes.”

Rice production alone has provided $2 billion to the Nigerian economy, an indicator, perhaps, of progress.

Shehrose Mian

Sources: All Africa, All Africa 2, All Africa 3, All Africa 4, All Africa 5, The Africa Report, Financial Express, Rural Poverty Portal, VOA News, Forbes
Photo: USAID

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